The City of Portsmouth is threatening to file a lawsuit against Scioto County and County ran entity, Southern Ohio Port Authority.
During Monday night’s City County meeting, City Manager Derek Allen presented Council with a financial report outlining the City’s minimum fund balances. In that report, Allen explained that many of the City’s financial goals are being met with most funds going into the black except the sewage fund, which remains in deficit even after recent sewer rate increases. Allen explained that some of the fund deficit can be attributed to the County for failure to pay their bills.
“We have not received payment from the County for their three areas for the last three months, and that bill totals over $100,000,” Allen informed Council.
City Solicitor John Haas explained that the County contracts with the City to handle sewage in the Rigrish, Rosemount and Eden Park areas.
According to Haas, the Rosemount area contract has expired with the other two contracts continuing with terms not set to expire until the 2040s and 2050s. The Solicitor explained that the County is disputing the rate increase. According to the contracts between the two governments, the City has to prove to the County why the rate increase was needed and how it benefits those areas involved. Haas added that none of these areas helped to pay for the City’s treatment plant or other sewer-related infrastructure upgrades.
“The contract says if they don’t agree with the rate increase, they (the county) can pay their money into escrow,” Haas stated. “What they’re doing is they’re just not paying anything at all.”
Haas stated that the County has not paid a single sewer payment since July, paying neither the new or old rate. As a result, it is his professional opinion that the County has breached their contracts with the City. He further assumed that the County was still billing residents for sewer usage and stated it would be unfair to cut off service to all those residents living in the three areas, who have likely been paying their bills to the county and are unaware that the bills are not being paid to the service provider.
“If it was as simple as turning a valve and shutting their sewer off, that would be an answer, but it’s not that simple,” Haas stated.
The sewer issue, however, was not the only legal matter discussed during the evening. Haas added that there was a second issue that may also come down to a lawsuit between the City and a county body.
“When SOPA was disbanded or when it was determined it would no longer be involved in economic development in the county and it was determined it was only to be a bonding agency, one of the things that I discussed with the then acting chair was transferring property back,” Haas explained.
He added that the City has transferred some property to SOPA for the purpose of being utilized for a development project. Since SOPA is no longer involved in development, the City has asked for the property to be returned to Portsmouth.
“Once it was determined that they would not longer be involved in economic development, the need for them to hold City property evaporated,” Haas stated.
Haas further stated that he attended a SOPA board meeting in which the board authorized to transfer the property back to the City; however, at the most recent meeting, the repeal of that decision was discussed with several SOPA board members arguing to hold onto the City property at least temporarily. Haas explained to City Council that since SOPA is no longer involved in economic development and is only a bonding agent, there is no reason why they shouldn’t give the City back its property. The City had contracted with SOPA to handle the City’s economic development at the time that the property was placed in SOPA’s care.
“I’m thinking this is another thing we will have to discuss at some point, filing a suit against SOPA,” Haas stated.
He added that since the City was paying SOPA to handle economic development activities and those stopped with several months of the year remaining, SOPA owes the City some of that funding back as well.
“I’m hopeful that the new members of the board will see the light,” Haas stated.”I don’t really know the rationale behind their decision. It doesn’t really make much sense. From an economic development standpoint, I’d much prefer to have those properties sitting in our community improvement corporation so that we can move forward with some economic development.”
However, he made it clear to Council that if these issues are not worked out, a legal fight seems to be the only solution.
Council did vote to pass an ordinance establishing the City’s new economic development organization, the Portsmouth Community Improvement Corporation (PCIC); however, the City still has not hired an economic development director after tabling the decision at the last meeting.
Portsmouth City Council will meet again in regular session at 6 p.m. on Dec. 11 in Council Chambers on the second floor of the Municipal Building on Second Street in Portsmouth.
Reach Nikki Blankenship at 740-353-3101 ext. 1931.
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