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Charter change could move RES donation forward

10/3/2013 - West Side Leader
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By Stephanie Kist

DOWNTOWN AKRON — An amendment to the city of Akron’s charter will appear on the Nov. 5 General Election ballot that, if approved, would allow the city to donate its Recycled Energy System (RES) to Akron Children’s Hospital.

The proposed charter amendment will be Issue No. 4 on the ballot, and the ballot language will appear as such: “Shall Section 64a of the charter be adopted to allow the donation to Akron Children’s Hospital, its designee or assignee of the city of Akron’s steam and chilled water system to facilitate Akron Children’s Hospital’s ongoing efforts to meet the long-term health care needs of children?”

The proposed donation of the RES — which provides steam heating and chilled-water cooling to Akron Children’s Hospital, Akron General Medical Center, city and county offices and about 50 customers total downtown — comes as Children’s embarks on a 10-year capital campaign that includes the construction of a critical care tower, slated to be completed in April 2015. According to city and hospital officials, Children’s desires to continue to utilize the RES rather than construct a new heating and cooling plant, which would cost about $6 million.

The city charter requires voter approval for the transfer of city utility systems. If voters approve the measure, Children’s would seek a long-term owner or operator and make upgrades to the RES needed for it to continue to support the hospital.

City officials say the city, which has subsidized the operation of the RES to the tune of nearly $28.5 million since 2007, cannot afford to undertake the repairs and maintenance needed for Children’s to have adequate heating capacity for its expansion.

“The city and Akron Children’s Hospital are partnering to bring reliable steam heat service at a reasonable cost to Akron Children’s Hospital, Akron General Hospital and other downtown steam heat users,” said Mayor Don Plusquellic in a statement. “Saying ‘yes’ to Issue [No.] 4 allows Akron Children’s Hospital to meet the long-term health care needs of the children it serves, using reliable steam service at a reasonable cost. Our community owes it to our children and to Akron Children’s Hospital to say ‘yes’ to Issue 4.”

Akron City Council met in a special session in late August to approve placing the proposed amendment on the ballot. At that meeting, Tim Ziga, Children’s associate general counsel, said the hospital needs the system to be dependable and have redundancies, which would benefit downtown customers, as well.

At the meeting, Plusquellic stressed that Children’s and its President and CEO, William Considine, can be trusted to determine that the move is right for the community.

Questions have arisen regarding the proposed amendment from some Council members.

At the special Council meeting, Council members Linda Omobien (D-at large), Michael Williams (D-at large) and Bruce Kilby (D-Ward 2) questioned Plusquellic regarding the lack of an appraisal on the RES and whether it has enough value to the city and should be sold or leased rather than donated.

According to Plusquellic, while the RES loses money overall, its revenue is roughly $10 million to $11 million per year. Plusquellic added that an appraisal would be an unnecessary step — one that would incur cost that eventually would be passed to Children’s patients and their parents — because the RES operates in the red.

Williams suggested that if the RES generates that kind of revenue, it would be of some value.

If voters approve the donation, the actual transfer of the asset would come back before Council for further discussion and examination before it’s finalized.

The Change Akron Now group also has sent numerous emails to its listserv questioning the proposed donation and asserting that the donation is being proposed as a result of the city failing to properly manage the asset.

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