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Briarwood residents protest sewer rate hike at public hearing

4/16/2009 - West Side Leader
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By Pam Lifke

RICHFIELD — Residents of Richfield’s Briarwood subdivision packed the Richfield Village Council chambers at an April 13 Public Utilities Commission of Ohio (PUCO) hearing to protest their sewer provider’s request for a 121.2 percent rate increase.

Water & Sewer LLC, of Woodmere, which currently provides water and sewer service for 36 single-family homes and 36 condominiums in the subdivision, located in the village and Richfield Township, has requested a 121.2 percent increase for its wastewater services. A PUCO staff report has recommended commissioners grant an increase of between 75.65 percent and 77.26 percent over current rates.

Water & Sewer LLC, owned by real estate developer Randy Kertesz, previously agreed to turn over its water lines to Richfield Village, which has an agreement with the city of Cleveland for water service, so it no longer is seeking an increase in water rates. The transfer, which one resident said had been promised by March, has not been completed.

Resident Dean Uher, of Burrwood Drive, said he believed the transfer still was 90 to 120 days away and asked that PUCO commissioners wait until the transfer is complete before granting any rate increase for sewer.

Resident Colleen McDevitt, of Scanwood Drive, said four families from her neighborhood have lost their homes to foreclosure in the last year and attributed part of their problem to the high water and sewer rates charged by Water & Sewer LLC. Residents have said in past meetings on the issue that their water rates are more than $250 a month. She asked PUCO Hearing Examiner Jeff Jones to not recommend the increase to the PUCO commissioners.

Resident Victoria Cowell, of Sawbridge Drive, testified that she had been laid off from her job after a three-month disability leave and broke down into tears as she told Jones the higher sewer bills may push her into foreclosure as well.

Summit County Council President Nick Kostandaras (D-District 1), who is the district representative and also a Richfield Village resident, testified that proposed annual sewer bills of $1,650 per customer were “totally unreasonable.”

Residents maintain they are being penalized for poor business decisions made by the sewer company’s owner. The plant was built with capacity to serve 300-plus homes, said McDevitt, and that oversized facility means greater overhead costs that are being passed on to customers, residents said.

Kertesz, through Richfield Furnace Run LLC, has been denied permission to build high-density housing on the adjacent 116 acres he owns in Richfield Township.

Resident Belinda Stucky, of Scanwood Drive, testified that she believed Kertesz was “holding us hostage” in his effort to persuade township officials to grant the zoning variance he needs for the proposed development. Stucky’s assertion was echoed by other residents.

Richfield Village Mayor Michael Lyons said the long-running dispute over the undeveloped parcel was an issue a year ago when the village, the township and Summit County were working on an agreement with Kertesz to turn over water lines to the village. Over the years, Richfield Furnace Run has proposed several high-density projects, which don’t comply with the township or village zoning regulations, according to Lyons.

“One year ago, when we were working to resolve the water issue, the owner kept trying to insert zoning into the resolution of the water issue,” Lyons said.

In addition to protesting the increased rates, residents testified they did not think the proposed flat billing was fair to all customers. The PUCO staff recommendation sent to commissioners for consideration proposes that each residential customer share equally in the amount Water & Sewer LLC is allowed to charge. That means a household with a family of four would pay the same amount as the household of a single person, residents said.

Barth Royer, attorney for Water & Sewer LLC, said the staff recommendation was made to protect customers. The PUCO staff expected customers’ water usage to increase after the switch to city of Cleveland water. Increased use of water combined with new per-cubic-foot-sewer rates could artificially inflate customers’ bills, Royer said.

The PUCO had a second public hearing scheduled for April 15 in Columbus. Following that hearing, Jones said some briefs may be filed and he would make his recommendation to the PUCO commissioners. The commissioners may act on the rate increase request 30 to 60 days after receiving all recommendations.

When asked by an audience member if PUCO ever denied a rate increase, Jones, seeming uncomfortable, said the commission almost always grants rate increase requests, but not always by the percentage requested.

PUCO regulates investor-owned water and sewer companies throughout the state. According to PUCO literature, utilities, under Ohio law, are entitled to recover from their customers expenses associated with operating a public utility and earn a reasonable rate of return on their infrastructure investments.

In investigating Water & Sewer LLC’s request for a sewer rate increase, PUCO staff members conducted site visits, interviewed company employees and government officials, reviewed company records and performed analysis of data, including financial information from Water & Sewer LLC, PUCO documents stated. The staff recommendations were developed from this information. PUCO commissioners are not bound by the recommendations and can adopt some and reject others.

Going off the hearing record to answer a question from the audience, Jones said he had heard testimony in rate-hike cases for other small water and sewer utilities and the increases requested by Water & Sewer LLC are similar to rate hikes requested in those cases. He said the increase requested by Water & Sewer LLC was similar to a recent request from Mohawk Utilities, which provides water for about 1,000 customers in Carroll County.

Customers who would like to comment may submit written comments with case number 08-227-WS-AIR in the subject line to: PUCO, Attn: Docketing Division, 180 E. Broad St., Columbus, OH 43215. Customers also may submit comments online at www.PUCO.ohio.gov.

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