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TALLMADGE -- Although the cost of sewage treatment provided by the city of Akron may increase by 6 percent this year, Mayor Dave Kline says the city of Tallmadge is taking a wait-and-see approach before passing along that hike to its affected residents. As a first step, Kline plans to hire a consultant to conduct a rate study of residential and commercial water and sewer rates. He expects to report back to City Council on the matter this fall.
By a 6 to 0 vote Feb. 9, Tallmadge City Council authorized the mayor to enter into a master meter agreement with the city of Akron for sanitary sewer service. The agreement, which takes effect upon approval and extends through Jan. 1, 2040, provides for a rate increase up to 6 percent each year for the first four years of the contract. Akron's sewer system serves five master-metered areas, including Tallmadge, under separate sewer-service agreements. About two-thirds of Tallmadge is served by Akron sewer.
"Tallmadge was really at the forefront of trying to negotiate this contract and we were what I call 'the hold outs,' trying to get the best deal that we could get for our residents," says Kline. A significant accomplishment contract-wise, according to Kline, is getting Akron to agree to discontinue its practice of billing master meter communities in arrears for uncovered expenses. "We would not give them a blank check, saying if you come up short, we will make up the difference,'" the Tallmadge mayor says. Under the new contract, Akron has agreed to evaluate where it is financially in four years and then make rate adjustments as necessary, Kline reports.
"We [Tallmadge] should be fine," Kline said, explaining the city of Tallmadge raised sewer rates by 25 percent last August for households and businesses in Tallmadge whose sewers are serviced by the city of Akron in anticipation of Akron raising sewer rates for noncity residents. "We're going to sit steady and we're going to work harder on reducing the amount of flow at the master meter and see where we need to go at the end of this year and the beginning of 2017."
Tallmadge City Council has adopted a minimum fund balance policy to ensure the city maintains an adequate reserve of funds in its sewer fund to operate in the case of an emergency or to cover any revenue shortfalls due to collection issues. Tallmadge Finance Director Mollie Gilbride says the minimum fund balance policy requires the sewer fund maintain a minimum fund balance of 25 percent of operating appropriations. The city ended 2016 "right around the minimum fund balance requirements thanks to the rate increase and conservative spending," Gilbride said.
The master meter contract takes a proportionate share approach to allocating costs and rates, according to Chris Ludle, Akron's deputy director of public service. Ludle says Akron will calculate master meter community rates every four years using budgeted costs for the current year and estimated costs for the subsequent three years. The master meter communities' four-year average flow, total suspended solids and biological oxygen demand are applied to the rate model to determine the master meter rate, according to Ludle. Master meter communities are billed based on the volume of flow discharged to the city of Akron sewer system, Ludle says, adding that charge is adjusted based on the strength of the sewage as determined by sampling/analysis.
Tallmadge Law Director Megan Raber says city officials "are very happy" with the provision regarding the setting of rates for four years, saying the scenario "will allow us to better plan which is an important thing we wanted to be able to do."
Council President James Donovan was absent from the Feb. 9 Council meeting.
Twitter: @ EllinWalsh_RPC