Ohio Legislature Continues Effort to Punish Cities

Bill Would Penalize Cities that Charge Higher Water or Sewer Rates Outside of its Territory and Labels Cities that seek Annexation with the extension of services as 'Predators'

July 9, 2018

Democratic Newsroom

State Rep. John Boccieri (D-Poland) criticized some of his colleagues today for going out of their way to punish cities for extending vital services. House Bill 602 sponsored by Rep. Michael Duffey (R-Dublin) penalizes municipal corporations who extend water or sewer service to communities outside its territory at a higher charge. The penalties in the bill cover a range of consequences including a 20-percent reduction, to outright forfeiture of all Local Government Fund (LGF) distributions from the State of Ohio. The bill makes the municipality ineligible for state water and sewer development assistance.

“My colleagues are finding new and innovative ways to cripple the economic engines of our state,” Rep. Boccieri said. “Ohio has sixteen metro areas that constitute eighty-one percent of the state’s population, eighty-four percent of the state’s jobs and eighty-seven percent of the state’s economic output. Many water and sewer lines are extended for economic development and financed through a rate system that is included within the development package.”

The legislation labels a city a “predatory municipal corporation” if it engages in the following:

-Annexation of outside territory as a condition of furnishing water or sewer services.

-Any “unreasonable requests” by a city for furnishing water or sewer services.

-Withdrawal of water or sewer service from a township or neighboring city for failure to comply with certain conditions by the “predatory city.”

“This legislation is not well thought-out,” Boccieri added. “If the state is going to punish cities for chagrining a fair rate to finance the extension of all that infrastructure, then I see communities not being able to pay for the water and sewer lines, or worse yet – not extending these vital services at all. This law would hurt townships who are looking for water and sewer lines for economic development purposes.”

As a consequence of being labeled a “predatory municipal corporation” the forgone revenue from the LGF is redistributed to the affected areas outside of the city. The bill also states these cities become ineligible for any state sewer and water system development assistance awarded by the Ohio EPA, Ohio Public Works Commissioner, Ohio Water Development Authority and the Development Services Agency. This prohibition applies to any form of assistance, including loans and grants, but doesn’t impact any funds stemming from the Federal Government.