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Cranley: County threatens city pension deal

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Posted at 5:17 PM, Dec 16, 2015
and last updated 2015-12-17 10:15:28-05

CINCINNATI -- Wednesday brought a new episode in what's shaping up to be a years-long soap opera between the city and county over the Metropolitan Sewer District.

The crux of the fight are billions of dollars in upgrades to the countywide sewer system, mandated in a consent decree with the federal government. The decades-long work is needed to keep raw sewage out of local waterways during heavy rainfalls, which violates federal clean water laws.

Hamilton County commissioners claim ownership to the district and set its budget, while the city of Cincinnati is responsible for its day-to-day operations.

Adding fuel to the fire: The 50-year agreement that set up the joint sewer district expires in 2018, so both the city and county are jockeying for the best negotiating position when they consider whether to renew it. (County commissioners have already called for an early divorce, a move that would almost certainly end up in court.)

Perhaps the biggest punch to land Wednesday was a question over how much MSD really needs to pay into the Cincinnati Retirement System, the pension fund for thousands of city workers (including MSD staff). Cincinnati is unique in Ohio in that it has its own pension system, rather than paying into the statewide system. And Cincinnati Mayor John Cranley, along with other city leaders, just came to an agreement with current and retired employees on a deal to shore up the long-underfunded pension system over the next 30 years.

U.S. District Judge Michael Barrett helped hammer out the arrangement as a way for the city to resolve multiple lawsuits over its pension at once, and the move has helped bolster the city's credit ratings.

County commissioners claim the city has ignored their requests for details on the funding formula and threatened to withhold money from the pension system -- a move Cranley says flies in the face of Barrett's order and threatens the pensions of thousands of city workers.

Cranley said he'd sent an email asking to meet with commissioners next week and was waiting to hear back.

Commissioners on Wednesday also announced they agreed to cut $45 million from MSD's requested budget -- a move to stave of the year-after-year rate increases that have hit homeowners and businesses hard in recent years.

Cranley said those cuts were proposed by the city and that he appreciated the commissioners' support of them. If the cuts hadn't been made, commissioners said, rates would've gone up 4 percent next year.

Commissioners also called into question how the city-managed district is spending money on legal expenses -- the county says the city is using MSD ratepayer money to pay for attorneys to battle the county.

For its part, city leaders take issue with the county claiming ownership over the district: they point to a 1968 ordinance allowing the county to use the city's sewer infrastructure, but say that law never transferred title to the county.

"In fact, the County has specifically acknowledged in its public offering statements to the bond market that 'the City retained legal title to all such facilities,'" Scott Stiles, then interim city manager, wrote to Council in August 2014. "The City-owned assets are currently valued in excess of $1 billion."

But just weeks before Stiles' memo, a federal magistrate ruled that Hamilton County is the lawful owner and controller of the Metropolitan Sewer District. U.S. District Court Magistrate Karen Litkovitz found the city doesn't have the authority to impose its own rules over MSD because the county is the ultimate decision-maker.

That ruling centered on the city's so called "responsible bidder" law, which, among other things, required companies bidding on work valued at $400,000 or more to employ apprentices and pay 10 cents per hour for each worker into a fund for a pre-apprenticeship program. The county objected to those rules and ultimately prevailed.

Ultimately, Cranley said he hoped the city and county would sign onto an extension of the 1968 deal with amendments both parties could agree on.

The sewer district will be a key point of debate in the upcoming race for Hamilton County commissioner: Incumbent Greg Hartmann, a Republican, stunned many when he decided he wouldn't run for reelection after State Rep. Denise Driehaus, a Democrat, announced she was entering the race. Colerain Township Trustee Dennis Deters, a Republican, emerged late Wednesday as his party's likely candidate when Cincinnati City Councilman Charlie Winburn, who'd been considering a run for county commission, filed as a candidate for county recorder instead.

Deters, 40, is the youngest of eight siblings, including Hamilton County Prosecutor Joe Deters. If elected as commissioner, Dennis Deters would oversee his older brother’s budget. Dennis Deters said that wouldn’t be a conflict of interest for him and called it a “red herring.”

“When I’ve comes down to it, I’ve always done what’s right,” Dennis Deters said. “I don’t foresee a conflict of interest reviewing a budget, as attorneys we’ve both got ethical standards.”

Andrew Pappas, a Republican trustee from Anderson Township, also filed to run against incumbent Commissioner Todd Portune, a Democrat.

Hamilton County commissioners make $87,075.

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WCPO.com's Amanda Seitz contributed to this report.