County leader wants sewer deal ended early

Posted at 7:53 AM, Nov 20, 2015
and last updated 2015-11-20 07:53:10-05

CINCINNATI -- When it comes to the unhappy marriage of the city-county sewer system, Hamilton County Commissioner Todd Portune thinks it's time for a divorce.

Portune said the current arrangement -- a 50-year agreement formed in 1968 under which the county owns the Metropolitan Sewer District but the city runs it -- leaves the agency "accountable to no one."

"And we've got another two-and-a-half years to go before that agreement ends of its own volition, but that's going to be two-and-a-half years too many, and it really is time to bring that to an end," Portune said Thursday night.

The spat went from simmer to heavy boil in recent years, as the sewer district has embarked on a decades-long upgrade of its system to comply with federal clean water laws. Under a consent decree with the U.S. Environmental Protection Agency, MSD will issue contracts for about $3.2 billion in work to improve and upgrade the aging sewer system over the next 20 years.

MSD ultimately must treat or prevent 85 percent of the sewage overflows into local rivers and streams.

All that work has led to year-after-year rate increases -- Hamilton County Commissioner Chris Monzel said a 5 percent increase is likely for next year -- and left the city and county sparring over how to best control costs.

For example, City Manager Harry Black earlier this month told Cincinnati City Council that MSD might be paying more than the industry standard for certain services. The news came in a Nov. 6 memo to City Council focused on Master Service Agreements -- basically, a way of contracting out jobs on an as-needed basis without putting those jobs out for bid.

Those Master Service Agreements let a project manager choose the vendor who gets the work -- and, Black wrote, MSD was only using a small number of vendors, creating "an appearance of unfairness regarding how work assignments are awarded." The city manager said he was working to change the process so contracts were more competitive, and in turn, potentially more cost-effective.

Hamilton County Administrator Christian Sigman said he couldn't comment Thursday on details of a Federal Bureau of Investigation examination into the sewer district. He said the county has been "hamstrung" in attempts to monitor the sewer district's work because it's operated by the city.

Ending the deal early, as Portune wants, seems certain to be contentious and likely to end up in court. For example, city leaders don't agree with the county's claim to total ownership of the system; 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.

During an economic development meeting last month, City Councilman Christopher Smitherman urged city prosecutors to work out a deal with the county.

"My colleagues are not interested in a divorce," Smitherman said. "We're interested in a continued marriage with our county partners around MSD."