By Commissioner Todd Portune, Commissioner Denise Driehaus,
Mayor John Cranley, and Vice Mayor David Mann
Over the course of the last several months, through court-mandated mediation, the City and County have worked diligently to come to an agreement regarding the leadership and administration of the Metropolitan Sewer District (MSD). The result of this mediation is a proposed agreement that will allow two governments to move forward in partnership to run MSD in a way that is to the utmost benefit to our constituencies.
Through this partnership, MSD operations will transferred to a dually appointed Citizens Board tasked with oversight of the MSD director and daily operations. The board will be composed of five members consisting of two City appointees and three County appointees.
A cooperative solution is the most responsible course of action that best serves the interest of the ratepayers. To resolve the longstanding dispute through litigation, regardless of which party prevailed, would put at risk hundreds of millions in ratepayer dollars, the City’s historic pension settlement, and credit ratings for both the City and County.
This agreement saves ratepayers’ money. Immediate savings will occur simply from resolving ongoing legal disputes, eliminating $5 million per year that both governments spend in litigation and oversight. Over time, real savings will also accrue as a more stable governance structure provides for greater efficiency and strategic utility. The largest savings from this agreement likely comes from avoiding a judicially imposed solution. Taking this billion-dollar dispute to court is a no-win scenario for ratepayers. Regardless of the outcome, MSD ratepayers and taxpayers would have to come up with the money to satisfy a judgment resulting in massive rate hikes and continued instability.
The agreement creates a utility that is more accountable to voters though ongoing partnership. The 500,000 County residents living outside the City of Cincinnati, who for years have felt as though they did not have a voice in the management of MSD, will have representation on the Citizens Board through this agreement. A supermajority vote will be required for important decisions such as matters of administrative oversight and environmental justice to protect the interests of all constituencies. County Commissioners will retain authority over rates, budget, and major legislation, ensuring that big decisions will be made by elected officials who are accountable to the voters.
Our plan protects the City pension. The City’s historic pension settlement placed the Cincinnati Retirement System (CRS) on a solid path toward financial stability and resolved years of uncertainty. Under this agreement all MSD employees will be kept in CRS in perpetuity to ensure the City’s pension remains solvent. The approach taken in the agreement is cost-neutral to the ratepayers and to the pension system. There are certainly other approaches, but those come with a price tag over $140 million and a big rate increase to pay for it. This provision will require approval by the Ohio legislature, but early conversations with state lawmakers make us hopeful they will understand how important this consent is to the economic stability of our region.
The long-term stability of our sewer utility is critical to our region. Under the agreement, the County and the City has set aside the dispute over asset ownership without waiving any legal rights, and pledge cooperation for 45 years. The benefit of this approach is that it is cost-neutral. Any permanent resolution over this ownership dispute would require a substantial settlement payment, which would hurt ratepayers. MSD faces a substantial challenge in complying with the federally mandated $3.2 billion consent decree, and the ratepayers are already suffering enough because of that financial hardship.
We are proud that this proposal has bipartisan support, as well as the support of the Cincinnati USA Regional Chamber of Commerce and the unions who represent MSD employees. As local governments, we have an obligation to deliver these fundamental services without interruption and in a manner, that is fiscally responsible. In the end, our community is faced with a choice between a collaborative solution or continued dysfunction and the disastrous effects of litigation. We choose collaboration.