COLUMBUS Municipalities that charge suburban customers more for water and sewer services could lose state funding under a bill proposed in the Ohio House.
The bill sponsored by Rep. Mike Duffey, R-Worthington, in the House Finance Committee is similar to an amendment he proposed and lawmakers adopted in the state budget last summer. The biggest difference: This bill would affect any city that charges different rates inside and outside its borders, not only Columbus, as was the case previously.
Gov. John Kasich vetoed that amendment amid protests by Columbus, which said forcing the city to equalize rates would threaten regional economic development, including major projects that already were being considered.
Under the proposed bill, a municipality that charges higher water and sewer rates to property outside its limits would face a 20 percent reduction in local government funding and would be ineligible for state assistance for water and sewer development.
Municipalities could lose their local government funding from the state altogether if they require annexation of outside territory or require direct payments unrelated to service costs as a condition of providing water and sewer services.
Municipalities could charge higher rates to outside customers if they show that those rates are linked to "reasonable service costs," Duffey said.
"If it costs more to serve somebody outside, you can include that in your rate charge. As long as you apply that equally and not in a discriminatory fashion, you wouldn’t run afoul," he said.
Lawmakers likely will not act on the bill until at least September, when they return from summer recess.
Columbus is concerned about how the term "reasonable service costs would be interpreted," Richard Westerfield, the city’s water division administrator, said during a hearing on the bill Tuesday.
"The concerns remain (about) the impact this legislation could have on the city's ability to partner with communities for future economic growth," said Councilman Michael Stinziano, who oversees the Columbus City Council's Public Utilities Committee.
Columbus manages the water and sewer systems for much of Franklin County, with most suburbs and the county buying their water from the city. The city has three water plants and about 2,500 miles of waterlines to serve 22 communities.
The average Columbus household will pay about $464 for water service in 2018, about 30 percent less than the $603 expected for the average household that the city serves outside its borders. Sanitary sewer service costs about 4 percent more: $599 for the average city household versus $627 for the average outside household.
Columbus officials have said that the city charges higher rates to suburban customers because it costs more to provide water and sewer services there, and ratepayers in the city are bearing more of the risk for capital projects.