AMERICAN TOWNSHIP — To protect themselves from alleged predatory practices undertaken by municipalities, some Ohio townships are looking to the statehouse to rewrite the rules regarding utility pricing.
“Municipalities have a monopoly,” said American Township Trustee Paul Basinger. “There’s no state law to protect us.”
Basinger recently introduced and — along with American Township trustees — passed a resolution signaling support of House Bill 602, which would withhold state funding from municipalities that offer unequal utility rates to those outside of city bounds or require annexation if utility services are requested. Local municipalities practice both.
The largest municipality in the region to do so is the City of Lima, which provides water to roughly three fourths of Allen County residents. Those outside of city boundaries pay higher rates.
Basinger called the higher charge a hidden tax on the populace.
The other option for American Township residents is requesting utility services from the Village of Elida. In that case, residents are also required to apply for annexation — a change Elida made in 2018.
But state support for such a bill has been hard to come by. House Bill 602 was introduced in 2018 and failed to move out of committee. A similar bill, House Bill 163, has since been introduced this past March, and it is currently sitting in the House’s Public Utilities Committee hearing testimony. Among its supporters are the Hamilton County Township Association and Ohio Township Association.
“The OTA is very concerned about the cost of water for township residents,” OTA Executive Director Matthew DeTemple stated. “Frequently, they are charged much more than municipal residents, and it can be difficult to get an explanation from the city providing the water as to why township residents are being charged significantly more. We are gratified that the legislature is considering legislation to address this critical issue.”
But if townships are looking to change the law, they’re going to have to go up against the municipalities. Seven cities in Ohio, including Columbus and Cincinnati, spoke out against the law, and they were joined by a number of municipal organizations, such as the Ohio Mayors Alliance.
OMA Executive Director Keary McCarthy argued that penalizing municipalities for charging unequal utility rates would simply incentivize local governments to quit offering utilities outside of a municipality altogether. The secondary option — leveling rates across the board — would be up-charging city residents for a cheaper service.
“It is a standard practice among water and sewer systems nationwide to maintain differential pricing among customer localities. These costs are estimated based on cost of service studies that factor in such things such as geography, population density and distance,” McCarthy said in a public address to the house’s public utilities committee.
Basinger said he will be looking to other townships in the area to pass similar resolutions in support of a change in the state law.
Reach Josh Ellerbrock at 567-242-0398.