Judges question $5 million water bill refund to Youngstown, Nile - WFMJ.com News weather sports for Youngstown-Warren Ohio

Judges question $5 million water bill refund to Youngstown, Niles and McDonald

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MINERAL RIDGE, Ohio -

Is the Mahoning Valley Sanitary District charging too much for the water it supplies Youngstown, Niles, McDonald and the communities they serve?

That's just one of the questions two judges are asking as they consider a proposal to refund $5 million to cities that purchase water from the MVSD.

The proposed refund would need approval from Trumbull County Judge Ronald Rice and Mahoning County Judge Lou D'Apolito, both of whom sent a joint letter to MVSD Attorney Tom Wilson saying that some questions need to be answered before a hearing can be scheduled on the proposed refund.

The MVSD announced last month that it intends to distribute the $5 million in surplus funds to Youngstown, Niles, and McDonald; all of which buy wholesale water from MVSD and re-sells it to individual homes and businesses in surrounding areas such as Girard, Canfield, Mineral Ridge, Lordstown, Craig Beach, and portions of 10 other townships.

21 News has obtained a copy of the letter which informs Attorney Wilson that in order to grant the refund, the MVSD would first need to obtain a written opinion from the Ohio Attorney General, or Ohio Auditor, or some other governmental agency to determine if the transfer of funds is permissible.

The letter goes on to advise the MVSD that if the body can't obtain that written opinion, they would need to hire legal counsel to conduct research and submit written answers to the judge's questions.

The judges say that conducting the research could potentially be very expensive and that the cost would be assessed to the MVSD, whether approval is given or not.

The questions, listed on the more than two-page letter, include the following:

  • What is the purpose of the MVSD and does it have an actual mission statement in its original organization as to purpose?
  • Does the formation of the MVSD permit return of funds?
  • Who exactly does the MVSD represent, the cities, the taxpayers, the end water users and why?
  • Do the current Board Members have fiduciary obligations to the MVSD to preserve its financial well-being?
  • Are there any conflicts of interest of any Board Members in voting for this funds transfer?
  • Has money ever been refunded to just the cities in the history of the MVSD, and if so, when, where, how much and for what was it used for?
  • Other than for political reasons, why does it make financial sense to the MVSD to return the funds rather than be prepared for future MVSD needs, like dam repairs, etc.?
  • Why not give every water consumer a break on their bills instead of giving money to the Cities?
  • If the fund approval were to be approved, can they be restricted to specific projects?
  • Why are other communities such as Poland, McDonald, and Austintown not sharing in the funds based upon surcharges to them? There should be representatives of all the communities that use MVSD water in order to discuss any potential issues further at any public hearing.
  • If there are "surplus funds", is the MVSD over charging for what it does?
  • What guarantee is there that after the return of funds rates will not go up in the near future?
  • Is there a rainy day fund for the MVSD, and if not why?
  • What is the total amount of debt currently for the MVSD? And to whom is it owed?
  • Would it not be smarter for the MVSD to pay off all its debts first? If not explain in detail why
  • Are there bondholders or other secured creditors, and if so, have they approved of this financial dealing?
  • What was the reasoning of the Board for taking this action?
  • Does this set a precedent for the next time financially struggling cities to ask for refunds when you do not have surplus funds?

The judges also notified the MVSD that the reserve the right to ask other questions that may come up.

Rice and D'Apolito are also asking the MVSD to cite any Supreme Court case law that supports or answers any of the questions.

21 News reached MVSD Board President Matthew Blair, who said he was unaware of the judge's letter and therefore was reserving comment.

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