MONZEL WILL NOT SIGN MSD COMMITMENT LETTER SAYS COUNTY/CITY PACT “A TERRIBLE DEAL FOR RATEPAYERS”
Cincinnati, OH – Hamilton County Commissioner Chris Monzel will not sign a commitment letter between Hamilton County and the City of Cincinnati that proposes to establish a new, 45-year joint county/city operating agreement for the Metropolitan Sewer District (MSD).
“At the end of 2016, I was hopeful that the Board of County Commissioners could negotiate a new agreement that would give the County full control of the county sewer district and protect ratepayers from overspending and mismanagement by the current city MSD team,” Monzel said.
Monzel said, “A major concern with this proposed agreement is establishment of a five-member Citizens Board that will make decisions on important hiring practices and daily MSD operations. The commitment letter provides for Hamilton County Commissioners to appoint three members to this board while the City will make two appointments.”
“On the surface, that might seem to work to the County’s advantage, but language in the commitment letter also states a supermajority vote of the board (four members) is needed when it comes to hiring and firing and determining the duties of MSD’s director which is critical,” Monzel noted. “The language regarding the supermajority guarantees that the question of who has the final word of operating the system still exists. I believe that a five-person board, not answerable to ratepayers, is unacceptable and should only be advisory in nature.”
The commitment letter also requires that all MSD employees, even new employees joining the system to remain in the Cincinnati Retirement System (CRS). Monzel believes all current MSD retired pensioners should be protected and allowed to remain in CRS. Monzel said, “based on historical precedent, that all newly-hired MSD employees, since they are County employees, should join the Ohio Public Employees Retirement System (OPERS). This precedent was set when the County took over the Municipal Court and City Jail from the City of Cincinnati.”
“To most MSD ratepayers this might seem like a minor point, but the employer contribution to the CRS per employee is currently 16.25 percent compared to 14 percent for OPERS,” Monzel said. Monzel also pointed out that there are strong indications that the 16.25 percent employer share will need to be increased over the life of the agreement in order to keep the CRS solvent. “In this agreement, the City of Cincinnati’s pension fund will be paid on the backs of the MSD ratepayers and that is simply wrong.”
Additionally, this agreement will need significant changes to the Ohio Revised Code (ORC) from the state legislature before it can be implemented in its entirety. ORC changes are required for allowing county employees to remain in CRS and for delegating the Hamilton County Commissioner’s daily operational authority to the MSD Citizens Board.
Finally, Monzel said, “The Commission majority has ignored federal court precedent in determining which governing body – County or City –controls the physical assets of the county sewer system during the life of the consent decree.” He points to a 2010 decision in which the City of Loveland wanted to leave MSD to join the Clermont County Sewer District. Loveland elected officials claimed Clermont’s was a better run system, a better deal for its citizens and that Loveland could take their sewer district assets to join Clermont County.
Hamilton County, joined by the City of Cincinnati, filed a lawsuit to prevent Loveland from leaving the system. The United States District Court for the Southern District of Ohio ultimately found in favor of the County and City, ruling that once Loveland joined MSD its local assets became ingrained in the overall system and under the control of Hamilton County during the consent decree.
The ratepayers of MSD entrusted their elected officials with designing an agreement that brings fiscal oversight and accountability to a system that has been sorely lacking in both over the past 50 years. The new 45-year agreement places oversight in the hands of an unelected board and delays answering the question of asset ownership for at least 45 years. Today’s MSD ratepayers, along with their children and grandchildren will share the costly legacy of this new agreement.