Regional agreements discussed with city of Cleveland
By Ben Saylor
Rocky River
Published Feb. 7, 2007

J. Christopher Nielson, Water Commissioner for the city of Cleveland, spoke about the new proposed regional water service and economic development agreements at Monday’s City Council meeting, but the city is still far from taking any action either way on the issue.

The agreements, which have already been proposed in Fairview Park and Bay Village in addition to other communities outside the West Shore, would transfer ownership of all water mains over to the Cleveland Water Department. Rocky River currently owns only distribution mains that are 20 inches or shorter in diameter.

Cleveland Water would not only be responsible for repair and maintenance of the distribution mains (which they already are), but they would also be responsible for capital improvement and the cleaning, lining and replacement of the distribution mains. Currently, Rocky River is responsible for capital improvement and the cleaning, lining and replacement of the distribution mains.

The other agreement discussed by Nielson is the Joint Economic Development Zone (JEDZ) agreement. The JEDZ agreement is designed to prevent suburbs from poaching businesses from Cleveland and vice versa. Under it, the city losing a business receives 50 percent of future income tax revenues for five years from jobs that are in existence immediately prior to the relocation. It also places a limit on real estate tax abatements within the county to induce businesses to move. Under the agreement, neither city can offer an abatement higher than 75 percent and the period of the abatement can last no longer than 10 years. Income tax abatements are not allowed under the agreement. These terms would only apply to businesses moving between Cleveland and Rocky River, and only for businesses with payrolls of $500,000 or more.

The proposed agreements would have a minimum term of 20 years. For the water service agreement, the amendment may be cancelled by either party through written notice no earlier than five years prior to the date of the agreement’s termination. However, notice cannot be given until 15 years after the start of the amended agreement period.

For the first five years of the program, the Cleveland Water Department has proposed a five-year, $50 million program (money divided up amongst participating suburbs) where suburbs propose projects. The water department’s Technical Review Committee then ranks the projects based on four criteria: water main break rate, fireflow deficit (capability of main to provide fire protection), water quality problems and protection of new pavement. The protection of new pavement consideration will be scored higher than the other three criteria, Nielson said.

The project list generated by the committee is then submitted to the Suburban Water Council of Governments for comment, with the public utilities director granting final approval for projects. The water department would then re-evaluate the list and new project requests every two years.

City Council asked many questions about the agreement, particularly the priority list. Nielson said that a common concern among the suburbs is whether, based on the priority list, their own projects will ever be completed. Councilwoman-at-large Linda Bartolozzi expressed concern at the fact that the priority list would be in the hands of the Cleveland Water Department, and asked if Rocky River would be able to get more frequent updates if it entered into the agreement. Nielson said he would not “be averse” to the suggestion.

Councilman Frank Gollinger said, in regards to the JEDZ that there is “very little commercial activity” in Rocky River. Council President Brian Hagan also pointed out that the city of Rocky River has never used tax abatements as an inducement to businesses to come into the city.

Nielson was also asked whether the $50 million allocated for the first five years of the agreement would be enough. “No,” he said, “but I think it’s enough to get started with.” He added, “We don’t want to get carried away, but ultimately we don’t want to underfund it.”

Nielson said the figure will probably go from the current $10 million a year amount to $20 million, but that for the first five years the department wanted to “experiment” and also see how many cities would enter into the agreements.

Gollinger also asked for a list of break rates in the area and to have Rocky River’s numbers listed in relation to the whole system to get a better idea of whether the city would get money for water repairs.

“It looks great on paper,” Gollinger said, “but it is not without its challenges.”

Nielson said the water rates have gone up as of Jan. 1, and the increase is going into the $50 million fund whether or not Rocky River enters into the agreements. He said Parma Heights has signed the agreement, but will have to re-sign as changes have been made to the agreements. Euclid, South Euclid and Orange are all waiting for the revised agreements but have instructed their leaders to sign.

Hagan said that council will wait until they receive the amended agreements, and then begin discussions and the process of putting them up for vote as resolutions.

Mayor Pamela Bobst was absent from the meeting due to illness.