Tuesday, April 03, 2001

Hamilton may sell waterworks

County offers to buy system, end dispute

By Earnest Winston
The Cincinnati Enquirer

        HAMILTON — City officials are considering an offer by Butler County to buy its water system.

        This comes just three weeks before oral arguments are to begin in the county's appeal of a judge's decision to throw out its water lawsuit.

        Butler County sued Hamilton three years ago, accusing the city of overcharging the county for water. A judge threw out the lawsuit in 1999, and the county appealed.

        A three-judge panel from the 2nd District Court of Appeals in Dayton is scheduled to hear oral arguments April 23.

        The latest wrinkle is Butler County commissioners' offer last week to buy the city-owned water utility for nearly $90 million. The deal would end the county's appeal and the city's $2 million-plus lawsuit, filed in February, against the county. Hamilton claims the county's purchase of water from Cincinnati in 1999 breached its 1989 agreement to purchase most of its water from Ham ilton until 2021.

        The litigation has cost the city and the county more than $1 million each.

        Though city officials say they are skeptical of Butler County's offer, they plan to respond after having experts examine the deal, which also calls for a rate reduction for city and county customers.

        “I will keep an open mind and review the proposal carefully, but I am quite skeptical that it can be so good,” Mayor Adolf Olivas said.

        Butler County commissioners said their offer derives in part from their concern about the city's dire financial situation.

        “(We) would not want to see the quality of (emergency services) erode or the police officers and firefighters face the jeopardy of possible layoffs,” the commissioners said in a letter to city officials.

        According to the proposal, the county would:

        • Pay the city the book value for the water system, including all processing and distribution facilities, which was worth $28.5 million in 1999.

        • Assume the water system's $55 million debt.

        The deal would also allow the city to use more than $4 million now being held in the city's rate stabilization and debt-service reserve fund.


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