oversight

Review of Certain Aspects of a Water and Sewer Project in Jefferson County, Ohio

Published by the Government Accountability Office on 1971-09-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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Review Of Certain Aspects
Of A Water And Sewer Project
In Jefferson County, Ohio.,,,
Department Of Housing And
  Urban Development




BY THE COMPTROLLER GENERAL
OF THE UNI TED STATES


                                                    ~
                                                   17"   ~            ,7
                 COMPTROLLER GENERAL OF THE UNITED STATES
                            WASHINGTON. D.C. 20648




B-173465




Dear Mr. Hays:

     In your letter dated June 18, 1971, you requested that
we examine into certain aspects of a federally assisted wa-
ter and sewer project near Wintersville, Jefferson County,
Ohio. Your request stated that user charges for water and
sewer services were established at a level which would be
prohibitive to persons having fixed incomes and that the
potential users of the system had not been provided with fi-
nancial information on the level of user charges until after
the system was constructed.

     Our work included an examination into the responsibil-
ities of the Federal Government, Jefferson County, and the
project engineers (Rackoff Associates, Inc.) relating to
the establishment of user charges for water and sewer ser-
vices. We obtained certain information regarding the basis
on which the county had established such charges.

     A brief description of the project and information on
the basis for the user charges are presented in the follow-
ing sections.
BACKGROUND INFORMATION ON
JEFFERSON COUNTY WATER AND SEWER PROJECT

     In January 1969 the Department of Housing and Urban
Development (HUD), under its Water and Sewer Facilities
Grant Program, awarded a grant of $1.5 million to Jefferson
County to assist the county in constructing water and
sewer facilities estimated to cost $4.6 million. HUD has
administratively established $1.5 million as the maximum
grant available under the program. The facilities to be
constructed were designed to provide water service for five
districts of the county and sanitary sewer service for two
of these five districts.

     In addition, the Office of Water Programs of the Environ-
mental Protection Agency (formerly the Federal Water Pollu-
tion Control Administration) in February 1970, under its Con-
struction Grant Program, awarded a grant of $259,310 to the




                       50TH ANNIVERSARY         1921-1971
B-173465


county for a sewage treatment plant, estimated to cost
$790,800, which was being constructed in connection with the
HUD-assisted project.

       According to information provided to us by HUD, the
districts selected by the county for inclusion under the
project were considered by the Jefferson County Regional
Planning Commission to be in critical need of water and
sewer facilities. County and State Departments of Health
officials also concluded that the designated project areas
of the county were in dire need of water and sewer facil-
ities.

     Construction of the facilities was initiated in July
1969 and, according to the Jefferson County sanitary engin-
eer, was about 99 percent complete at July 29, 1971. As
of that date HUD had paid the county $1.35 million of the
$1.5 million grant for the project. The remaining amount--
$150,000--was being withheld by HUD until the project was
completed, an audit of final project costs was made by an
independent public accountant, and all Federal requirements
with respect to the project were met.
ESTABLISHMENT OF USER CHARGES
FOR WATER AND SEWER SERVICES

     With regard to your interest in the apparently high
rates that users would have to pay for water and sewer ser-
vices, we noted that the Jefferson County Board of Commis-
sioners had established the following minimum monthly rates
for such services in the five districts included in the
project.

                                             Minimum monthly
     Type of service      County district         rate
           Water           All districts         $10.50
           Sewer           District M            $10.50
           Sewer           District O            $ 4.60

     The minimum rate for both water and sewer services in
district M--an area west of Wintersville--is $21 a month.
The minimum rate for water and sewer services in district
O--an area north of Wintersville--is $15.10 a month.
B-173465


     We discussed the established user charges with HUD re-
gional officials in Chicago, Illinois; with the HUD area
engineer in Columbus, Ohio; and with the Jefferson County
sanitary engineer. These officials advised us that
the minimum monthly rates had been established at the
above-stated levels so that sufficient revenue would be
generated to provide funds to cover the operating costs of
the facilities and the payment of principal and interest on
funds borrowed for construction of the facilities (debt
service). HUD officials advised us that they had no jurisdic-
tion or control over the amount of user charges levied by
local governments for water and sewer services.
     Information prepared by the county sanitary engineer
in February 1971 showed that the minimum monthly rates for
water and sewer services had been established on the follow-
ing basis.
                         Amount of minimum monthly rate
                        Sewer service            Water service--
                     District M District 0        all districts

Debt service           $7.50       $1.06            $7.51
Operating costs         3.00        3.54             2.99.

     Total            $10.50       $4.60           $10.'50

In general, higher construction costs and the construction of
a sewage treatment plant account for the rates in district M
being higher than the rates in district O.

     The HUD area engineer and the county sanitary engineer
informed us that the rates were set at these levels princi-
pally because of the following factors.
     --The project area was adjacent to the Ohio River and
       consisted of many ridges and valleys, particularly
       in district M, which resulted in high construction
       costs.
     --The number of users per square mile was small.

     --No special assessments were levied nor were fees
       charged for household connections for water service.




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B-173465



     The county sanitary engineer advised us that the aver-
age water and sewer bill would be about $26 to $28 a month in
district M and about $20 to $22 a month in district 0. He
said that the average water bill would be about $13 to $14 a
month in the three other districts.

      With regard to your concern that the potential users
had not been provided with financial information on the level of
user charges until after the facilities were constructed
and that this appeared irregular on the part of the project
engineers, the county sanitary engineer informed us that it
was the responsibility of the county, and not of the project
engineers, to make this information available to the potential
users and that the county commissioners, in fact, had informed
the potential users of the anticipated charges at an early
date.

      The county sanitary engineer told us that, at a public
hearing on the district M sewer project held in 1965, dis-
trict M residents were advised that the minimum monthly
charge for sewer service would include about $3.80 for
operating costs. At this hearing it was.also pointed out
that the monthly charge for debt service costs would depend
upon the costs of construction and the amount of funds
obtained from Federal grants, assessments, and connection
fees.

     The county sanitary engineer told us also that, in
January 1969 when HUD awarded the $1.5 million grant to the
county for the water and sewer project, the county commissioners..
passed a resolution which precluded the county's levying
special assessments for water service provided under the
project.
     In February 1969 public hearings were conducted by the
county commissioners on the proposed water facilities for the
five districts and sewer facilities for district 0.  At that
time information was provided to potential users that showed
the anticipated charges.  These charges approximated the
charge which was finally established by the county commis-
sioners for water service and exceeded the charge which was
finally established for sewer service in district 0.



     We did not obtain written comments from any of the
parties involved in this review; however, this report was
based on information available in their files or furnished
by them and was discussed informally with them.


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B-173465



     We plan to make no further distribution of this report
unless copies are specifically requested, and then copies
will be distributed only after your approval has been ob-
tained or public announcement has been made by you concern-
ing the contents of the report.

                              Sincerely yours,



                        eume Comptroller General
                         Adof   the United States


The Honorable Wayne L. Hays
House of Representatives




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