Middleburg Heights mulls new 20-year Cleveland Water contract - cleveland.com

Middleburg Heights mulls new 20-year Cleveland Water contract - cleveland.com

MIDDLEBURG HEIGHTS, Ohio – Middleburg Heights City Council is carefully reviewing all documents contained within a new 20-year Restated Water Service Agreement (WSA) with the Cleveland Water Department to make sure signing them is in the best interest of the residents and the city overall.

“We own a lot of water lines, and there’s a lot of work to be done,” Middleburg Heights Public Service Director Jim Herron said.

CWD Commissioner Alex Margevicius spoke to council during the Feb. 12 Streets Committee meeting. The new proposal includes a restatement of the current water service agreement, as well as a new economic development agreement, municipal utility district agreement and asset transfer agreement.

“This is a new way to do business that helps address the problems with the local infrastructure,” Margevicius explained.

A long discussion ensued because CWD and Middleburg Heights would be bound to a contract that forbids business poaching. If a business with an annual payroll of $500,000 or more relocates from Cleveland to Middleburg Heights, Middleburg Heights must pay Cleveland 50 percent of future income tax revenues from that business for five years.

“To my knowledge, there has never been a case of a business moving from the city to the suburbs where any of these terms had to be invoked,” Margevicius said.

Middleburg Heights Economic Development Director Charles Bichara made it clear the city does not poach.

“We don’t ever approach another community,” Bichara stressed, expressing his concern about the impact to Middleburg Heights of the “low” $500,000 payroll stipulation. “We stand ready to assist the businesses if it comes to our attention that they’re looking.”

Information provided by CWD indicates Middleburg Heights has 13 miles of pipe that was installed in the 1920s. The city has a total of 67 miles of pipe, with the oldest mains susceptible to future failure and with the potential to cost $26 million to replace.

Herron encouraged council to consider whether the economic development agreement’s financial impact would be greater than the “hundreds of thousands of dollars” the city – and not CWD – will have to spend “sooner rather than later” for water line repairs. Finance Director Jason Stewart said “the trade-off” can be difficult to determine.

Additionally, under the new agreement, Middleburg Heights’ water distribution mains would be transferred to CWD because CWD must own those assets before it can reinvest and improve them.

As of Feb. 12, 42 communities have signed the new WSA. Cities that have not include Brook Park, Strongsville, North Olmsted, Westlake, Independence and Solon.

If the city does nothing, it will remain under the current contract.

Read more stories from the News Sun.