Judges may have considered outdated information in MVSD ruling

By Jordan Cohen



A ruling by the court of jurisdiction dismissing the Mahoning Valley Sanitary District’s motion to distribute $5 million in rebates to its three member communities may have been based on outdated information from the state auditor’s office about the district’s debts.

The attorney representing the district said the court never conducted a hearing on the proposal. It remained “dormant” for seven months until the judgment entry was issued.

“Had we had a hearing, we could have presented updated numbers,” said Atty. Thomas Wilson, MVSD legal counsel.

In the ruling issued last week, Judges Lou D’Apolito and Ronald Rice, who called the proposal “ill advised,” cited the lack of support from the state auditor among the reasons for the rejection. Ohio Chief Deputy Auditor Robert Hinkle had written a report in opposition noting the MVSD’s existing debts include $38.7 million in loans from the Ohio Water Development Authority and payments on $9 million in bonds.

The judges said in their ruling that the request for distributing the $5 million in rebates “was not supported by the state auditor.”

Wilson said the bond figure is out of date and believes it was based on an audit conducted in 2016.

“We made payments each December in 2016 and 2017,” Wilson said. “The last payment [of $2.5 million] is due December 2018, and we have set aside money to pay for that. “We would have explained all of that in a hearing,” he said.

Wilson said the loan payments on the OWDA loans are long term and will be paid off “over decades.”

The district also faces long-range repairs to the Meander Dam estimated at $28 million, which will also be paid off long term according to former MVSD board chairman Matt Blair, whose term expired this month and is no longer on the board.

The MVSD, citing what it said were excessive cash reserves, had proposed refunds of $3.7 million to Youngstown, $1.2 million to Niles and $100,000 to McDonald. Blair said that in a five-year period, the district’s cash on hand climbed from more than $27.3 million to more than $40 million.

Niles included the $1.2 million it would have gotten into its financial recovery plan and now has to put a new plan together by July to make up the difference. “Two consultants said we have excess funds,” Blair said. “I don’t know of any public entity with those kinds of cash balances.”

Wilson, however, declined to criticize the court for the ruling. Attempts for comment from the court Friday were unsuccessful.

As if to buttress the MVSD’s financial stability, S&P Global Ratings, a division of Standard and Poor, “affirmed its A+ underlying rating with a stable outlook” for the MVSD, which it issued last month. In its report, S&P lists “the system’s demonstrated ability to maintain strong debt service coverage and cash.”

Subscribe Today

Sign up for our email newsletter to receive daily news.

Want more? Click here to subscribe to either the Print or Digital Editions.