YOUNGSTOWN — A second attempt by SOBE Thermal Energy Systems LLC’s court-appointed receiver to use an old Youngstown State University pipeline to provide backup energy for much of the city’s downtown failed while the current system experiences leaks.

Also, efforts by Youngstown Mayor Jamael Tito Brown and state Rep. Lauren McNally, D-Youngstown, to get the state to provide emergency relief and / or financial assistance is going nowhere.

Dan Tierney, Gov. Mike DeWine’s spokesman, said Tuesday the governor’s office received the letters sent last week. The two wrote they had no faith that Reg Martin, the court-appointed receiver, can provide heating, cooling and hot water services to 28 downtown customers.

Tierney said Tuesday that the governor doesn’t have authority to make an emergency declaration or to provide state funding to run SOBE and the receiver “is the mechanism that is in place” for these issues.

“The receiver is the last resort,” Tierney said. “They’re already there. The ultimate goal is to make sure the utility is operational during the cold season and to eventually find a permanent owner.”

But finding that permanent owner is going to be extremely difficult after Martin said at an Oct. 22 meeting that SOBE, which was about to go out of business before he took control Sept. 26, is “insolvent” with no assets besides its building and a few pieces of equipment while owning about $4 million to creditors.

Tierney said state law addresses what happens when a utility is about to default by having a receiver appointed. Any state funding or emergency declaration would have to come from the General Assembly, Tierney said.

Also, a YSU official said Tuesday that another effort to use the school’s backup boiler isn’t going to work.

“There’s too many impediments because of the condition we find their lines in,” said John P. Hyden, YSU’s associate vice president for facility and support services. “It’s impossible to back-feed their system. The line is leaking so badly. Also, we can only run two boilers at a time and we’re going to use two in thewinter. We don’t have the capacity to do it in the winter. It’s not going to happen.”

Martin was appointed SOBE receiver Sept. 26 at the request of the Public Utilities Commission of Ohio.

HISTORY

A rental steam plant that provided utility services for SOBE customers was repossessed Sept. 30 by court order because SOBE owes $383,214 in back payments to the steam plant’s owner.

Martin was able to get a smaller rental steam plant a few days after the old one was repossessed. But it took until Oct. 9 for it to operate, leaving customers without steam heat and hot water for 10 days. Martin said that only impacted three customers, but others at an Oct. 22 meeting called by Martin said they had issues.

Martin said the rented 650-horsepower boiler isn’t a final solution. The boiler from Power Mechanical Inc. of Newport News, Virginia, costs $19,750 a month to rent, Martin said.

Martin had contacted YSU the day before the old plant was repossessed to see if SOBE could use the school’s boiler system through an old piping system. That effort failed Oct. 1 because leaks were found in the system, which hadn’t been used in more than nine years.

Martin said at the Oct. 22 meeting that the main problem could be fixed for about $25,000 because a contractor caused damage to the pipe at the Rayen Avenue and Elm Street intersection. The work should begin next week and take about three days to finish, Martin said.

There could be other smaller leaks on the line with Martin estimated the cost of repairs at $5,000.

But Hyden said Tuesday it’s not going to work out.

Martin has previously said he can rent a 250-horsepower boiler, for about $12,500 a month, to be used with the existing boiler. The repossessed boiler was 800 horsepower. To rent one of that size would cost about $27,000 a month, Martin said.

Asked Tuesday about other options, Martin said, “We’re working on everything right now.”

Martin also said as his small crew is turning on valves, small leaks are being found in the system that is temporarily not providing steam heat to customers.

One such leak happened about 7 a.m. Tuesday to city hall that was quickly fixed, Martin said.

“We got the leak fixed and we’re fixing another leak,” he said. “It’s interrupting steam to specific buildings, but they are brief interruptions.”

Martin pleaded with city officials at the Oct. 22 meeting to assist him by allowing him to again use a chilling system on the roof of the city-owned 20 Federal Place for the attached Wick Towers, saving SOBE $14,000 a month, and assistance with utility work.

Brown said the city is a customer and not a partner. He rejected the requests.

PAYMENTS

Documents filed with Mahoning County Common Pleas Court shows Martin is being paid $200 an hour to be SOBE’s receiver and attorney Kenneth A. Goldberg is being paid $375 an hour to act as his legal counsel.

An Oct. 15 request for the compensation rates, filed by Goldberg, states when Martin was receiver for Youngstown Thermal, SOBE’s predecessor, from 2017 to 2019, he was paid $150 an hour and Goldberg received $300 an hour.

“Now eight years later, a 25% increase in both hourly rates is very reasonable and consistent with customary rates in the community,” Goldberg wrote. “In fact, the proposed compensation rates are lower than the regular hourly rates charged by the receiver ($250) and counsel for receiver ($420).”

Judge Anthony Donofrio approved the rates Oct. 16.

Goldberg on Friday submitted the first motion for approval of fees and costs.

Martin incurred $15,478 in fees and costs for Sept. 26, the day he was named receiver, to Oct. 12 and Goldberg wrote he is owed $13,788 between Sept. 29 and Oct. 21.

Martin’s fee is for 71.25 hours of work as well as 5.75 hours at $45 an hour largely for email and texts between Martin and his management service company. In addition to Martin’s fee is $968.80 for four trips to Youngstown from his home in the Columbus area at 70 cents per mile.

The details of Martin’s expenses included numerous meetings; on-site visits to SOBE’s facility, 205 North Ave.; discussions about connecting to YSU’s system; meeting with David Ferro, SOBE’s CEO; getting the rented boiler from Power Mechanical; meeting with PUCO staff; a meeting with city officials’ dealing with Chase Bank over potential check fraud; speaking with SOBE customers and reporters; reviewing a complaint from the owner of the DoubleTree by Hilton hotel building owner on chiller services; and on Oct. 12, reviewing a report for salable items as well as discussing the “possible building demolition and sale of property to raise funds to operate.”

Goldberg billed for 36.9 hours for work including researching “numerous lawsuits filed against SOBE” and multiple telephone conferences with city and PUCO officials; attending a court hearing; reviewing the agreement with the DoubleTree building owner; reviewing the Power Mechanical agreement; conversations with Martin about the rented boiler, their compensation fee request and how to communicate with the media; preparing for and then attending a meeting with PUCO officials; talking to Martin about complaint letters from the city; and drafting collection letters to Erie Terminal Place, Private Stash, Jim’s Battery and 22 Market St.

Martin mentioned during the Oct. 22 that there were four undisclosed customers delinquent in paying their utility bills. The four businesses listed in Goldberg’s collection letters are presumedly those four businesses.

Goldberg also billed $112.50 for an Oct. 6 conversation with a reporter from The Vindicator.

Asked about the hourly billing and where the money will come from, Martin deferred comment to Goldberg, who couldn’t be reached Tuesday to discuss the issue.

Andy Resnick, the city’s spokesman, said, “Instead of talking about pay raises, why don’t we talk about how we can consistently get heat to downtown Youngstown? The state is negligent in ensuring that downtown receives public services provided per their obligation.”