YOUNGSTOWN — City council agreed to pay up to $130,000 to a law firm for a study that will offer long-term solutions for SOBE Thermal Energy Systems LLC, a troubled utility company that provides steam heat to a majority of downtown buildings.

Council also voted 7-0 Wednesday in favor of a resolution declaring the “existence of a local energy and public utility emergency arising from the financial crisis” of SOBE and “urging immediate intervention and assistance by the state of Ohio.”

The resolution seeks the intervention of Gov. Mike DeWine, the Public Utilities Commission of Ohio, the General Assembly, the Ohio Department of Development “and all appropriate state agencies (to) immediately evaluate and implement all available emergency measures, funding opportunities, grants, loans, infrastructure programs and other resources necessary to preserve utility service to downtown Youngstown.”

The resolution states city council “requests that state officials treat the circumstances described herein as a matter of urgent statewide concern due to the risk posed to public utility service, economic development, housing and governmental operations within” Youngstown.

DeWine has already denied requests from Mayor Derrick McDowell to provide money to help SOBE using the state’s rainy day fund, which has a surplus of at least $3.5 billion, and from the recently-passed capital budget.

After council’s vote to authorize payment up to $130,000 to Roetzel & Andress’ Akron law office for the study, McDowell said it would begin right away and take about three to four months to complete.

The city has already provided public data to the law firm, McDowell said.

Roetzel is working with Marc Divis, president of Akron Energy Systems, who was largely responsible for bailing out steam system problems in Akron and Cleveland.

McDowell said: “Maintaining a temporary solution is as vital as having a permanent one.”

Councilman Julius Oliver, D-1st Ward, which includes downtown, said the Roetzel legislation sets a “new precedent when it comes to passing legislation as far as what’s in our wheelhouse as far as the city’s responsibilities.”

The legislation has the city paying for a study of a private utility with city hall as one of its main customers.

Oliver said: “I don’t want to hear what we don’t do anymore. If sidewalks are needed, if brown water (in the city system) needs to be tackled, if there’s investment needed in parts of the city that becomes a war zone, we’re able to throw money, clearly with this legislation, at problems that are big enough and important enough to tackle.”

Council gave a first reading June 3 to the Roetzel proposal for the study with members saying they wanted more information before approving it.

Oliver said he received that information during a discussion with a Roetzel official.

McDowell pulled the legislation from council’s May 20 meeting in order to discuss it in committee. That committee meeting occurred June 1, but council wanted even more information.

PUCO staff on Monday recommended the commission approve significant emergency rate increases for SOBE Thermal Energy Systems LLC’s downtown Youngstown customers – 145% for most of them during the six months when the steam heat is most used and 75% during the rest of the year.

The report by Christopher Healey, PUCO’s Rates and Analysis Department’s chief of accounting and finance, reads: “Emergency rates are not a permanent solution to a utility’s financial distress; they are intended to be temporary, approved only as necessary to avert a crisis. The goal is for SOBE to be operational and financially secure without emergency rates in place. The clear next step toward this goal is to ensure that all steam heat customers have accurate meters. With accurate meters. SOBE can bill customers based on their actual usage and rates can be set that are sufficient for SOBE to meet its obligations under” state law.

The PUCO board next meets June 24.

Healey wrote in the recommendation that the rate increases, if approved by the PUCO, could take effect as soon as July.

The utility is facing a financial crisis with John C. Collins, SOBE’s receiver, saying it is on the verge of financial collapse and will be out of money by September or October without an emergency cash infusion. Collins requested the emergency rate increases to keep the utility company operating

Because several SOBE customers do not have working meters, Healey wrote: “It is currently not feasible to establish emergency rates based on actual usage” so proportional rate increases are needed. Healey wrote that the PUCO staff recommended Collins “continue to prioritize the replacement of missing and unreliable meters” and have them installed no later than Oct. 1.

Healey’s report blacks out the specific names of the customers next to the proposed rate increases, what they currently pay and what they would pay if the PUCO approves the emergency hikes.

Of SOBE’s 23 customers, 14 of them would see a 145% increase for steam heat usage between November and April. One would experience a 146% increase with two paying 73% more. The others would pay between 108% and 137% more during that time.

Between May and October, which Healey listed as the non-heating season, rates for 15 of SOBE’s 23 customers would increase by 75%. One would see a 76% increase and two would be at 24%. The rest would see an increase of 49% to 74%.