YOUNGSTOWN — City council wants more information about a request from the administration to pay up to $130,000 to find long-term solutions for the troubled utility company that provides steam heat to a majority of downtown before it will agree to fund that study.

Council on Wednesday decided to give a first reading to the proposal to pay Roetzel & Andress for the study rather than approve it by emergency measure even though John C. Collins, receiver for SOBE Thermal Energy Systems LLC, the utility in question, wrote in a court document May 27 that “the company is in the midst of a financial crisis” and will no longer be able to pay for three rented boilers it uses by September or October.

Councilman Julius Oliver, D-1st Ward, who represents downtown, said the legislative body needs to meet with Roetzel officials to find out exactly what the study will show before approving the payment.

“I feel it’s an emergency that we get some answers quickly and ask for a resolution to declare the downtown situation to be an emergency, which will probably give the governor an initiative to tap into emergency (state) funds for the city of Youngstown and we would submit a formal request to the state,” Oliver said.

Water Commissioner Harry L. Johnson III pointed out that nearly all of the work for the study would be done by Marc Divis, president of Akron Energy Systems, who was largely responsible for bailing out steam heat issues in Akron and Cleveland. Johnson said Divis has worked with Roetzel and specifically requested the contract go through the law firm even though he will do virtually all of the work.

Johnson said of Divis: “No one in this room is an expert. He is. This will get the city to a point that at least we have an idea what’s happening over there and various possibilities regarding what the city’s options might be and if someone comes to buy it.”

Oliver said Detroit Thermal Systems may be interested in purchasing SOBE.

Oliver said: “There is no clear indication as to what we’re getting (for the $130,000 study) and what we’re using that information for. What I don’t want is redundancy. We can get the same information if we talk to administrations in Cleveland and Akron and it would be a lot faster. Harry, our water commissioner, gave more of an explanation than what we’ve already heard so there’s more to know.”

At a Monday council public utilities committee meeting, Mayor Derrick McDowell said SOBE is requesting the Public Utilities Commission of Ohio grant a rate increase of more than double what downtown users are currently paying to help its financial situation.

McDowell pulled the Roetzel legislation from council’s May 20 meeting in order to discuss it in committee.

But council wants even more information than what McDowell provided. McDowell was absent from Wednesday’s meeting as he was traveling to Long Beach, California, for the U.S. Conference of Mayors’ annual meeting.

Oliver said if council declares an emergency for downtown utilities because of the SOBE issue, it would make it easier to get funding from the state.

McDowell said Monday that he talked in February with Gov. Mike DeWine about possible funding through the capital budget from the executive branch, though that appears to be too late at this point, with the state’s emergency fund being another option.

McDowell said it would cost about $30 million – $13 million for SOBE’s system and $17 million for the delivery end, including pipe – to get the company self-sufficient.

Oliver said Wednesday: “We could possibly kill our downtown if we don’t do something about this. We’re behind the eight ball. It’s a true emergency for our downtown.”

Collins painted a dire picture of SOBE’s future in the May 27 court document.

Collins wrote SOBE’s monthly income is about $130,000 while its monthly expenses are about $220,000.

It also owes as much as $1,999,656.95 to Enbridge Gas Co. for unpaid utility bills though Collins wrote a complaint with the PUCO about the accuracy of the bill and it could be reduced to “in excess of $500,000,” to be paid over an 18-month period.

Collins wrote David Ferro, SOBE’s CEO, decided in 2022 to scrap three coal-fired and one gas-fired boiler at the Youngstown location, 205 North Ave., and raze the boiler house “leaving in its place a massive hole in the ground, and he took no steps to remediate this potential nuisance.”

In 2019, Ferro, who has since walked away from SOBE, entered into a lease agreement with Wabash Power Equipment Co. of Wheeling, Illinois, for an 800-horsepower boiler to provide heat to customers. After months of SOBE not paying for the boiler – and owing $383,214 in back payments – Wabash repossessed the boiler on Sept. 30, leaving SOBE without any way to provide steam heat to most of downtown.

With the company owing about $4 million to creditors, Ferro abandoned the company’s Youngstown facility.

Collins was appointed receiver Feb. 17 after Reg Martin was initially appointed Sept. 26 to the job. During Martin’s tenure, he rented three boilers, all of which failed at times during January and February, when temperatures were well below zero.