Trending
The situation with SOBE and its terribly mismanaged asset, the old Youngstown Thermal System, is now at a breaking point, threatening to shut down YTS permanently, thus leaving downtown Youngstown as a cold ghost town.
SOBE is now reportedly taking actions to disconnect heat and hot water service to four of their largest customers, leaving those customers' residential tenants in the cold.
This chain-reaction of panic-driven decisions is the result of PUCO's draconian tariff rate increases approved a few months ago.
PUCO approved draconian, self-contradictory rate increases that singles out specific customers to pay more than other customers per unit of heated water delivered.
The entire objective of having utility rate tariffs is uniformity, so no customer gets singled-out, paying a higher rate than other customers.
Instead, PUCO actually approved a bizarrely differing hodge-podge of rate increases for SOBE, ranging between 36% and 163%, singling-out specific customers for higher rates!!!
This raises Constitutional issues of violating the guarantee of Equal Protection under the Rule of Law, and infringing illegally on SOBE customers.
Considering SOBE's mismanagement and Enbridge's rising natural gas prices, YTS is now cash-flowing in the wrong direction. YTS is losing a reported $90,000 per month, which calculates to over a million dollars per year.
To continue operating as it had been (without the draconian and unrealistic rate hikes recently approved by PUCO) the old YTS needs to be subsidized with about a million dollars per year just to stay open.
The most logical entity realistically available to subsidize downtown Youngstown's centralized heating system is the city itself. I doubt whether Mahoning County would participate in subsidizing YTS, but it wouldn't hurt to ask.
Youngstown already wisely invests millions every year into worthwhile economic development incentives. Preventing Youngstown's struggling downtown from becoming a cold ghost town is an extremely worthwhile economic development objective.
SOBE is now being subsidized (de facto) by its unpaid vendors (including Enbridge Gas) and other creditors. That situation is now grinding to a stop, because SOBE's creditors are taking actions to collect what is due to them.
Losing YTS would be inexcusable, especially if it was due to SOBE's corporate mismanagement, and/or the city government's unwillingness to take effective action to end this crisis.
The city's failure to take control of YTS appears to be motivated by a lack of courage and/or a lack of any insightful grasp of the totally bloody obvious.
Is there some type of fantasy-based Libertarian idiot ideology preventing the Mayor and City Council from solving this crisis immediately with the only logical conclusion?
The city of Youngstown could and should take YTS away from SOBE's inept ownership/management and/or Court-appointed Receiver, using Eminent Domain and/or asset liquidation through its Court-ordered receivership.
Losing YTS would be a shameful legacy to be created by Youngstown's officials, who would allow this disgrace to happen on their watch.
Remember the $130,000 study that was prepared by Roetzel Consulting Solutions? This insightful report should be read and understood by the Mayor, his Cabinet, and every member of City Council.
Summarizing this report, it compared the benefits of YTS being operated by a governmental / public entity versus a private, for-profit entity. Quoting from its Executive Summary:
"Section VI sets out why this system’s ownership must transfer prior to investing in the system and going forward should be public or cooperative..."
Also from this report: "Phase II -- choosing between the facility-only and YSU partnership paths -- to put the system on stable footing for the long term..."
Obviously, to accomplish these goals, YTS must be publicly owned, so taking YTS away from SOBE is an essential objective, and the city's duty to its downtown businesses and residential tenants.
Ohio Gov. Mike DeWine has considered funding a bail-out of SOBE, but decided against it because that would be giving money away to a failing private, for-profit business, which he could not do.
However, he indicated that he could provide funding for a public-sector governmental entity like the city from Ohio's "Rainy Day" Funds.
That is why having the city take YTS away from SOBE is essential to acquiring the funds needed to upgrade YTS's infrastructure.
Instead of offering Youngstown help with funding to get YTS out of the disastrous hands of SOBE, Ohio's politicians (except Governor Mike DeWine) got free publicity by offering ways for downtown building owners to go deeper in debt, by buying individual heating systems for their buildings.
This debacle reminds me of the old Peanuts comic strip routine with Lucy pulling the football away, just when the hopelessly enthusiastic and naïve Charlie Brown tries to kick it. The result always was poor Charlie Brown landing flat on his back, humiliated again.
Please do not allow that to happen to downtown Youngstown.
James J. Pirko is a Youngstown resident.