City questions costs

U.S. Army Corps of Engineers hasn’t explained increase, says Shidaker

By John Hamilton - and Tom Barr - The News Journal

Caesar Creek Lake dam.

John Hamilton | News Journal

The U.S. Army Corps of Engineers is the agency that bills the City of Wilmington for a portion of the operation and maintenance at Caesar Creek Lake.

John Hamilton | News Journal

WILMINGTON — The city is in a dispute with the U.S. Army Corps of Engineers that involves hundreds of thousands of dollars.

Wilmington leaders say the city is being unfairly billed by the Corps of Engineers for operation and maintenance costs related to the city’s primary water source — Caesar Creek Lake.

The city also recently received an invoice for a much larger amount than ever before — with no explanation, and with no itemization of these costs.

While the city is happy to pay for the water its residents use along with some operations and maintenance costs related to the dam and water storage, City officials are extremely concerned that its residents are footing the bill for just about every imaginable item purchased for the state park and its Visitor Center.

These costs range from $400 toilet paper holders to bird seed to calendars to painting, as well as to hundreds of thousands of dollars toward paying portions of paychecks of state staff and contractors routinely earning $50-100 per hour or more.

On April 26, the City of Wilmington received a water usage bill from the Ohio Department of Natural Resources (ODNR) totaling $57,960 for the city’s First Quarter Principal & Interest payment for June 1 through Aug. 31, 2018.

The quarterly bill is due June 1, and those bills are routinely paid by the city.

However, city leaders’ collective jaw dropped when a second bill came from the ODNR , also with a due date of June 1.

That bill totaled $481,569.32.

It is broken down into two parts: $294,419.25 for “Payment from July 1, 2018 through June 30, 2019 — operation and maintenance cost for Caesar Creek Reservoir” and another $187,150.07 for “Underpayment Cumulative 2008-2017.”

The city, however, says it’s not the State of Ohio that’s gouging Wilmington; the state is a pass-through for the Army Corps of Engineers, from which the bills originate. The ODNR simply forwards the bill it receives from the Corps on to Wilmington.

In 1990 the city entered into a 50-year contract with the State of Ohio to use Caesar Creek Lake water. This agreement is in effect until 2040.

A contract amendment signed in 2004 between the city and the ODNR states that, “If the city is the sole raw water customer, then the following shall apply:

• “The annual sum shall not be less than 7 MGD [million gallons per day] multiplied by 365 days multiplied by the water rate …

• “The city shall also reimburse the state for all operation and maintenance (O&M) costs charged to the state by the United States of America as required by the Corps Contract. The state shall bill the city and payment shall be made on or before June 1 of each year in which O&M costs are charged to the state by the United States of America as required by the Corps Contract.”

In other words, as the city is indeed the lake’s only water customer, the city must pay for 7 million gallons (as opposed to the around 2 million actually used), as well as a portion of Caesar Creek’s operations and maintenance.

Even during several weeks in 2017 when the lake’s water was not usable by the city due to the lake’s algal bloom issues, the city was still obligated to pay its contractual amount. During this time, the city was forced to rely on other water sources.

Granted, it takes a lot of money and elbow grease to maintain a large man-made lake and dam, and the city understands it has a contractual responsibility to pay 12.87 percent of the operations and maintenance related to the dam and water storage.

But should the city have to pay 12.87 percent of hundreds of items, including the below approximate totals:

• $144 for “toilet paper holder double”

• $400 for “double post locking toilet paper holders”

• $300 for “bird seed”

• $660 for “brochure stands”

• $60 for “sheet protectors for slides”

• $1,500 for “travel orders”

• $1,200 to “paint Visitor Center breakroom kitchen and hallway steps”

• $1,500 for “repairs Visitor Center urinal wall”

• $150 for “calendars and forms”

• $152 for “replacement mascot transport”

• $2,900 for “toner and office supplies”

• $2,200 to “deep clean tile floors”

• $1,200 for “med serv physicals CCL”

• $14,000 for “project office building staining”

• $1,500 for “uniform purchases”

• $1,800 for “security camera installation at the Visitor Center”

• $10,000 for “zero turn mower”

• $2,100 for “pm start-up of furnace at Proj Office”

• $2,400 for “springtime start-up on HVAC/AC units”

• $47 for “touch-up paint for Visitor Center hallway”

• $800 for “carpet cleaning”

• $2,100 for “office furniture”

• $2,500 for “removal of dead ash trees”

• $15,000 for “sealing concrete sidewalks Visitors Center/area office complex”

• $22,000 to “replace siding on pole barn”

• $799 for “table carts large”

• $495 for “desk adaptor”

• $900 to “remove oak tree at Visitor Center”

And for “in-house labor”:

• $1.07 million, for well over 100 job title line items, most of which are billed at a rate of between $50 and $100 — per hour.

• Titles range from geologist ($99/hour), biologist $118/hour), civil engineer ($113/hour), archaeologist ($105/hour) and procurement analyst ($94/hour) to realty specialist ($101/hour), regional economist ($99/hour), management analyst ($52/hour), maintenance worker ($46/hour), laborer ($34.37/hour) and student trainee ($32.13/hour).

Those are just a few of the entries on the itemized list “Caesar Creek Joint Costs Detailed Breakdown July 2015-June 2016.”

After failed attempts to obtain an itemized bill from the Army Corp of Engineers for the Operations and Maintenance costs at Caesar Creek Lake, Wilmington Director of Public Service/Public Safety Brian Shidaker contacted United States senators and representatives to try to get some answers. U.S. Rep. Steve Stivers (Ohio-15th District) got the city the information it was looking for — the aforementioned line-item report.

In April 2017 the city received a bill from ODNR for reimbursement of operations and maintenance charges at Caesar Creek Lake in the amount of $289,467.23. The bill, like previous ones, had no explanation of charges, according to Shidaker.

The reimbursement is required through a contract known as the Corps Contract, in which the city shall reimburse the ODNR for operation and maintenance costs charged.

According to a spreadsheet detailing the Wilmington Water Department’s purchase history from ODNR dating back to 2004, the city never paid more than $200,000 for operating and maintenance. Before 2017, the highest operations and maintenance bill was $187,192.97 in 2006.

“This problem has been escalating over the past several years,” Shidaker told the News Journal.

Shidaker became the city’s Safety/Service Director in 2016.

He stated there are two issues with what’s going on:

• First, how much water is purchased versus how much water is actually used.

“We purchase 7 million gallons a day, but use approximately 2 million. It’s just part of the agreement,” he said.

At the time of the original agreement, the city had expected to use closer to 7 million gallons daily — DHL was in full flight in Wilmington, employing thousands of workers at the air park before its 2008 pullout;, and the city had expected to be selling water to other cities and towns as part of a regional water district, but that never materialized.

• Second, the city also covers a percentage of the operation and maintenance at Caesar Creek Lake. The U.S. Army Corps of Engineers sends a bill to the state, and the state then sends the city a bill for this amount. In 2017, the bill was $289,467.23; the previous year’s bill was $103,391.77. In 2018, the City received a bill for $294,419.25 for the annual operation and maintenance, plus an additional $187,150.07 for “underpayment” during the period of 2007- 2018, for a grand total due of $481,569.32.

There was no explanation for the increase in 2017 and again in 2018, according to Shidaker.

The lack of detail, plus the large increase, motivated an investigation. At the May 18, 2017 city council meeting during the Water Committee report, Committee Chairperson Kelsey Swindler presented an ordinance concerning this bill, moving a sum of $140,000 from the Water Fund to ODNR payments.

“The U.S. Army Corps of Engineers isn’t responding to the city’s requests for detailed information on the operation and maintenance costs,” Shidaker said.

“We don’t even know what we’re paying for,” Shidaker told the News Journal in 2017 after the April bill had arrived. “So we reached out to the state. They basically said we just received the bill from the Army Corps of Engineers and we pay it per the agreement. They don’t care because they’re getting reimbursed 100 percent by us.”

The News Journal emailed the Army Corps of Engineers on Monday seeking comment, but to date, there has been no response.

Recently, Shidaker and Water Superintendent Rick Schaffer reached out to officials with the U.S. Government Accountability Office (GAO). They spoke to the director and assistant director at the Natural Resources and Environment (NRE) about their investigation in an hour-long phone conference.

“I felt that it was a really good conversation,” Shidaker said.

He said he made a public records request for similar reports of detailed operation and maintenance costs made by the Corps to the city dating back to 2008. The city is also working on a Freedom of Information request to get the list of municipalities the GAO interviewed who had similar issues with the United States Army Corps of Engineers.

“The impression I got was that there were a lot of municipalities that are in a similar situation where they’re getting billed by the Corps with little or no detail at all,” he said.“We want to see if they’re having the same issues we are. That’s important because there may be far-reaching implications. This could be much bigger than Wilmington.”

Another issue they want to look into is a follow-up on the 2017 GAO report.

“We indicated with them that our experience was different than what was outlined in the report. The report states there were issues between the Corps and water users, but in the report it says when the Corps recognizes an issue they resolve it. That isn’t the case with us,” he said.

According to Shidaker, what needs to happen in order to trigger the follow-up report by the GAO is the right question needs to come from the right person to the right person at the GAO and be asked the right way. In this case, the right person asking the question would be United States Representative Bill Shuster (R-Pennsylvania), the chairperson of the House Transportation and Infrastructure Committee.

Shidaker told the News Journal that the city has been consulting with a prominent class-action attorney from a Columbus-based law firm, about what the next steps would be moving forward.

Caesar Creek Lake dam.
Caesar Creek Lake dam. John Hamilton | News Journal

The U.S. Army Corps of Engineers is the agency that bills the City of Wilmington for a portion of the operation and maintenance at Caesar Creek Lake. U.S. Army Corps of Engineers is the agency that bills the City of Wilmington for a portion of the operation and maintenance at Caesar Creek Lake. John Hamilton | News Journal
U.S. Army Corps of Engineers hasn’t explained increase, says Shidaker

By John Hamilton

and Tom Barr

The News Journal