Mayfield Heights approves Cleveland Water restated service agreement as council seeks funding for aging mains

Mayfield Heights officials voted Aug. 4 to let the city's mayor execute three agreements with the City of Cleveland that would transfer ownership of local distribution water mains to Cleveland Water and make the community eligible for the utility's suburban water main renewal program. The measure, carried by roll call, authorizes an asset-transfer agreement, a municipal utility district (economic development) agreement and a restated water service agreement with Cleveland Water. The documents put Mayfield Heights into a 20-year minimum term with automatic annual renewal unless the city gives five years' notice to revert to the previous agreement. The change will make Mayfield Heights eligible for Cleveland's twice-yearly project-selection process, which reimburses municipalities for design and construction of selected water-main replacements. Cleveland Water commissioner Alex Margavicious told council the utility has reinvested about $243 million across nearly 500 suburban projects to date and that the program is intended to accelerate replacement of high-failure, low-fire-flow or otherwise problematic mains. Margavicious said the restated agreement leaves repair responsibilities unchanged (Cleveland Water will continue to repair breaks whether or not a community signs) but requires ownership transfer for Cleveland to undertake larger capital replacements. He described five primary contract elements: the restated water service agreement, a companion economic-development (municipal utility district) agreement, an asset-transfer agreement, the suburban-main replacement program itself, and a reimbursement agreement. Council and staff questioned program details and trade-offs. Councilmembers pressed on (1) the scoring criteria Cleveland uses to select projects — weighted toward main-break history and recent accelerations in break rates and also including fire-flow shortfalls, recurring water-quality problems, pavement coordination, transmission benefits and lead-service-line removal; (2) whether communities can appeal a low score (Margavicious said no formal appeal exists, except for emergency cases that meet an urgent-break threshold); (3) project timing (applications are scored twice a year and Cleveland typically announces funded projects in early September for the fall cycle and in February for the spring cycle); and (4) per-semester caps (Cleveland's maximum award per semester is 10,000 feet of pipe). City engineer Nick Feeney told council Mayfield Heights had submitted two project applications to Cleveland Water: a Marnell Street application for $815,001.15 (design, construction and construction administration for the water line) and a Washington Street application for $1,000,004.62 (design, construction and administration). Feeney said the Washington application is larger and that both were submitted ahead of Cleveland's fall scoring cycle. Margavicious described how the economic-development provisions work: the agreement limits income-tax abatements between the city and Cleveland (income-tax abatements are prohibited under the restated agreement) and limits real-estate tax abatements to no more than 75% and no longer than 10 years. He said that if a company moves from one party jurisdiction to another party jurisdiction, the gaining community must remit half of the new income taxes to the losing community for five years; starting in year six the gaining community retains 100%. Councilmembers and staff raised concerns that the payroll threshold Cleveland uses to trigger tax-sharing (a business earning $500,000 a year in payroll) is too low and could disincentivize Mayfield Heights from using local incentive tools. Economic-development staff described that a relocation of a large payroll could materially reduce city revenues during the initial years of an incentive. Margavicious acknowledged the payroll threshold was negotiated with suburban law directors in the program's early years and said any change would require regional coordination. Margavicious said the program is ratepayer-funded: Cleveland Water is an enterprise fund and its legal minimum commitment to the suburban program is $10 million per year; he said the utility has voluntarily increased that to about $16 million this year and planned $17 million next year, and that the amount could rise further if suburban participants and Cleveland agree. Council members voiced a range of views. Some said the program offers an opportunity to secure millions in capital funding for urgent replacements of century-old mains — the city has about 49 miles of distribution pipe and roughly 21–22 miles dating to the 1920s and earlier — and that failing mains have public-safety and service consequences. Others said the economic-development restrictions and the $500,000 payroll test could limit the city's ability to attract or incentivize businesses. On the record action, council approved Resolution 2025-40 authorizing the mayor to execute the asset-transfer agreement, the municipal utility district agreement and the restated water service agreement. Councilmembers voting in favor included (roll-call as read at the meeting) Mister Medic (yes), Mister Miner (yes), Missus Cebeda (yes), Miss Talvin (yes), Mister Balestreya (yes), Mister Manno ("against my better judgment, yes"), and Missus Snyder (yes). The resolution passed. Next steps cited in the meeting: Mayfield Heights can submit project nominations in time for Cleveland Water's fall scoring; if a nominated project scores high enough and the agreements are fully executed, Cleveland will reimburse design and construction costs per the reimbursement agreement. If Mayfield Heights later reverts to the prior agreement, Cleveland explained the city would owe a prorated share of the utility's earlier capital reinvestment in any mains that transfer back. Speakers quoted in this article spoke during the Aug. 4 Committee of the Whole meeting and the subsequent special council session on the same evening. Council and staff said they will continue to weigh the immediate infrastructure funding opportunities against the longer-term economic-development trade-offs before finalizing municipal nomination and execution timing.