VINTON & JACKSON COUNTY WATER COMPANY
INCREASING TRANSFER OF RESPONSIBILITY

A Water System Partnerships Case Study



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Creating the Vinton and Jackson County Water
Company Partnership

Background

Two water systems in rural Southeastern Ohio, Vinton County Water Company
(Vinton County) and Jackson County Water Company (Jackson County), developed a
strong relationship rooted in support and respect over almost two decades. The
water systems were similar, as they shared some common service area boundaries.
Both were not-for-profit water systems with lower than average median household
income for Ohio. However, there were some differences. Jackson County was
significantly larger with 800 miles of water mains and 6,000 connections and served
a much denser population. In contrast, Vinton County purchased treated water and
had roughly 42 miles of water mains and 600 connections.

Vinton County struggled with increasing operations and maintenance costs, staff
turnover, poor recordkeeping, and low revenue streams. After their operator quit,

HIGHLIGHTS

Challenge Statement:

Vinton County, a small rural water
system, faced various challenges
which impacted the system's
ability to provide safe and
affordable drinking water to its
customers. Vinton County was
concerned with their source water
quality, low revenue streams, and
inability to maintain a certified
operator.

Partnership Features:

Jackson County formed an
informal partnership with Vinton
County, often lending a helping
hand to the Vinton County system.
When Vinton County's operator
quit, Jackson County provided an
operator through a contractual
agreement. Eventually the Vinton
County Water Company was sold
to Jackson County.

Primary Benefits:
in addition to the improved water
quality for Vinton County
customers, both systems and their
customers benefitted from greater
economies of scale. Transparency
at an early stage supported a
strong relationship between the
systems.

Accomplishments:

This partnership produced safe
affordable water, more reliable
service, and increased
sustainability and resilience of the
water systems.

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A Water System Partnerships Case Study

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Vinton County hired Jackson County to perform operational duties and started to
discuss the idea of selling the system to Jackson County.

Critical Drivers

The critical drivers for Vinton County to engage in a partnership were:

4 Revenue streams too low to cover operating cost.

4 High staff turnover and lack of knowledge retention.

4 Faulty hardware systems.

4 Concerns about complying with the Disinfectant and Disinfection Byproduct
Rule (DBPR).

4 Need for a new water source due to contamination.

The critical drivers for Jackson County to engage in a partnership were:

4	Increase in revenue from expanded customer base.

4	Pre-existing knowledge of Vinton's assets and challenges.

4	Increase in customer buy-in due to new infrastructure needs.

4	Benefits from economies of scale.

4	Early collaboration and provision of service as a good neighbor.

Water system
partnerships
encompass a range of
o pporl unit los for water
systems to work together
In order to sustainably
provide water services.

Increasing Transfer of Responsibility

Creation of a new entity
by several water
systems that continue
to exist as

independent entities.
Work with other water

system's control.

Water System Partnerships as a Solution

Water systems across the country face a myriad of challenges, including technical,
managerial, and financial capacity issues. Water system partnerships refer to a
range of collaborative activities in which systems can pool resources, expertise, and
experience. Bringing systems together through partnerships can help reduce
noncompliance issues, risks to public health, and redundant workloads. Water
system partnerships are informal or formal relationships that help water systems
identify opportunities to leverage benefits that would be difficult to achieve
independently.

TYPES OF PARTNERSHIPS

informal Cooperation:
Coordination with other water
systems, but without contractual
obligations. Informal partnerships
may consist of partners sharing
equipment and creating mutual aid
agreements for emergency
response management.

Contractual Assistance:

Setup a contract with another
water system or service provider
where the contract and service
ultimately remain under the water
system's control. This type of
partnership may include a system
purchasing water from another
system or contracting out
operations and management to
another water system.

Joint Power Agency:

Creation of a new entity designed
to serve the systems that form it.
These partnered water systems
may share system management,
operators, or source water.

Ownership Transfer:

Merger or mutual transfer of an
existing entity or creation of a new
entity. This type of relationship
may be represented by one system
being acquired by another, or by
being connected to another system
physically, financially, and
managerially.

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The ultimate consolidation of Vinton County Water Company into Jackson County
Water Company is an example of ownership transfer. For years prior to the transfer
of ownership, the water systems engaged in informal partnerships with Jackson
County providing support to Vinton County, such as lending office equipment. The
relationship evolved to contractual assistance when Jackson County helped Vinton
County meet the need for a new operator after their operator left. When it was
determined that Vinton County did not have adequate technical, managerial, and
financial capacity to operate the system independently, the formal transfer of
ownership was initiated.

Building Blocks of Partnership

Jackson County gives Vinton County

new office materials and	Funding is secured. Project

partnership begins. Vinton County	Vinton County's	design is completed. Vinton

starts selling water.	Operator quits.	County agrees to sell to

Jackson County.

Jackson County	Vinton County is fined for	Vinton County hires

starts selling	non-compliance with DBPR.	Jackson County to fulfill

water.	operator duties.

4 Jackson County and Vinton County started partnering almost as soon as Vinton
County came on-line in 1992. Jackson County provided Vinton County used office
equipment to help them get started, which laid the groundwork for future
partnerships.

4 In 2005 Ohio EPA issued a Findings & Orders enforcement action against Vinton
County for non-compliance with the Disinfection By-products Rule (DBPR)
resulting in a $6,000 fine. Vinton County was required to hire a certified operator
and to conduct all required monitoring routinely.

4 Vinton County's operator quit in 2007 leaving the system without a certified
operator. Unable to find a part-time operator in the area, Jackson County shared
their operator with Vinton County. Eventually, in 2008, Vinton County contracted
with Jackson County to operate their system.

4 In 2009, the water systems were already in discussion about acquisition but had
determined that connecting Jackson County and Vinton County would require a
significant capital cost. The American Recovery and Reinvestment Act (ARRA)
presented an opportunity for Ohio EPA to provide funding that made connection
much more cost effective with 80 percent loan principal forgiveness. The total
project cost was $1,388,203.

4 By the end of 2009, Vinton County Water Company made the decision to sell to
Jackson County Water Company.

ADHERING TO
MEMBER BY-LAWS

Vinton County's member by-laws
required that a certain number of
customers vote to approve the
sale of the system. The vote was
held three times before the
motion to sell the system passed.
The customers were initially
skeptical of transferring the
ownership of the system.
Customers agreed to sell the
system only after a rate study,
conducted by Rural Community
Assistance Partnership (RCAP),
showed that the partnership would
help keep rates reasonable and
expand customer bases for both
systems.

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Best Practices and Successful Strategies

The Vinton County and Jackson County partnership was cultivated and developed over
almost two decades. Taking steps toward working together helped both water
systems promote transparency and trust between the systems and communities. The
partnership approach hinged on communicating across the water systems and
communities that it was in everyone's best interest to evaluate the financial and
operational impacts of action and inaction. Jackson County was more willing to
provide significant assistance and to ultimately purchase Vinton County Water
Company because they were able to take smaller steps to understand the business,
operations, assets, and challenges before taking over responsibility for Vinton County
and its customers. Taking on management and maintenance duties on a trial basis
helped build familiarity and reduced feelings of separate ownership that can create an
"us versus them" mentality.

Dispelling misinformation also helped the water systems and their customers see the
partnership as a positive solution for both communities. For example, during
partnership development, a truck was sold from Vinton County to Jackson County in
lieu of back payments. This transaction created a lot of tension between the water
systems as there were differing opinions about the fairness of the sale. This one
instance of mistrust almost ended the entire partnership and a long history of
assistance.

Jackson County found it was important to evaluate the objective benefits of the
partnership, thoroughly review the financial and operational impacts, and keep
customers, regulatory, and financial agencies informed throughout the process.

Likewise, Vinton County suggested that utilities focus on staying on top of their
financial statements, keeping good records, asking for help proactively, and coming up
with a plan for the staff and support structure of the merging systems. Both water
systems found that keeping good neighborly relations were important because there
is always uncertainty regarding what might happen in the future, and who will be able
to provide help.

Partnership Benefits

By partnering over time, and gradually increasing transfer of responsibility, Jackson
County and Vinton County were able to build trust and understanding between the
systems. Connecting the water systems provided benefits to the systems' customers
and communities.

A Customers received reliable service and safe affordable drinking water.

A Water system compliance increased in the state.

A Local buy-in and stakeholder relations increased.

A Jackson County was also able to build an emergency connection to the Village of
Hamden using the new line to Vinton County.

A



Vinton County Water
Company

1

, JACKSON COUNTY
WATER COMPANY
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INVOLVING IMPARTIAL
PERSPECTIVES

To neutrally evaluate water rates,
Vinton County brought in a third
party facilitator (RCAP) to conduct a
rate study. This study included
looking at options for expanding
the system vs. selling the system vs.
the "no change alternative." In the
end, the board agreed that the goal
of the water system was to provide
safe water at a reasonable cost.

The involvement of RCAP also
helped Vinton County provide rate
study information to their
customers through a media
campaign which helped address
underlying concerns of fairness.

US Department of Agriculture
(USDA) also played a role in
bringing the utilities together,
organizing several meetings to
discuss merging the two water
systems, and helping to conduct
negotiations.

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Learning from the Vinton and Jackson County
Partnership

Maintaining transparency and communication throughout the partnership process
helped Vinton County and Jackson County build upon their existing relationship to
ultimately transfer ownership to Jackson County.

Clear Communication

It is important to ensure that all alternatives are thoroughly explored before a solution
is agreed upon, and that the outcome of analyses are properly communicated to
management, customers, and the community at large. There are opportunities for
information to be misinterpreted so engaging a third party to express impartial
opinions can make a significant difference in how analyses are interpreted. This may
be in the form of a technical assistance group performing a rate study to determine if
partnership is the most viable option, having a third party evaluate the consolidating
system to determine a fair and equitable price, impartially facilitating discussions and
public meetings, or in a number of other roles.

Collaboration

Partnerships should be viewed as a tool to help all involved systems identify and move
forward with win-win solutions. Often a collaborative approach to developing and
implementing solutions is needed. Educating decision-makers and bringing together
stakeholders that are willing to discuss and resolve their problems openly is a key step
in the process. Maintaining transparency, mutual respect, and patience throughout
the process, no matter the length, is vital.

INTERESTED IN LEARNING MORE ABOUT WATER SYSTEM PARTNERSHIPS?

Water system partnerships can help systems overcome challenges including aging
infrastructure, compliance challenges, and limited technical and managerial
capabilities. Partnerships provide opportunities to collaborate on compliance
solutions, and operations and maintenance activities, which increase capacity and
enable systems to provide safe water to their communities.

To learn more about water system partnerships like Vinton County Water Company
and Jackson County Water Company, visit EPA's Water System Partnerships
website: https://www.epa.gov/dwcapacity/water-system-partnerships.

RESOURCES

To learn more about the
partnership between Vinton
County Water Company and
Jackson County Water Company
and gather information about
other water system partnerships,
follow these links to online
resources:

EPA Water System
Partnerships Website

EPA 2012 Webinar on Vinton
County Water Company and
Jackson County Water
Company

Jackson County Water
Company Website

Office of Water (4606M)

EPA 816F21008

January 2022

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