The Cost of Standing Still: Part Three
This is the third post in a series this week on City of Galion utility issues and their broader implications. The first two posts can be read here and here.
Unfortunately, Galion isn’t really standing still. It isn’t moving forward either, and as neighboring cities surge ahead with major initiatives, the city’s looming utility debt makes population and business growth an immediate necessity.
As we have shared, Galion has committed itself to a substantial investment in its water and sewer systems. It has also committed its residents and businesses to paying for that investment over many years. The first part of this series examined how City Council authorized up to $3.743 million in financing for the work, while the second explained that water and sewer customers will end up providing the primary source of repayment, with other city revenues and taxing authority serving as a financial backstop.
Even More Potential Expenses
It is important to place those recently authorized projects in a much larger context. In August 2024, GPD Group completed a condition assessment commissioned by the City after inspecting the wastewater treatment plant. It estimated the design and construction cost of recommended work to maintain and rehabilitate the existing plant at approximately $41.63 million. For scale, that is more than eleven times the combined maximum amount of the three BANs Council authorized in April, although the two figures cover different sets of work. The $41.63 million is not a bill presently due or an adopted capital plan. It includes a 30 percent estimating contingency, allowances for electrical, heating and ventilation work, design fees, construction management and inspection, and technical project representation. The estimated base construction items totaled $24.126 million.
The assessment did not include increasing the plant’s capacity. It also excluded a separate No Feasible Alternatives analysis and preliminary engineering required to address the plant’s two existing bypasses, as well as revisions to the municipal pretreatment program. Because the report dates from August 2024, it does not establish which recommended items may since have been repaired, funded or incorporated into current projects.
Those qualifications do not diminish in any way the report’s broader significance, however. The recent borrowing addresses specific projects within utility systems whose documented long-term rehabilitation needs are substantially greater.
All of this leads to the central question: How many people and businesses will share the cost? Once long-term bonds are issued, the annual debt payments will be relatively fixed. The number of customers supporting those payments will not be. That makes economic development more than a matter of civic ambition. It is now part of Galion’s infrastructure policy.
The size of the burden depends on the size of the base
Approximately $3.15 million of the authorized financing is connected with the water system, while another $593,000 involves sewer improvements. Galion must repay that debt whether the city gains customers, loses them or remains roughly where it is today.
That does not mean every new customer eliminates the need for a future rate adjustment. New development can also require additional services and infrastructure. But growth can distribute fixed costs more broadly and generate additional income tax, property tax and utility revenue. Decline produces the opposite result. Fewer customers remain to support systems that still must be operated, maintained and improved.
Galion is not growing
Population and utility accounts are not the same thing, but population provides one indication of the direction in which the customer base may be moving. Galion had 10,512 residents in the 2010 Census and 10,453 in 2020. The U.S. Census Bureau’s latest estimate places the city’s 2025 population at 10,370, a decline of 0.7 percent from the 2020 estimate base. Those numbers do not describe a sudden population collapse. They describe something more persistent: a city that has not been adding residents. Under other circumstances, a relatively stable population might be viewed as holding its own. It looks different when the city is preparing to assume a new long-term financial obligation. Standing still does not protect existing customers from a larger burden. It simply means there are no additional customers helping to carry it.
The lack of growth is perhaps more evident in the business sector. In the last year alone, Galion has lost Lifetouch and Donley Ford, and East Street is looking increasingly forlorn. Restaurants have closed. There are one or two brighter spots, but they remain the exception rather than the rule. As noted in a previous article, Council also risked making it more difficult for Uptowne business and property owners, and the City itself, to access the kinds of outside money that Mansfield, Shelby, Loudonville and hundreds of communities across Ohio, and the businesses and property owners in them, are currently realizing.
In a nutshell, Galion’s obligations are expanding while its economic and residential base is not. Part Four will examine whether the present economic-development structure is producing the pipeline, properties, and leadership needed to change that direction. Finally, in an epilogue coming this weekend, we will look at scores of exciting, creative projects being undertaken across Ohio to position cities like Galion for the future.
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