Tim Williams
Executive Director, Ohio Manufactured Homes Association
Senate Energy and Natural Resources Committee
testimony re: SB 333- as introduced
November 29, 2016
Chairman Balderson, Vice Chair Jones, Ranking Member Gentile and members of the committee, I am Tim Williams, Executive Director of the Ohio Manufactured Homes Association. Since 1947 the Ohio Manufactured Homes Association (OMHA) has represented all segments of the factory built homes industry including manufactured homes communities (mhc) that provide affordable housing for 750,000 Ohioans.
I am testifying regarding certain troubling aspects of Senate Bill 333. This legislation is a second attempt this session to make substantial changes involving the nearly 1,300 submetered and stand-alone water systems in manufactured home parks.
Some related language in SB 333 was also previously in the budget bill last year (HB 64). At that time both the House and the Senate removed the language. Today, we seek compromise for certain aspects in SB 333.
We want safe water to be protected in the 1,300 manufactured home parks water systems without any unnecessary regulatory mandates.
OMHA has been in ongoing communication with EPA presenting our concerns. We are hopeful our reasonable concerns can be addressed in the upcoming substitute legislation.
Before I proceed further I feel compelled to emphatically state the obvious in response to some of the previous witnesses subtly implied but unfortunate narratives…and that is OMHA has always been and is proactive in advocating total compliance and safeguarding our homeowners and residents water supply. In fact, OMHA’s attorney assists our members as well as we provide training sessions in which EPA has participated to ensure such compliance.
For the purposes of this testimony I encourage you to look at the language involving manufactured home parks as a three-legged stool: financial assurance, receivership and asset management programs. While we have made progress to reach a compromise with Ohio EPA, the following concerns remain.
financial assurance: The bill before you calls for a more flexible and reasonable standard of financial assurance for new and modified systems with a 15% ‘escrow” set aside from the current $50,000 maximum to $100,000. This is reasonable.
receivership: Senate Bill 333 as introduced removes two steps of the current receivership process that all individuals and businesses in Ohio must follow under orc 2735. The EPA proposes to remove a compliance step and a remediation step for a non-compliant system in an attempt to pursue receivership more quickly.
However, what the EPA did not disclose to the committee in its previous testimony is EPA’s attempt to deny due process for the owner of the manufactured home park in those extremely rare instances of receivership proceedings.
As introduced, the director would be granted a vast expansion of power to maintain lists of receivers, provide that list with a priority to the court and be able to deny the owner of the system with the opportunity to consent to the entity named as the receiver. This provision in SB 333 is contrary to existing general receivership law in ORC 2735 and with House Bill 9 passed by the 130th General Assembly, granting all parties the opportunity to consent to the person named as receiver.
Denial of the owner’s joint consent would allow the EPA to be the only body in the state to deny a property owner due process in naming the entity that will essentially take over its property. In a written statement by EPA to OMHA on this issue they said in part, and I quote:
“our primary concern with your (OMHA) added language in section 6109.25 (e)(1) was that it required consent of all the parties involved in the action. requiring consent from all the parties could cause unnecessary delay in the process of appointing a receiver.”
Mr. Chairman and members of the committee, denial of any person’s due process should never be substituted for state agency expediency. The EPA shared that it has only pursued 2 receiverships in the last two years, so I am at a loss to explain their need to skip helpful compliance and remediation steps consistent with existing law.
asset management programs: This section of Senate Bill 333 was not in last year’s budget bill (HB 64) and is a new unfunded mandate on business operators in this state. Current law requires an asset management planto be created when a new system has been installed, constructed or substantially modified since 1999.
The Ohio EPA is now seeking an expansion of the concept of “asset management plans” even though by their own estimates only 6 of the 1,300 existing water systems have failed in four years. instead Ohio EPA now wants to require actual “implementation ofasset management programs”for totally compliant existing small water systems which will require significant resources, including the hiring of technical advisors like engineers, accountants, etc.
It is critical to understand there is a difference between the word “plan”and “program”as used in the bill. Our member small parks have been in compliance with the current law and have been submitting “plans” when appropriate.
Even more revealing the U.S. EPA continually refers to asset management “plans”—not “programs” in their communications. However, Ohio EPA goes beyond the federal terminology by requiring “implementation of “programs”as opposed to “preparation of plans”for systems where no problem exists. The word “plan” was actually used by a water system provider last week in its testimony on the bill.
We can support having a “plan”on file as suggested in the U.S. EPA documents.
However, the SB 333 bill language of “program implementation” and the written EPA response to our concerns indicates they know to use the word “program implementation” leads to much more extensive costs and time for a problem that doesn’t exist and clearly goes beyond even the federal EPA’s requirements. Ohio EPA stated in their communication to OMHA—and I quote:
“(a) “plan” can be a program but a program may be more than a plan for larger public water systems. an asset management program is a structured planning method for public water systems to complete a strategic evaluation of their system that demonstrates ongoing technical, financial, and managerial expertise.”
Let’s imagine you have been living in your home for ten years. a new law indicates you the homeowner must show technical, financial and managerial expertise to implement a capital improvement program for your home even though you have no problems.
You will be required to have expertise for example on HVAC systems, water heaters, concrete repair, roof and window replacements, etc. consequently you will have to divert a significant portion your income used to pay bills and other necessities to a fund for problems that do not exist or may never require attention.
So, I hope you can appreciate the parallel of my example and the conclusion that the 1,300 MH park water systems in Ohio with no compliance issues should be able to simply have a reasonable “plan” on file in the unlikely event that a water quality issue may need attention.
I can certainly appreciate Ohio EPA’s hypervigilance regarding water system quality given the failure to properly monitor water quality test results in Sebring, Ohio. No one should have to experience such threats to their water quality.
That’s why we have suggested to EPA language that any water system that is out of compliance on the effective date of the bill should have to immediately implement its asset management plan. This was not acceptable to the Ohio EPA, even though Ohio EPA confirmed such in writing to us…and again I quote from their written communication:
“for smaller public water systems, a “plan” would be adequate to satisfy the asset management program requirement.”
Mr. Chairman and members of the committee the Ohio EPA continues to present language drafts to us that are not consistent with our previous consensus. We feel the Ohio EPA is seeking to treat a small manufactured home park water system like a major municipal water system such as Sebring. The result is placing unreasonable financial burdens on small park owners for a problem that does not exist.
More importantly, Ohio EPA receives water quality test results from EPA certified water testing operators for all 1,300 park systems on a monthly basis. Surely, assuming EPA is faithfully reviewing all 1,300 monthly test results, they have a timely and accurate method that should immediately identify any water quality issues well in advance.
We urge the committee to support our homeowners, residents and small business owners in an effort to protect our water supplies with reasonable regulation that doesn’t have the potentially unintended and disparate impact of displacing some of our lower income, senior and Hispanic residents that rely on manufactured homeownership for affordable housing.
Mr. Chairman and members of the committee, we are hopeful that these reasonable and legitimate concerns can be addressed by EPA in the spirit of compromise that we have demonstrated in good faith throughout this process. If these concerns are addressed by Ohio EPA, OMHA is prepared to remove our opposition.
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