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Sewer System Could Fund Scholarships for Akron Students

If Akron Mayor Don Plusquellic‘s plan becomes reality, local high school graduates will have the opportunity to attend the University of Akron - with a little help from the city.

Akron is considering leasing its sewer system in order to finance a scholarship fund that will help pay tuition and fees for students to attend the university or trade schools in the city.

"The mayor is passionate about education,” says Rick Merolla, Director of Public Service. “It is his belief that all students should have the opportunity to attend college.”

The money raised through this program would fund a “last-dollar” scholarship program, aimed at students with a gap in their funding - in other words, those who are unable to meet the costs of attending college after applying all other sources such as scholarships, financial aid, and family resources.

And the sewer system appears to be the right asset to generate the monies needed to establish this fund.

For starters, the lease or sale of the sewer system would most be transparent to most residents. As Rick Merolla points out, “Once waste leaves your house, you don’t really care who takes care of it .....” Leasing the sewer system would have no functional impact on its operations.

Plus, it’s a valuable asset. According to Mark Williamson, the City’s Director of Communications, Akron has one of the best sewer systems in the country. “The system was built to handle the needs of the burgeoning manufacturing industry of the early 20th century,"

The possible lease of a wastewater system has generated a lot of attention; whereas there have been numerous transactions involving water supply systems across the country, such has not been the case for wastewater systems.

Whether to lease or sell the system depends on the level of interest - and offers - the deal generates. While leasing could potentially allow the City to maintain more control of the system, there is an inverse relationship between the amount of control that the City maintains and the value of the asset. The more control it relinquishes, the more the value increases, as Merolla explains.

Groups opposing the lease of the sewer system fear higher utility rates. However, Mayor Plusquellic wants a ratepayer protection plan to be part of the transaction, says Merolla.

At this point, the City is in the process of hiring technical team - engineering, legal, and finance - to help explore its options. The initial stages of due diligence, which will be a very important part of the decision-making process, are underway, and an advisory committee will be formed soon.

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“Kalamazoo Promise” Encourages Attendance at State Colleges

The Kalamazoo Promise, launched in 2005, is an example of another city-led plan to encourage local graduates to further their education beyond high school. The scholarship is funded entirely by anonymous donors.

Students who graduate from the Kalamazoo Public School District, and have lived in the district for four or more consecutive years, are eligible for full college scholarships to a State of Michigan university or community college program. Eligibility requirements include maintaining a 2.0 grade point average throughout their college coursework, with a minimum of 12 credits per semester.

According to the Upjohn Institute, a non-profit research organization that focuses on employment and the economy, the Kalamazoo Promise is fueled by “an economic agenda that seeks to revitalize the city and the region through a substantial investment in public education."

"If the return on investment in human and economic terms is high enough, the Kalamazoo Promise could serve as a new model for community revitalization and change the way policymakers think about K-16 education."

An Upjohn Institute release entitled Promise at a Glance reports that, in 2006:

  • 502 students graduated from Kalamazoo Public Schools
  • 410 student were eligible for the Kalamazoo Promise program
  • 363 students applied for the scholarships
  • 341 students are using the scholarship funds to attend a university or community college program

“Due to many students opting for Kalamazoo Valley Community College and Western Michigan University, 60% of the $2 million in scholarships this year stays directly in the Greater Kalamazoo community,” according to the report.

Bob Jorth, Executive Administrator of the Kalamazoo Promise says that enrollment in Kalamazoo Public Schools has increase by 12% since the program was announced - a particularly impressive statistic for a district that had been losing students for the past 17-18 years. Families moved into the area from over 90 different communities within Michigan, and from more than 30 states.

Because the program is so new, it’s a little more difficult to pinpoint changes in graduation rates, particularly in light of the variation in class size. But according to Bob Jorth, one readily available statistic shows a 10% increase in the graduation rate for minority male students between the first and second years of the program.

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