let's go ahead and get the meeting underway if we can first item on the agenda is whether there's any public comment for issues that are on the agenda does anyone wish to address the council on any matter that's on the agenda seeing none we'll move along I'm advised by the council clerk's office that the docket is in the process of being finalized and prepared so unless there's an objection let's just skip over the docket approval until we have that in hand which ought to be as we speak so we'll come back to it here shortly the summary of the December 11th meeting has previously been circulated is there a motion to approve the summary have a motion and second any discussion seeing none let's proceed to vote those in favor of approving the summary let it be known by saying aye those no motion carries unanimously now down to budget amendments there's a fairly short list in the packet I move approval Thank You dr. Stephens is there a second have a second council member Ellinger any discussion seeing none those in favor please vote aye opposed no motion carries unanimously that brings us down to items of new business is there a motion have a motion and second approve the items of new business any discussion see none let's proceed to vote those in favor of approving the items of new business let it be known by saying aye those no motion carries unanimously and that takes us down now to presentations and mr. Potts from score podium is yours nationally last year we conducted over 300,000 sessions and all 50 states and u.s. territories we followed up with on a second interview or more with about a hundred thousand or roughly a third of those initial interviews we have some 10,500 counselors volunteering and we estimate that we're that we have donated at least a million man-hours where the volunteer work and our efforts to help small business that's our founding which was in 1964 we've canceled and trained in seminars 7.8 million entrepreneurs we have 389 chapter offices Lexington is one of those and we do face-to-face mentoring as well as online as well as offer online advice the Lexington chapter has 23 volunteers of which about 12 are very highly active that is to say they they have regular hours where they meet with clients and so on and so forth our hours are from 9 to noon Monday through Friday however and importantly we will meet with clients at their place of business we will meet with them on the weekends I will meet with them in the evenings on and as appointment basis what we bring frankly is real-world knowledge and expertise we know what the best practices are and we can help entrepreneurs with those best practices we work closely with the SBDC Commerce Lexington and other organizations here and in the Lexington area to help people for example we conduct the seminar for writing business plans for the SBDC and importantly online counseling is becoming more and more important as people are becoming more familiar with how to use computers and so forth we get a lot of clients through online counseling in addition to the face-to-face meetings that we have with people we have a very user-friendly website which is maintained by our national headquarters it offers templates for business plans planning advice and all kinds of assistances for people who are wanting to go into business or for people who are in business small business our solutions and suggestions are practical that volunteers are made up of people like myself and like mr. Kelly here who are retired we have a little extra time we can give back to the community now most of our people are either retired executives or people who were in business for themselves so what we bring to the table is again that practical knowledge one of our resource partners is the SBA they provide part of the funding that helps us continue to do business in the past the city government city county government has provided some assistance with our rent paying approximately 60% of our rent that has now stopped and we'd like to have you consider ways to help us out as that goes forward I would be happy to answer any questions that you might have I have some leave-behinds if you're interested in such Jay McCord has done a lot of presentations for score at four meetings and knows more about the organization probably than even I do so if you have any questions I'd be happy to address those are there any questions for mr. Potts councilmember McCord thank you and thank you for what you do I mentioned before the break when you all were announced and coming in that I'm I'm the face of score in 2000 when when my circumstances changed dramatically for my business I stumbled in the doors of score because of a relationship that one of your members had with my grandfather and and I knew about score because mr. Sidney Gall talked a lot about you and it's probably your best PR guy out there and was friends with my grandfather and said you need to come by and from that conversation got connected with Mark Halleck and Mark really invested a lot of time in me and my business and had the opportunity to to utilize what your institutional knowledge to to really help feed my family and and provide for for my family and my business and so what you all do is immensely valuable and we talk a lot about institutional knowledge and losing institutional knowledge as people retire and so forth and and you all are an organization that traps institutional knowledge and basically harnesses it for anybody that needs it the problem is nobody knows what you do and and that's not just a local thing that's a national thing and we're all very busy and we run really really fast and so sometimes we don't slow down long enough to look at how we leverage our senior talent and so what what I would like to do is I would like to put forward the the idea to be explored mayor that that score relocate you all are in and up in a location that I don't think was very viable for your purposes over on Waller Avenue not a lot of younger people are going to come stumbling into to Waller Avenue over there and and I think that since you do work with with the Small Business Development Center and you work with Commerce Lexington and so forth and we certainly have tried to to put resources towards them to really focus on economic development and entrepreneurship is certainly a big big piece of that I think that we ought to have a discussion as to locating you with them so Anthony Wright who's our economic development director here locally inside government and you all in Commerce Lexington probably need to have a conversation about how we can make that their space available because you're very fluid it's not like you need hard offices and and take up a lot of space but I would encourage you along those lines to have that discussion because we started have started to resource them in a way that I think allows us the opportunity to really focus energy but I know councilmember James and I have had numerous conversations about folks in the first district and and providing opportunity for them to have venture capital and to get entrepreneurial experience and so forth and where do you get it and here's a prime example of something that's free that very few people know or have access to so I think that locating you in a place where people can find you and that you can tap into these other resources is key and secondarily I think that tapping into the University of Kentucky and into this younger population of entrepreneurs that is here in Lexington and letting them know what you all have to offer I think can take Lexington in a big direction and I'm just one example of how good things how good the things are that you do and I'm very appreciative to you all and certainly be willing to help. Well and I want to make it clear that we are very flexible about our location we have we've talked with Sherry Mac at SBDC about locating when they were at the library and then later on when they moved over to to Commerce Lexington we're quite willing to do that we're we're not hung up on our location at all. One thing that I don't know that I mentioned Jay hit on it but I'll just mention it one more time our services to our clients is totally free there is absolutely no charge whatsoever all of our volunteers unpaid no money transfer in fact our code of ethics prevents us from accepting money. And I think something else that you said but they may be lost on the audience or lost on council members is you all have certainly 20 some odd folks that are volunteers that are here locally for face-to-face but but SCORE National has the cyber chapter which means that you have access to to business minds all over the country all over the really if that had been all over the world right here in Lexington and that you guys really do a good job of connecting where where the need is and so I think that again we raising your exposure putting you in a place where you can thrive and not just survive I think with with what we were subsidizing you in the past I think we ought to look at using some of those resources and partnering with with Commerce Lexington just making up the difference and and let's let's really put our senior talent and institutional talent to work in this community. Thank you all again for what you do. Any other questions? Councilmember Gordon. Thank You Mayor. Thank you for being here. When this first came to us it came to us because of concern about the financial situation and so my first question is and when that came I had some conversations with Joe Kelly and conversation with Sam Delaney who brought it forward and so my first question is can you give us some of the financial picture because I know you receive funding from some different sources and we were giving a portion I believe for rent. Yes that's correct. Our primary expense frankly since there are no salaries involved our people are all volunteer with the exception of a 15 hour a week person who works in our office and is paid by the Small Business Administration directly. We all I do is sign her time card if you will and her money comes directly from SBA. The you folks were paying about 60% of our rent. Our rent is $1,100 a month and the we were receiving six hundred and sixty seven dollars and change but approximately sixty percent of that was coming from you folks. But that amounts to if I my math is right around $8,000 a year. So that's kind of the financial picture. We have some money which frankly we had planned on spending a good piece of that in advertising to try to attract new clients. Last year we served I think 255 individual clients and about half of those received a second visit some sort of a follow-on visit. In addition to that we served a number of clients and I do not have a number for that but it usually increases it by about a hundred or so that were online clients and that's growing every year. So you know financially frankly we need some kind of we need some help on our rent. The the SBA has been good to us. They've been able to supply us with with our computers and desks and things of that nature. So we really don't have any expenses other than our rent. And how many volunteers did you say you have? We have 23 on the books but however some of those about 10 or 11 of those are on an as-needed basis. So if they have a for example if we have we have a couple of lawyers and they come in to help and we don't give legal advice by the way but at least they point people in the right direction. But they'll come in on an as-needed basis. We have a couple of CPAs and again they come in on an as-needed basis. I want to make it clear that we don't write business plans for our clients. We tell them how to write a business plan and we will review that with them and help them wordsmith that so that it becomes more acceptable to the bank for a loan for example. We know what banks want in the way of client involvement in an enterprise and so we can help people tailor their plans for their business to meet their particular needs. Each individual is of course different and we try to address that. Do you have a rental contract? Yes we do and our landlord has been good enough to frankly let us stay where we are receiving the 40% rent that he receives from GSA and that is a temporary measure. He's willing to work with us but not forever. You folks were good enough to come up with some additional money for us last year to take care of him through the end of 2007. But as of today we are not paying him his full rent. He's only getting 40%. He gets that directly from GSA. And has your contract actually expired? Yes. Your rental contract? That's correct. Okay. So if your question really is can we move, the answer is yes we can move. I was trying to get a sense of your situation in general. I really, number one, I really really like the idea of retired folks giving back to the community through their expertise. It's a fabulous concept. The schools use it. I know that the schools have lots of seniors who come in and help out in the schools in various ways. I do think that the question of Commerce Lexington, and I appreciate Sheree being here, and Anthony Wright of course, has some intriguing possibilities because really you're both going to a similar place or hoping to get folks moving to a similar place in what they're doing and where they're going with small business. And we're willing to extend ourselves to that extent. I will tell you that Sheree and I discussed the possibility of us maybe developing an additional seminar for them that we would conduct. We do the How to Write a Business Plan seminar now a couple of times a year. But as needed we can expand that to do it more frequently. And the need that she expressed was in the need of human resources that we might be able to help her develop something that would serve her client base who needs some assistance with human resource issues. How much space do you currently have about? Well we have the equivalent of four offices. Ten by twelve type offices. They're not large offices. Our space requirements are not big. We probably could get by easily on five hundred square feet or so. I will just say a comment. You have an exceptional landlord who would allow you to stay without. He's a good guy. He's patient with us. Thank you very much. Thank you. Council Member Myers. All my questions have been answered, but I do look forward to you talking to the Commerce Lexington to see if maybe there's a fit over there. And maybe they'll take that for the reduced rent that you're paying that forty percent right now. We will we will be glad to talk with them. In fact I'll call her on before I leave the building. Thank you. Council Member Beard. Thank you Mayor. Would it be appropriate right now to ask the council to put this on the docket for Thursday night to go ahead and appropriate $4,000 for the rest of this year if needed. If something can be worked out with Commerce Lexington, that's a different story, but if you're if you're under the gun and you don't have the funds to pay for January, obviously February, March, and April are coming around too. I would so move that we do that and then maybe put them in line for becoming a partner agency of some sort in the future. Is there a second? Okay we have a motion and second. Let me try to make sure I understand. You're proposing a budget amendment that they be given $4,000. I guess the question I've got is where's the $4,000 coming from? Obviously I haven't been able to dig into that yet, but I'm sure it's somewhere that we can find it. Okay. I think in order to get it on the docket for Friday or for Thursday, we need to identify from where the $4,000 is coming. So that's the dilemma that I would have, and I guess in light of that is the motion and second in order, Mr. Parliamentarian? Well of course we could make it, but again without knowing what account is coming from, it probably will fail because we can't just take money out of the air of course. I mean and this was a specific account we already know it may be better off waiting until we find an account or a pot of money and then coming back to council Thursday or next Tuesday may be more appropriate. Councilmember Beard? That's fine with me. I just think we ought to support this, continue to support this. My office for the past four years, previous four years, the motion's withdrawn and there's a second withdrawn. All right. I don't have anyone else that has any questions. I might add, Mr. Mayor, that we're in process of making application for fiscal 08 funds through the normal process and hopefully the need for those would be obviated by whatever we can work out with Commerce Lexington. Thank you very much. Appreciate your comment. We skipped over the docket approval just a few moments ago. If there's no objection, let's return to that so we can go ahead and get that checked off our list of things to do today. I think a copy of the docket has been circulated and I call to your attention that there are five or six items. Six items, I think, under the ordinances receiving first reading where there are all subject to some hearing on matters from the Planning Commission. Is there any, Madam Clerk? I think it's appropriate for you to go through each zone change starting with number eight and requesting a motion to either put it on with or without a public hearing depending on if there's an attorney here. We'll do that. Let's begin with item eight. Is there a motion to either have a hearing or not? Councilmember Stephens, I have you on the board here. Do you wish to speak to this issue? No, sir. I'm standing by for number ten. Okay. All right. But I'll be happy to make the motion that item eight be placed on it. Is this in the second district? Okay. Councilmember Blues? We have a gentleman at the podium. I presume he's going to ask for a public hearing. All right. Yes, sir. Mr. Mayor, members of the Council, John Woodall on behalf of the petitioner. I would like to request a public hearing. David's also here. He was one of the objectors at the Planning Commission level and we have some scheduling conflicts with the set of meeting dates in February and I believe the objectors would also like a evening hearing so that they can give me a hard time, which is fine. Again. Mayor, in that case then I would move that we put this on the docket at a mutually convenient time with a public hearing. Normally the rule of thumb is if it is going to take longer than two hours, then you would set it as a special meeting. If it is not anticipated to take more than two hours, then normally you can schedule it at a regularly scheduled council meeting for the public hearing. I expect that it will take longer than two hours. The dates that we have available for special meetings are February 5th, the 12th, the 14th, and the 19th. And this one has to be heard by February 27th, so. And those are all on Tuesday and Thursday nights. So Council Member Blues, do you want to include one of those dates in your motion? Mr. Mayor, I might add that the 19th worked for the objectors as well as the applicant. Where is it? February 19th. That's a Tuesday? That's a Tuesday, yes sir. Do you want to go with that date, Council Member Blues? That's fine with me. All right, and we have a second from Council Member Blevins that item 8 be scheduled for a public hearing to be held on February 19th at 7, 6, 5, 6. I think 6 is the norm. All right, it's 6 o'clock. Any further discussion on that item? Then let's proceed to vote. Those in favor of conducting a public hearing on item 8 on February 19th at 6 p.m. let it be known by saying aye. Opposed, no. All right, let's do that. Let's vote electronically, please. Those in favor, please vote aye. Electronically, those opposed, vote no. Motion carries. Thank you very much. We're now ready for item number 9. Mayor, item number 9 I think is my district and I move to place that on the docket without a hearing. Second. I have a motion, second placed on the docket without a hearing. Item 9, any discussion? Those in favor, please vote aye. Opposed, vote no. Opposed, vote no. That motion carries unanimously. We're now down to number 10. Mr. Mayor, I move that this ordinance be placed on the docket without a public hearing. Without? Without a public hearing. I have a motion by Dr. Stevens, seconded by Councilmember Blevins, that item 10 be placed on the docket without a public hearing. Any discussion? Those in favor, please vote aye. Opposed, no. Motion carries unanimously. Item 11. Mayor, I, um, number 11 put on without a public hearing. Without a hearing? Without. I have a motion by Councilmember Ellinger, seconded by Councilmember Lane, that item 11 be placed on the ballot without a public hearing. Any discussion? Those in favor, please vote aye. Opposed, no. Motion carries. Number 12. Mayor, I move to place this on the docket without a public hearing. I have a motion by Councilmember James, seconded by Councilmember Lane, to place item 12 on the motion without, on the docket without a public hearing. Any discussion? Those in favor, please vote aye. Opposed, no. Motion carries. Last but not least is item 13. Mayor, I move to place item 13 on the docket without a public hearing. So moved. I have a motion by Councilmember Blues, seconded by Councilmember DeCant, to place item 13 on the docket without a public hearing. Any discussion? Those in favor, please vote aye. Those opposed, vote no. Motion carries unanimously. With those modifications, is there a motion? Mayor, I have a motion too I'd like to add to the docket. All right. Councilmember Ellinger. On behalf of the administration and Ms. Crosby, who's not here, I move to place on a docket resolution authorizing Director Mayer on behalf of the Urban County Government to execute a release of easement, releasing a sanitary sewer easement on property located at 3101 Richmond Road. So moved. I have a motion by Councilmember Ellinger and a second by Councilmember McCord. Is there any discussion? Then those in favor of adding that resolution to the docket, let it be known by saying aye. Opposed, no. Motion carries unanimously. Any further motions with regard to the docket? Motion to approve the docket as amended. I have a motion by Councilmember Ellinger and a second by Councilmember Myers to approve the docket as amended. Any discussion? Those in favor, please vote aye. Those opposed, vote no. Motion carries unanimously and we'll turn the floor over to Councilmember Blevins. Reinforcements. Mayor and fellow Councilmembers, thank you for allowing me the opportunity to present you this legislation. I'd like to start out with a little story. As many of you all know, I've worked for Ross Perot in the past and folks are always fond of hearing stories about Ross. And as you know, his commitment to his employees is legendary. You've heard about the escape from Iran in the famous movie. Well, I can attest to his personal dedication to his employees personally, as I've seen him do it several times. I happen to be familiar with one situation where he flew a man and his family to the Mayo Clinic to make sure he was okay at corporate expense. I happen to be familiar with another situation I want to share with you where a child had gotten, a child of an employee had gotten a systemic infection. And as those of you in the medical field know, a systemic infection is a very bad thing to have. A child's kidneys began to shut down as did his liver. It looked pretty bad and we thought we were going to lose the child. Mr. Perot called the employee and wanted to know exactly what the employee needed and was going to take care of it right then. Well, it turns out that the young man was okay at that point. He was on the road to recovery. What's interesting about this story is not Mr. Perot's involvement, but was what was the ultimate cause of the child's problem. Turns out the cause of the child's problem was that he was playing in the creek behind his house where there was raw sewage. Made him really sick. What's even more interesting about this child's case is it happened just a few miles from here. I find it very interesting and disturbing that raw sewage can kill a child. I'm here to say not on our watch. I am proud to serve on a council with an administration that's going to face down this issue finally. Today we take those first steps to do so. Many people have asked me why now? Why don't we wait for the consent decree from the EPA to occur? And I want to address that up front. It's easy to think of sanitary sewer overflows, SSO's in our normal terminology at the Sanitary Sewer Oversight Committee meetings. We've begun to start to think of those as just statistics, but the facts are every time we talk about an SSO or sanitary sewer overflow, that means raw sewage is dumped into our community somewhere and a kid is being in danger. So that's one reason. Another reason is we have known problems right now that we need to repair. We know exactly what they are. We need to go do them. So that's another reason I want to go ahead and get started. Third, everything I'm proposing today is directly in line with what the EPA is eventually going to force us to do. So it's smart for us to go ahead and get ahead of the game to avoid getting penalties later. And finally, I want to make sure that we all remember it's the right thing to do. It's time to fix this. All right, I want to go ahead and get into the financial model and go ahead and pass things out. What's you're about to get is a collection of background data that you all can use as you consider this proposal. On the top, you're going to find the financial model and then in the back, you'll find some supporting documentation with some statistics regarding what the fee is going to do to our residents. I'd like to start with an overview of the financial model, which is that we have a need. The way this model was constructed is we began with what the community's need was and then we worked backwards to figure out what the revenue is that we'll be required to meet that need. There's approximately $130 million in projects that you're going to see in this list. Collectively, I'll ask you to turn your attention to page two of the financial model. You'll see an item with a circled one. That's the list of 18, I'll call them project categories. Sometimes they represent one project, sometimes they represent several. But in each case, that collection of project list, the project list is what we're really here to talk about. That $130 million or that list of projects then drives nearly everything else in this financial model. It's all directly related to delivering these projects. Make sense? All right, I want to direct your eyes to item number two on the financial model. Oh, by the way, let me back up for a second. The rest of the financial model is directly driven by these projects. We then calculated the rise in revenue required to meet all those needs and then that's what delivered the financial model. Item number two on page two shows you where the bonding is going to occur. In fiscal year 09, we intend to bond about $50 million and again in 2010, we intend to bond another $45 million. In addition to that, I want you to see item number three right below it where you see some cash being put into capital activities. Turns out some of these activities are not able to be bonded or are better used or better approached using cash as opposed to bond mechanism. On the front page, the first page, I wanted to draw your attention to a couple other things. Operating expenses in particular are just modeled to rise as they normally do. We're not anticipating an increase in operating expenses other than the normal rise. Most of this increase, in fact, most almost all of it is directly related to these bricks-and-mortar projects we have to do. I want to reiterate that for you. Okay, before we move into the details of the fee, I want to pause for a second and address another issue. It will be all too easy for criticism to be leveled at all of us for raising this fee. The fact is we have tried many times over our life, over my lifetime, to address this issue and we have yet to do it for reasons that include sometimes there wasn't enough money in the general fund, we tried using general fund money, surpluses on occasion, and the result was we we were haphazardly trying to fix the system. You cannot run a sewer system by fixing it every so often. What you have to do is fix the things that are broken, but you also have to be proactive in your maintenance and that's where we have failed. I also want to raise it by a fee because a dedicated fee is proper course with whereby law it can only be used to do projects that are related to the maintenance and operation of our sewer system. I prefer that approach. And finally, it's the fair solution. As my six-year-old likes to say, if you poop, you pay. All right, let's get into the fee. In an overview, what we're going to do to the fee is this. We're going to increase the rates for all sewer activities, all rates, by 48 percent now, and in fiscal year 2010, we're going to raise them again another 35 percent. So that's 48 percent now, and beginning fiscal year 2010, we'll raise them another 35 percent. Thereafter, the rates will be tied to the consumer price index for urban consumers, CPI-U, to allow it to grow naturally with increases in inflation. And then finally, I want to talk to you about a minimum fee that we intend to impose. So if I can turn your attention to the next sheet in your packet, the regional comparison, which is black and white, looks like this. I want to show you a couple items. What you're seeing is the latest data that we have for regional comparison for Lexington and the surrounding communities, and as you'll see, we're currently the lowest sewer rate by quite a margin. First thing I want to draw your attention to on the Lexington line is look at the minimum bill, and you'll notice that we're one of the few that has zero in that column. So one of the reasons we wanted to implement a minimum bill is that it will mitigate the rise in the rate across the rest of the section that I'm about to discuss, and therefore mitigate the impact to families. As you move across, what you see is the column headings are the consumption gallons or cubic feet, 2,000, 3,000, 4,000, 6,000. An average family is somewhere in the 4,000 to 7,000 range. It just depends on their consumption level. So that'll give you an idea of where you might want to look. At the very bottom of the chart, you're going to see the results of the fee increases in 2009 and 2010, and what they will do to the bills of the appropriate columns. I'm just going to say one out loud for the purposes of the viewing audience. If you consume 4,000 gallons a month, which is a small end of a small family, you currently pay about $10.03. In 2009, you're going to go to $14.93, and in 2010, you're going to go to $20.16. So $10 now, $14.93 soon, and then $20.16 in the future. The next thing I want to talk, I would turn your attention to is the other chart, the color chart. This compares our fees nationally, and what you'll see is, for those in the viewing audience, on the left-hand side is Houston, Texas, and on the far right is Atlanta, Georgia. Their rates are $26 per Houston is the smallest, and Atlanta, Georgia is $104.52 at the highest. Our current rate is $20, approximately $20 a month. It's so low, it's not even on the chart. After we make the changes that we're proposing today, in fiscal year 2009, you'll see that we go to $27.26, which is the left-hand arrow, and then by fiscal year 2010, we go to $36.80, which is the right-hand arrow. You'll see that we compare favorably to the national data. I want to draw your attention to a few other things on this chart. Charlie, help me here. There was Nashville, Cincinnati, Knoxville. Nashville, Cincinnati, and Knoxville, and I believe there's one other, Louisville, are all on here, and they are cities that are also under consent decrees. They'll give you some ideas, so how we compare to other cities that are also under consent decrees. Okay, so that's what it means to some of our citizens. Also in your packet is the average consumption, or the effect on the average user. I'm not going to go over that today, but I have it in your packet for you to review. We're going to make a couple other changes to the fee while we're working on it. The first one is that we've decided to add a new program to help offset the impact to some of our families. The first program we're going to, the only program we're going to add is one for senior citizens and folks on fixed income. We're going to offer a 30% discount to people who are qualifying, that qualify under this new program. That's one way we're going to mitigate the increase. The second way is we currently have an indigent program with the existing rates and fee structure in the ordinance. We're going to retain that, but we are going to update it slightly. It's currently phrased in a very convoluted way, and we're going to change it to be a much simpler solution, which is to say, if you qualify under the various rules, you will be, you'll be allowed to have up to a 50% discount. All of these that I've just described are still subject to the minimum fee. Everyone pays the minimum fee. We all pay at least that much, and then after that, if you need a helping hand, we're here to do that, either via one of those two programs. Now I'm going to take a look to the future. The proposed ordinance will be, hopefully, on the new business items for next Tuesday. I want to give you guys time to absorb and look through this material before we bring you the ordinance. After that, it'll flow through the process naturally. I need to warn you that this is a single piece of legislation. We're going to raise the rates as soon as possible, subject to some contractual issues, and then again in 2010, we're going to implement the Consumer Price Index legislation, the new Senior Citizens program, as well as the updates to the existing program. All of that is one piece of legislation, so when it comes to us next week, it's going to be a fairly convoluted piece of legalese. I'm sure Law will be here to help us all get through that, but I wanted to warn you, when you read the actual ordinance, it's going to be intense. Looking ahead to year four, we need to talk about the future past where we are today. One of the programs, I'd like to turn your attention back to the financial model. If you look at the financial model, page two, under where the circle one is, a couple of the projects have to do with assessments of our sewer system. There's a sewer system assessment and a pump station assessment. Those are several studies that will take approximately four years to complete. The studies will be done in three phases, and the phases are oriented to our worst problem areas to our least problematic areas, the worst coming first, so that we can get on to those problems sooner. Over time, we expect to uncover even more problems as a result of those assessments. So what you're seeing today are the known problems that we need to attack now in approximately a year and a half to two years. What I'm telling you, though, is that there's a lot remaining that we don't know. So in four years, I hope this is not true, but I believe it's probably going to occur that we may need to raise the fee yet again. We won't know that, though, until the assessments are complete. Now, some communities have opted to handle a change like this by having a progressive increase for their fees ad infinitum, for example, 10% a year forever. We felt like that wasn't appropriate because we prefer to control our destiny as opposed to let it just happen. We don't have a clear enough picture of what the fourth-year situation will look like, so we opted to do what we do know now and no more than that. So I wanted to let you know and keep in mind that we may not be done, and in four years, we may be back here doing it again. It's just too unclear to say today. The next point I wanted to make about the future is that conservation now takes on a new level of importance because we get two hits for the price of one. As you all know, we're in the process of discussing how to create more treated water for us. That bill is affected by conservation, but once you use your treated water, your effluent also affects your bill in the sense that it gets treated by a sanitary sewer system. If you can serve, and we need to do a much better job of conservation, then we will save on both ends. It's a smart thing to do, and we need, as a council and as an administration, to take a harder look at what we're going to do about conservation. Let me end by thanking the staff. Bill O'Mara is here somewhere. Here he is. And Sandy Nichols have done an outstanding job. You need to know that we prepared five different scenarios and analyzed them every which way, trying to decide how best to mitigate the impact on families. The solution you have before you is unanimously agreed upon by the team. We had a meeting and made sure that we're all in agreement. So I want to thank them for their work, and Kina and Charlie, you all have been outstanding. I thank you for your support, as always. I also want to thank the council and the mayor. You guys have been incredibly supportive of me during this process. It's a difficult thing for us all to do, and I want to thank you for your support. And also, I want to thank you for your input. Many of you gave me great advice and suggestions, and I hope you noticed that they're in the legislation today. Let me stop there and let you guys ask your questions. Council Member James. Thank you, Mayor. Just one quick question, and I may have another later, but do you have a description of the two programs that you mentioned for the fixed income and the indigent program that we can review prior to our vote? We do, and we'll get you a copy of that if you'll handle that. The program for the indigent families already exists and is in your current ordinances. It's 16-60 or 59, somewhere in that range. The program for the senior citizens we're modeling after Louisville, if I remember correctly. So we can get you a copy of what Louisville's looks like, but I will get you a copy of the actual legislation as well. Thank you. Welcome. Council Member Beard. Thank you, Mayor. Don, what about industrial users of water? Are they metered separately for their industrial use, or how is that handled? That's correct. They are metered separately and they are charged separately with a different rate. I'm glad you asked because I forgot to cover that. In your package, that last sheet that I gave you covers the average account for residential users and non-residential users, and if you'll notice on that page, the rate of increase is exactly the same. That was one of our goals to ensure that businesses and residences carry the same weight in terms of the burden we're about to impose. And I guess the second question, which the public probably doesn't realize, is that fiscal year 2009 is only five and a half months away. That's correct. Without having the results of the EPA consent decree, is this going to be adequate to meet the EPA's requirements in 2010, I assume? It would be our expectation that in 2010, yes, that's the case. I want to caution you. The reason I hesitated is that after 2012, the after the fourth year, I can't say because we have to go through the assessment of the existing system and see just how bad off we are. As you know, we have clay pipes in some places. They're almost paper thin if they haven't collapsed already. Those kinds of issues will be uncovered by the assessment as we run cameras down every line and so forth. And then we'll know about year four, hopefully before then, what the bigger list may look like. And this is a question for Charlie, probably. Just off the top of your head, Charlie, how many miles of sewer pipe do we have to deal with? 1,100 miles, 26,000 manholes, 76 pump stations, plus or minus. I just wanted the public to know the scope of what we're dealing with. Thank you all very much. Council Member McCord. Thank you, Mayor. Don, thank you for your work on this. And as you said at the outset, you can't just keep pushing it under the rug and it's here. And the EPA sanctions are here. And it's a new day where we have to figure out what we're going to do and step up to the plate and actually do something. But I want to point out to this council and to this community that what you're looking at is the first of many things like this that we're going to have to start attacking. And in this community, unless we get serious about the income side of the ledger, this becomes a bigger and bigger burden every year. So as a council, and you know that I harp on this all the time, we have to start to demand job creation, high-wage job creation, so that you can offset these things and have the ability to pay for our city. There's no other way around it. We cannot build the second largest city in the state of Kentucky on service sector jobs anymore. And this is the type of problem that has a price tag attached to it that brings that to the fore. So again, let's stand notice that not only do we have to do these types of things and we have to be diligent about how we do it, but we have to raise the income of this community, both personally and corporately, so that there's a tax base that can handle some of these oncoming problems. But I do appreciate your work and it is time to get serious about what we need to do. Thanks, I was hoping you would bring up your usual point. Council Member Stennett. Thank you, Mayor. Council Member Blevins, thank you for chairing this effort. I know we've talked about a lot in our retreats. We've talked about this for the last year and a half for those that have been on council with the EPA's lawsuit pending. Just want to get a couple bits of information out there for people watching at home for the public. One, you all also looked at the operational efficiency of the sanitary sewer department and Charlie, I don't know if you want to speak to this or not, but I think any of us, before we want to raise any type of fee or tax, want to make sure we are operating efficiently. And looking at the numbers back from 03, you know, there's about a 50% jump in personnel, a 40% jump in operating costs. Do we anticipate the same kind of jumps? Therefore, on down the road, are we going to have to increase to fund those two things rather than capital? Because I think what I'm seeing, what I'm hearing, we're at the point now, what we're trying to tell the public is every dollar we're bringing in is just funding our current operation. It's not capital at all. We have zero capital dollars. And that's what we're telling people the bottom line is. That's a great, great point. Thank you for bringing it up. You're exactly right. Our current income stream is just enough to cover operations. And in fact, if you go back and do the math for inflation, our last sanitary sewer fee increase was in 2002. We'd have to raise it 15% just to bring it back to even considering inflation. So just keep that in mind. The other thing I'd like to point out is you're right. If you look at operating expenses on your financial model, they're assumed to increase only under normal circumstances. This is based on historical data and not on guesswork. The forecast for that increase is all on historical data. Then in personnel, you'll notice a slight increase between 08 and 09. Then thereafter, it too levels out. The increase between 08 and 09 is due to a few people we will need to add to administer what we're about to do. All the rest, and I don't want to put words in your mouth, Charlie, but it's my understanding we intend to outsource most of the work we're going to do over the next few years. In terms of capital? No, in terms of personnel. We're not going to add a big load of people here. That's not what we're doing. Almost all of this is directed at bricks and mortar projects. And that's the important point there, that this is going to fixing things, not adding more beef to government, so to speak. That's right. Thank you. The other thing I want to look at is when you looked at the rate hikes and the progressive amount after 4,000 gallons, after 6,000, I know some other cities in the South, for instance, if you jump over 6,000 gallons, they really do basically penalize you if you don't conserve water. Did we look at any type of measures like that to force, almost force people out of their pocketbooks to conserve water? No, we didn't. I think that's a good idea that we might want to look at in the future. And then after the 6,000 gallons, is it going to be anticipated flatline fee, a flat amount that they're going to pay per thousand? The first, the way that works is you pay the minimum charge and then it is a flat fee for any number. It's actually based on cubic feet, but you'll see both numbers. It is a flat charge there on, no matter how high you go. The only difference would be whether you're residential or non-residential consumer. Okay, and then also just to put out there in the public forum, we did talk about possibly going ahead instead of raising fees today, waiting on the EPA findings to come out, by going ahead and bonding and using debt, using money from the general fund to pay the debt service for a couple years or four years until we're able to find out what our real number is, rather than having to raise the fees twice. But you want to talk a little bit about why we decided to go forward today and raise them rather than wait four years? Well, my preference is to go ahead and start today for two, for all the reasons that I mentioned earlier, but one other is general fund money is precious right now. We don't have enough. And by the way, that's what got us in this problem in the first place. For the last, for my entire lifetime, the way we've tried to fund this is left-handedly with a little bit of money here and there when we had it. We can't do that anymore. We need a dedicated funding stream and we need to do that now. And that's the point I wanted you to make because, you know, councils change, administrations change, and we've made promises that we haven't kept. And this will keep our promises to our citizens and provide an adequate sewer system. And then the last, I know a couple of, a few of us have been talking about when we're going to have some public discussion and when the timeliness of this resolution or ordinance that you're going to bring to us, was it, you said, next Tuesday or two weeks from today? My intention is to bring it next Tuesday, barring an unforeseen circumstance that would prevent us from doing that. You will get it in new business next Tuesday. And I would just say, you know, in terms of the speed of this, we have a couple of weeks until our next council meeting. So whatever time we need to work to get more public input from anybody that's going to, you know, incur a significant fee or for those programs you'd assess to get more information out there over the next couple weeks, we have a couple weeks. That's correct. And that's, that was the intention of first giving you a presentation, then bringing the legislation, and then as you, as you all know, there will be two subsequent formal sessions after that because this cannot be done with a suspension of the rules. It has to go through the normal process so it'll take, what, three or four weeks by the time it's all done. That should be sufficient time for everyone to say whatever they need to say. My intention would be to discuss it at next week's work session, whatever we need to discuss that day. Very good. Thank you again, Commissioner Coe. Thank you. Thank you, Charlie, for all your hard work on this. It's a long time coming. Thank you. Commissioner Stevens. I had a, as I look at your financial statement, revenues were about 26 million roughly in, well, 25, 5 in, sorry, 29 million in 07 estimated this fiscal, last fiscal year. And of that money, about five and a half million were spent on debt service. So I would say that debt service is more than just the operating budget. So we are spending five to six million dollars a year on bond coverage, which would be to try and rectify some of the problems we've had and build new things like that. So not all of it's been operating expense. That's what I would, is that the correct interpretation of this statement? You're absolutely right. We are carrying bond, old bond debt right now. And the other thing I would point out is we used to have operating capital. That's now evaporated, which is part of the problem as well. We still have some operating capital where we could do small one-year type projects. That's all gone. Well, I certainly support this issue. I did have a call from a constituent today, and since all the Brain Trust is here for sewers, maybe you can answer this question. This person received, usually has a water bill of about $40 a month. And several months ago, she got one for $300. And no leak was found, and she didn't wash her car that month. But she, and this person called the service center in Illinois, Alton, Illinois, and was told that by the person that was contacted there, that there were so many water companies couldn't keep track of each individual one. So she paid the bill because she thought that she's gonna get her water cut off. And I don't think that was imminent, but I'm sure you give them a few days. But is there a control system that you can monitor these? That would be an extraordinary change from a $30 or $40 bill to $300 to make sure that they don't, some ways, or do we depend on the water company to do all that? I guess that's my question. The answer is yes. We depend on the water company to do all that. Is that correct? Because we had the problem a few years ago when there was a discrepancy in what was calculated and what was collected, I guess. That's correct, and we have audit proceeds that we go through quarterly. We look at everything, and on an exception basis, we review the details. And so we can look at your constituent bill individually, but I want to let you know that we do a 100% audit every three months, and once a year we do an extensive audit on top of that to make sure that the problems that we had in the past do not replicate, which was not getting new service put on rather than billing too much. Right, but you don't have a system whereby if there's an outlier on a bill or something, you might look at that individually? It does not. You wouldn't know, I guess, if the water company. You would not know. However, the phone call to Illinois should have been referred to LFUCG to research that specific bill. Well, the constituents figured that out on their own, and it was fixed. She does have quite a credit now with the water company. What she's using, we'll probably be able to use it for a year or so. But I just wonder what controls, because I think it's important, particularly if we're going to raise the fees, we need to make sure they're accurate. So we'll need to have a public-private partnership with Kentucky American to work that out? That's correct. Okay, thank you. Councilmember DeCant. Thank you. Councilmember, I just have a couple of observations. As we begin to, hopefully this will go forward, I support it completely, and as we begin to get a better handle on our sewer system, I hope that this kind of information is translated and sent and becomes a part of our total planning process in the city. I think for too long we have approved the development of certain areas without the right kind of information. I think we've flown by the seat of our pants too long, and it looks like now we're going to have more facts and figures. So my hope is that as we progress in this, that this becomes a something that is very important to our planning process, so that we don't approve the building when there isn't the adequate infrastructure. So I just make that as an observation. I think it's important that this, you know, as we're looking down the road and saying, you know, I'm sorry you can't build here, but you will be able to build here in two years when we're at a point to be able to serve this area. And not only just, I realize that in new development there's new sewers, but you know the results that happen on the pump stations or the treatment plants. And I think so as we get a better handle on this, I think it's absolutely imperative that this become a part of our planning process. And also talking about treatment plants, you know, we keep on hearing, you know, eventually there's going to reach that time where we're going to need a new treatment plant in this area. And I'm assuming that you have talked about this, and that will probably be one of the issues, I assume, that will we be talking about three or four years from now after we get into this process? I honestly don't know about a new treatment plant three or four years from now. I could believe either outcome. What I do know is that at the end of the assessment we'll have what you're asking for, which is a computerized model of the system, overlaid on our existing geographic information systems. That's fancy for saying we're going to have our sewers overlaid on our maps, so when we do our planning we'll know exactly where we stand. Thank you very much. Council Member Gordon. Thank you, Mayor. Thank you very much, Council Member Blevins. I appreciate all your hard work. I do have a question probably for one of the financial folks, maybe Bill or Kina or Sandy, about the tap-on fees. And can you help me understand, now there is no increase in here in tap-on fees, is that correct? That's not true. That's not true. I meant to finish my answer to Mr. Beard. We are increasing the tap-on fees. There's some other ancillary fees like suspended solids. What are those called? Extra strength charges. Those are also going to rise by the exact same rates. Okay, so that maybe explains then on page one the sewer tap-on fee at the height of, well maybe not the height, but in good building conditions for new residential, we went in 0.3, 0.4 to 1.4 million, 1.5 million, 0.5. We're up to 1.4 million in fiscal year 08 forecast and then it jumps to 2.1 million when we're in a downturn of the housing market. And I mean, is that totally due to increase in tap-on fees or what's the portion of it that's forecast for the housing market? I see heads shaking. Let me ask Sandy to tell you the assumptions behind the sewer tap-on fee there, but I know a large chunk of it is that it's increasing. I kept it even at 1.4 and then increased it by the 48% and 35% rates. I'm sorry, can you repeat that a little louder? I'll try. I kept it at 1.4 million and then increased it at the same percentage that the sewer user fees are increasing in 2009-2010. Do you know how many tap-ons we had? How many in fiscal year 07? No, I do not. Who knows? Does anybody have that number? We can get it for you. I don't have it with me. And what the, you know, I'd enjoy seeing a little bit more about that since it does involve the housing market and since it, the number wasn't included because I think that's a pretty significant jump in the number there. Linda, I just want to make sure you understood what she said. She's saying that, she assumed that the number of tap-ons are going to stay the same. Right. The only change is the change of what we charge. So we're assuming the housing market is essentially flat in terms of tap-ons for the next four years. That's a pretty big jump then. It's from 1.4 million to 2.1 million. That's the 50% increase or 48% increase. It's strictly increasing the fees. We're assuming the same number of tap-ons are going to occur, which is a conservative assumption. Well, we would hope, at least in our community, the number of tap-ons would continue to increase. So the number of tap-ons is the same. The only thing's changed is what we're charging you when you do tap-ons. So it's total fee increase. That's correct. So you'll email me the number of tap-ons. Somebody will. Okay. Thank you. While we're on that subject, I want to point out to you, though, that by and large, by far, the biggest income is through the sewer fee itself. Tap-ons and the rest account for a very small percentage of what we're doing here. Council Member Gordon, are you through? Council Member Beard. Thank you, Mayor. One other thing. You were talking about the process of billing, and I just wanted to point out that Kentucky American Water Company is well compensated for doing that work for us. As I remember, sometime last fall, that number came past us, and it was in the mid-six figures. For what I would consider to be a fairly simple Programming change that they made Some time ago, I guess But I think everybody the public needs to know that we pay our way on this Pay well as it looks like to me. Thank you Councilmember Wayne Thank you mayor. I think you've done a great job on this. I Preparation for the meeting today did a few calculations myself, and I think you're pretty much on the money from my calculations I did have a couple of questions for you And I don't know if you have this answer or not because it may not be in your belly wick But I was just curious as when we had our last rate increase for Santa search charges. When was it? 2002 2002 all right, and what was the one prior to that? Say 96 and prior to that 80 something, okay Was there any particular justification that That our sewer service fees were so low compared to all the surrounding areas And was there any reason that they were so low? I mean, what was I have to ask prior governments? I think and councils and administrations, so I can't answer well That's why I like your proposal here to have the right adjusted by the CPI because The cost of operations continue to go up and the failure to increase the right It's not really good management of our centers or systems. I think that's excellent The other question that I had I noticed that the revenues that you're forecasting for user fees are declining from 2006 and the years 2007 and the years 2008 and I just wondered why those would go down the nothing the fee is related to the number of persons who have tap on Already tap on there, and then we're adding somewhere around 1,500-2,000 new tap ons per year, so why wouldn't we have at least some increase is there some justification for that lower revenue forecast? Let me make sure which one you're talking about are you talking about the change in the tap on fee collections? No, sir under the sewer user fee in the fiscal year to that was the top line fiscal year. Oh six It was twenty four point eight nine million and then it went down to twenty four point three six million and 07 and then in 080 went down to twenty two point nine million Why why would we have a several million dollar decrease in revenues in those fiscal years when we have the same number of tap ons? And we should be adding houses during that period of time I'm told it's conservation from our Panel here is the answer People are conserving their their consumption of the water which in turn lowers the income that we have and this being a newer Phenomenon is something that's been plugging in now new new construction Is required to have? lower consumption One Fixtures which uses less so the newer construction actually uses less per Person than older construction and that started to show up in our total usage, right? But why would we the existing homes are our base? And the only thing I'll be adding would be the new homes coming in. So why would we actually see a decline? I'm just trying to the part part of it is is Conservation part of it is is Seasonal and how hot how cold although that's not that's that affects the Kentucky American water Total usage. So we have shown we have seen a total usage and average per household usage Diminished in the past few years So your plan was to be fairly conservative in our initial estimate for these two years Just in case since we don't have hard data, okay All right. The other question I had is It's the free cash flow from the fees from minus the operating expenses Which would tell you about how much we could bar In bonding if we need to max out our bonding capacity, what would be our maximum bonding capability under these fees? Actually Since these funds are dedicated our bonding capacity is the total amount of whatever we collect. So But technically, I mean we couldn't do that because we still need operational money, but because the fund is dedicated It doesn't affect our debt capacity The capacity of the debt is to whatever this fund itself can sustain, right? Understand I'm sorry. My question was probably ill phrased what I'm trying to figure out with the new rate increase How much can we borrow out of the sewer fund right now with the new rates that are shown there? In other words our operating expenses and our revenues are pretty much known We we maxed the debt capacity You'll see that we With the 50 million dollar borrowing in 0 9 and 45 million in 10 And we end up with a fund balance of just under 2 million dollars at the end of 12 So we've maxed the borrowing capacity under this model and the the proposed increases Okay Am I well the reason I ask we're increasing the fees from 23 million to 48 million that looks like we would we're gonna have some additional operating expenses, obviously To what councilmember Blevins referred to when we're talking about some of these things cannot be bonded I mean, we're gonna have to put some money into the assessments the assessments can't be bonded So we have to use some of that increase for the cash that will be required for the assessments done during the first four years Okay Councilmember Lane if I could direct you to item number three that we talked about earlier The cash items that Keena just referred to 10 million in 2010 11 and 11 9 and 2012. Do you see where I'm talking about? On page 2 at circle number 3 That's effectively operating capital or cash that we're using for some of the project load between now and what 2012 I Would assume maybe not fairly but at 2013 will that cash become available for other activities? So there's there is more bonding capacity that frees up in 2013 and may give us a glimmer of hope that we won't have to raise the rates quite as much in 20 Right, but but for example, if we go ahead and spend these one-time monies and then we get the system up and running We'll have more free cash flow at that time. We can then borrow out money. Exactly. Okay All right. I think those are all my questions. I'd just like to say again I think this is one of the best things I've ever seen come before our council I've been a proponent of You know doing a financial analysis and doing five or six year projections out into the future and I think this has been an excellent Exercise and I give everybody worked on it accolades. I think it's excellent. Thank you All the credit goes to Bill and Sandy for the hard work there. They've done an excellent job. That's an excellent job. Thank y'all Councilmember James Thank You mayor, this is very detailed information and I'm sure that there are Constituents that are be that will be interested in viewing this How can they get access to the forms that you've shown us today? The the one that's showing here is not viewable by people watching television. They can't read it How can they get a hold of all of this information so they can help us and guide us as council members to make the Best decision. Thank you for asking the easiest ways to contact your council member or the council office at two five eight three two zero zero We will have hard copies available for printing if you want to prefer that and we'll also have a PDF made that we can use electronically for anybody wants it electronically Vice mayor great And I may have missed this councilmember Blevins, but before I even ask the question I want to give the Reinforce the high-fives that you're getting today. We all appreciate this heavy lifting that you all have done Don can you give us again that just the process of working through this the public so that the public understands Those are in our viewing audience today as well and the timing that we've got on processing this. That's a great idea I don't have the council's calendar before me. So maybe you all can help me out Next Tuesday, we will have a new business item that will contain this legislation and as a reminder It's going to be fairly convoluted in terms of the ordinance change Today I've described what the legal words will say and do that will occur next Tuesday And as always we have the opportunity for the public to comment on items before the council during that work session at the subsequent formal council meetings, which I believe will be two weeks after that date and then a Say again, the 24th is the first one and I'm sorry say again The Tenth of No, we won't have it before us this Thursday. So the 24th, I'm sorry the 24th will be the first opportunity at a formal council session and the one after that would be The seventh. Thank you Anything further for councilmember Blevins. All right. Thank you very much We are now Through with the presentations that were on the agenda I've had some requests from several members of the council to try to get together some information to provide a little background about the The PSC proceeding and so I asked a Barbary to pull together presentation for you and Like to go ahead and turn the floor over to Dave now Good afternoon. I'll try to be brief on this And maybe we could do the questions at the end what I've tried to do is lay out the first part of the presentation is as a history timeline and The second one would be a kind of a frequently asked questions at least the questions that have come to my attention About the Public Service Commission hearing and the water supply issue. I've got Charlie Martin here to address Issues that are more specific to the Bluegrass Water Supply Commission and our involvement in that particular group The although you could list quite a few other entities that would be involved in this issue the primary players the last 20 years have been the Entities that are listed on this slide including the Lexington-Fayette-Urban County government Very Briefly the Kentucky River Authority comes into play on this because they have a general responsibility for acquiring the dams along the river from the Army Corps of Engineers, they've actually done that with respect to a few of the dams and Essentially they charge a weight of withdrawal fee that gets passed through to use a consumer on your bill In order to fund most of the work that they end up doing but they have actually acquired some of the dams are in the process Hopefully ultimately of acquiring all of the dams and they would be the ones that are responsible Primarily for the condition and replacement and refurbishment of the dams on the river Division of water they come into play because as you look at any kind of potential water solution The division of water is controlling how much water can be taken out of the river at a particular location They generally Define this as being a safe yield and by definition This involves some stressed conditions when the permit is issued There have been three droughts That are worth noting in the last 20 or so years the first one in 1988 was deemed to be moderate There were 12 days of voluntary restrictions put in place The 1999 drought is probably the one that you all remember the most we had the most significant Restrictions put in place for that for the most significant amount of time and then of course most recently Towards the tail end of the summer this year. We had a drought as well There have been quite a few Studies done on the issue of Central Kentucky's existing and future water supply needs since 1986 Here are the larger studies that have been done As part of the case the Attorney General presented a document that was affiliated with a Kentucky Water Resources Institute study that indicated over the last 50 or so years there's had been a more along the lines of 40 or 50 studies That are somehow related to the river basin and the amount of water supply At least four of these studies largely involved the Lexington-Fayette-Irving County government two of them were Essentially well three of them were directly at the behest of the council or the mayor's office The Kentucky River Basin Steering Committee was formed by Mayor Basler in 1989 We had the Fayette County Water Supply Committee formed by Mary Miller Then we the council actually worked with the Kentucky Water Resources Research Institute in the 1999 timeframe in order to perform a study of the water deficit issue and then the most recent study as Has an involvement with the Bluegrass Water Supply Consortium Commission starting in 1986 at that point in time This is probably a good place to start all this Kentucky American published a planning study in which they Identified a deficit of some magnitude in pool 9 and that's where just so you all know that's where the majority of the water is currently drawn from on the Kentucky River and Their recommendation at that point in time was that they were going to build a rather small Treatment plant downstream of their pool 3 and I think in 1986 dollars We're talking about less than a 20 million dollar project in order to do that. They actually started the preliminary work In 1988 we had the first drought that was mentioned as a result of this drought the DO The Division of Water steps in and they adopt a more restrictive flow restrictions to apply in the event of a drought and as a result Of that according to the record in this case in the previous cases The pool 6 was eliminated by Kentucky American as being a feasible option From 1989 to 1992 In 1989, we have the Kentucky River Basin Steering Committee form in 1991 they recommend they acknowledge that there is some supply issue and they recommend conservation and new replacement dams During this same period of time Kentucky American enhanced their existing treatment capacity by an additional 5 million gallons a day up to their current treatment capacity, which is a total of 65 million gallons a day At the same point in time towards the tail end of 1992 they update their planning study after they had studied some alternative and They select purchasing treated water from Louisville as the most feasible cost-effective solution From 1993 to 1998 the primary focus of this was a Public Service Commission case. It was open in 1993 They opened a case essentially to investigate the overall source of supply issue for Kentucky American There was some delay in this at least in part because at the same time the Kentucky River Authority was studying in conjunction with The Kentucky Water Resources Institute a safe yield study to see how much water could be taken out of the Kentucky River They finally got around to having the public hearing in May of 1997 the overall gist of the hearing was to determine the adequacy of Kentucky American source of supply and the magnitude of the deficit They'd know it to my knowledge and I could be wrong about this But I believe that they never really Ordered it never really identified the total amount of deficit at that point in time instead in August of the same year They ordered Kentucky American to adequately Address its total maximum consumption through 2020 So that is the order and it gets referred to as far as what what the water companies operating under the PSG's jurisdiction ordered to address the water supply issue In light of this Mayor Miller appoints the Fayette County Water Supply Committee To also study this issue and they end up recommending a Louisville pipeline solution In the same time frame Kentucky American actually begins the initial work on the pipeline 1999 was one of the most significant years in this timeline At that point in time there was serious opposition to the pipeline raised by a citizens group going by the acronym Nope the Attorney General's office was of record that they were opposed to the pipeline and The urban county government essentially adopted a resolution later that year that favored a Kentucky River solution a predecessor resolution was was actually adopted by the council earlier in the year in which They essentially were asking the Fayette Water Supply Committee to wait a while before they made a final recommendation for additional study and as part of that resolution effort The council had the Kentucky Water Resources Institute brought in along with a number of other players to study the issue independently At the same time we have a significant drought taking place The study included input from all of the listed players right there I probably have left a few of them off Essentially a technical advisory group was formed and the end result ended up being and if you look at the whereas clauses to the 1999 water resolution resolution number 679 99 in some way it kind of Incorporates what some of the findings were of this particular study From 2000 onward Kentucky Americans stopped work on the Louisville pipeline project The bluegrass water supply consortium is formed at its high point It had 17 members the urban county government has been a participant from the very beginning Kentucky American is a participant but under the legal Structure that ultimately the Commission undertook. They are not legally allowed to be a member At the same time the River Authority was acquiring some of the dams and beginning some preliminary work The 1993 PSC case Essentially turns into the 2001 PSC case now This was open kind of with a broad focus but the overall gist of it was Let's see how big the deficit is that needs to be addressed and let's maybe come up with a solution to this through the year 2020 that is technically an open case that has been merged into the current Public Service Commission case We were among the parties to that case. There were several other parties as well, including the Attorney General's office bluegrass water supply Commission or consortium through bluegrass ad is essentially hiring O'Brien and gear at this point in time They are tasked to do a complete study to determine the best source of additional water supply For the central Kentucky region that could be brought on within the rather short time frame the time frame at that time was five years They were hired through the bluegrass ad I don't have the breakout Unfortunate how much of this six hundred twenty thousand dollars was specifically towards the report I believe the majority of that money was paid in fact to O'Brien and gear for the report They have done some other work as well. However Most of that money was grant money however, the urban county government the Kentucky American Water Company and other members of the consortium slash Commission have been on an annual or sometimes less than annual basis contributing Some rather small amounts of money towards keeping the essentially keeping the operating expenses of of the group going and Part of that money came for the study actually came from these kick-ins To my understanding as best I could tell we had contributed to date $26,000. I think my understanding Charlie can correct me I think they expect perhaps another $5,000 for this past fiscal year Which would be normally what we've been kicking into this issue The actual study There were multiple public workshops held. I believe the number was six. This 70 is probably a high number on here I think the 70 is is just a listing of all of the different alternatives that that were in play at one point in time I believe they'll actually only seriously considered 40 and they short really do they shortly reduce that number in half because about half of them were not deemed to be something that was going to be feasible within a time frame that was being recommended in 2004 they finalized their study. They chose a treatment plant on pool 3 as the recommended solution as You'll see in some following slides The Louisville Water Company was one of the respondents one of the considerations in here and they were given several Opportunities to update their proposal to make it more responsive to the needs of the group What happened initially was they ended up being what was deemed the lower cost alternative when this clarification was done They were deemed to be be up built Actually more in cost than what the pool of three solution was going to be cost issue aside The initial recommendation of the group was to go with the pool of three solution Even if you assume the Louisville Water Company solution was going to be more expensive. I mean, I'm sorry more less expensive The results of this were presented to the Intergovernmental Committee of the Council in April 2004 and to the best of my knowledge I believe they were also presented by the Bluegrass Water Supply Commission or some part thereof to the entire council at later points in time Then I believe that would be in the 2005 time frame They used five ranking criteria Capacity water quality cost to the extent implement to implement abilities a word implement ability and flexibility The pool three option came in first followed by the Louisville Water Company pipeline the construction cost was 265 million dollars for a 45 million gallon a day plant plus a grid It is my understanding that this also included some raw water line supplementation from the Ohio River, which is one of the reasons that you get a Significantly higher amount on this project than the construction costs you're getting on some of the current project proposals Once again, they were initially thought to be the least cost alternative until their proposal was clarified the Clarification was in making sure that they had the ability to reserve enough water to actually Meet the need of the region and when that issue was pressed forward The result was what looked like it was going to be at one cost Alternative the cost went up accordingly with the need to reserve that excess water capacity Here's some timeline milestones with the Commission I'd have to defer to Charlie if you all have some more specific questions about this very quickly Bob Wiseman was the original representative of the urban county government past Commissioner of Public Works Wayne Waddell Followed Bob after Bob left the government and then Charlie has stepped into the fold after Wayne The Kentucky American Water Company is a participant as well. Although once again legally, they cannot be a member the initial Louisville Water Company proposal was provided as part of the in you know analysis in July of 2003 they revised that and I'd have to defer to Charlie on what exactly the revisions were in August of 2003 There were a number of public meetings held while they were looking at all these things. I think it was six Two of them were held in Fayette County. They were advertised to the public. There was some participation by the general public particularly Individuals that might be affected by certain types of plans that that owned land that kind of thing The feasibility study was initially completed in February of 2004. Once again, it recommended this pool three option The Commission itself was not legally formed until August of 2004 there are Subject to whatever the result of some of these recent developments have been I believe at that point in time there were nine utilities involved And they were committing to up to 31 million gallons a day there Was an investigation in 2005 with respect to trying to come up with a Temporarily temporary solution of a less significant magnitude from Frankfurt I think was for five million gallons a day. This was determined to be not viable late in 2005 at the same point in time later on in the year you have Louisville further supplementing its excuse me its proposal and then you have a Feasibility study being performed as to whether or not Frankfurt could expand their facilities With the assistance I assume of the Bluegrass Water Supply Commission Bluegrass Water Supply Commission at that point in time was pursuing their own solution to this problem. They actually went to the point of filing Applications on this same pool I think they did some exploration work as to trying to get a land an option on some land to build a treatment plant on While this was going on Kentucky American goes forward to decides and the public comment that they made about it was they could no longer wait For the Bluegrass Water Supply Commission. They were going to go forward with their own proposal with or without them they announced that in the spring of 2006 the idea which they conveyed to the Public Service Commission was going to be we will Come back with a Actual plan to address this issue and we will file a certificate of need and that's what this current case is The actual certificate of need that they filed there was a follow-up proposal from Louisville made to the Commission in October of 2006 and Then in light of their presentation to the council and other groups in the in this past summer They were requested to actually provide additional information and further potential further proposal to Bluegrass Water Supply Commission Which was never done is my understanding and that was earlier this year Currently what's happened between Bluegrass Water Supply and Kentucky American is earlier this year. They agreed to commit $170,000 to the design that was being done by Kentucky American This money essentially was being kicked in to study The additional five million gallons that they were willing to try to commit to and that's what that money was used for and that's how that part of the Engineering study or in the design engineering was paid for when Kentucky American Was doing their study in November of this year and during the pending case in front of Public Service Commission The Bluegrass Water Supply Commission has entered into a formal agreement where wherein they are attempting to Come up with a method I think there's three or four alternative methods that they're looking at Where they can commit to the five million gallons a day and have the treatment plant built at a 25 million gallon a day Capacity instead of 20 million gallons a day Kind of jumping back into the timeline here As I'm sure you all were aware. We had a condemnation lawsuit filed against the water company in 2003 it was later voluntarily dismissed pending a ballot issue on this in the November election more than 60% voted against condemnation Once again in the spring of 2006 Kentucky American indicated that it was it was moving forward with or without the public or without with or without the Bluegrass Water Supply Commission They filed their case with the certificate of need which is the case It's currently pending in front of Public Service Commission in March of 2007 The project is similar in concept, but not identical to the Bluegrass Water Supply Commission's final recommendation It is smaller in scope and it is different in ownership The drought restrictions we briefly talked about the drought before we were under some sort of restrictions on some level from August to October of this year Frequently asked questions and I apologize if I didn't get all of the questions that you all might have about this But I heard enough of them Where I felt comfortable that these were ones that at least some of you all wanted addressed on some level about all of this What is the problem? Well, the problem is that Kentucky American has a source of supply and treatment capacity issue They can only treat up to 65 million gallons a day under their base rated Capacities under their DOW withdrawal permits now they can exceed these for limited periods of time during certain conditions But as as I understand it, that's not a very advisable thing to do on a long-term basis And at some point in time there would be restrictions that would kick in that would limit them from being able to do that But that's one of the reasons why during the drought this summer for instance They were able to continue to provide or on the highest demand day of 2006-2007 they can violate their permit for a very small amount of time and go ahead and Produce an extra 5 or 10 million gallons I believe the high demand days in the last couple years have been 73 million gallons a day and those would be single occurrence type events the other issue that's driving this is that they can they are because of restrictions that are put in place in the event of a drought Their safe yield of water on their permits goes down accordingly During drought events and although once again, they can get exceptions to this from the division of water They're really only supposed to be taking 35 million gallons a day of water during a drought period What is the PSC deciding well, Kentucky Americans technically filed to Construct a 20 million gallon a day plant and associated facilities It has the ability to be expanded to 25 million gallons a day to accommodate the Bluegrass Water Supply Commission It doesn't it doesn't really matter what that decision has got to be made Before the plants constructed as far as Bluegrass Water Supply Commission participating, but they don't have to go back for additional approval In order to approve it up to the 25 million gallons a day with the Bluegrass participation Essentially, they're determining whether the application shows that there is a demand and need for the project and that it is not wasteful in duplication On some level although it's debatable this this involves some Element of the reasonableness of this project in relation to other proposals I.e. more specifically the Louisville Water Company proposal or other reasonable alternatives How much water is needed? Well, there's been a general acknowledgement since the late 1990s that there is a source of supply deficit issue in the river and I'm going to kind of couch the next one on the Bluegrass Water Supply Commission study They indicated a regional shortfall of 67 million gallons a day by 2020 I can't really speak to whether this 22 million gallon a day assumption they made has ever come to pass They were making some assumptions with respect to Water that's being returned to the basin from like for instance treated wastewater Being credited for that and some other things I do not know if that came to pass the Kentucky American estimated estimated portion when they did their study back in 2004 was that they make up about 50% of this 67 million gallon a day number What's happened in the meantime is? Kentucky American has better numbers than they did three years ago. So their updated numbers according to them Indicate that they actually only need more along the lines of 20 million gallons a day rather than 30 million gallons a day That's what they've represented in this case as best we can tell those numbers are based upon Actual demand numbers and permitting numbers and whatnot. They're not simply numbers that Kentucky American pulled out of the air But they are indicating to the Public Service Commission. We need to address 20 million gallons a day to get us through 2030 and That would you know in the event of a drought of record type of thing There would still be restrictions put in place and all that other good stuff But this is this would take them through most of the demands including drought demands up until 2030 according to them Do we really need to have that much additional water Kentucky American is responding to the applicable regulations as well as the mandate from the Public Service Commission and that mandate as well as the regulations talk in terms of addressing the maximum consumption of your consumers Does that mean You can use as much water as you want in a drought of record No, it's but it's generally the idea is in most normal occurrences as well as in most normal droughts You they need to be in a position to address the maximum needs of their customers They have already exceeded their estimated safe yields during maximum day demands and during droughts they have indicated that what would happen upon completion of any type of project is that they would Immediately begin using 10 million gallons a day of it so that they could put less stress on their existing facilities Once again, this proposal takes them through 2030 It is an attempt to address both drought as well as estimated normal growth The growth numbers come from the Census Bureau Because of economies of scale there would not necessarily be a substantial savings even if the size of the plant were reduced as An example on this we asked them as part of the discovery well, how much more does it cost you to add the five million gallons of the treatment plant and For that extra five million gallons the cost is old is relatively small in relation to the entire project They estimated a maximum of ten million dollars to add that additional five million gallons of treatment. I Don't know what happened here, but but I can't say that I Can't say that I don't want to lead you all to believe the number would be exactly the same going in the other direction But I'm sure you all are aware that there are certain Costs you're going to expend in building any treatment plant and those are substantial so if there was a desire to Limit this to 15 million gallons a day or 10 million gallons a day That's not necessarily going to equate with with a corresponding for instance 50% savings in the cost of the project Wouldn't conservation and other measures address this problem This has been a subject of great debate during the hearing and it has been all through the study of this water issue and What has been recommended by the Attorney General's office as well as something that we're planning on recommending would be that? They need to do a better job in the conservation area however Even in a best-case scenario as best we could tell by looking at the case and the numbers that were being put in there You could probably only count on 5 million gallons a day of additional water on average being available As a result of additional conservation efforts leak detection that kind of thing Shouldn't Kentucky American plan for beyond 2030 Well, they're limited in some respect once again by regulation to a reasonable planning horizon Which is generally given at 20 years There would be another potential legal issue if they with them being able to come back in and have it the cost passed due to ratepayers if they decided to build a project that was Not needed on some level until a later point in time They're not really going to be in a position to recoup the cost of doing that Until it actually goes online and has some use to the customers This came to light in the case as well The planning projections are extremely speculative beyond 20 years because of population and consumption variables and assumptions the specific example from the case was Louisville water company had done some projections for the Louisville area in the late 1960s trying to project the usage for that area in the year 2000 and those were off by more than 100% So if they had acted upon those they would have had an overbuilt capacity Where they weren't using 50% of what they build Which alternative is cheaper as Best we can tell from all of the evidence it is cheaper to construct a pipeline The Kentucky-american proposal seems to be a bit more concrete in the Reliability of the numbers because of where they are in the design phase Than Louisville, so I would caution you that I think in reality the 113 million dollar number is probably low Because what really hasn't been significantly explored is what it's going to cost to go over or under the Kentucky River It is cheaper to operate the Kentucky-american proposal over time Particularly if you assume more water as opposed to less as needed With the assumptions being as equal as as we could possibly make them It would appear that if you assume the same water level needs that Kentucky-american is assumed The pool three option is probably going to be slightly cheaper over time However, even if it's not the the Attorney General's Witness has testified that it would be within a five to ten percent range either way and in his determination That is a reasonable cost-effective solution How much more will my water bill be well Any Solution that addresses the magnitude of the problem that we're talking about is Estimated and this is only an estimate because it would be subject to whatever happens in a future rate case Would be an additional eight to eleven dollars a month The number that was specifically provided by Kentucky-american For the hundred and sixty million dollar projected cost I believe was nine dollars and seven cents a month However, perhaps what needs to be kept in mind is even with this increase which would be of a magnitude of somewhere between forty to fifty percent Your water bill would still be along the lines of a dollar twenty or less a day for six thousand gallons a day of water Consumption this assumes current rate of twenty five dollars a month, which is ballpark what the existing Average residential rate is plus an eleven dollar a month increase How Much did the 1999 council resolution impact the decisions of Kentucky-american water company and the Bluegrass Water Supply Commission? Resume I cannot say that it did not impact it because I think in some part it did it's it's open to speculation As to exactly the extent of that impact Certainly with respect to when people get into talking about feasibility of a project one of the things they've looked at Historically is the position of this council on the issue and if they look at the 1999 resolution It it favors in general a Kentucky River solution however, that being said Both the revised Bluegrass Water Supply Commission study and the analysis of the two options performed by the Attorney General Indicated that in all likelihood the pool three option is going to be more cost effective over time or within a reasonable variance So basically, I'm trying to tell you all is it seems like there would have been a move towards if you're looking at cost Effectiveness is the driver. It seems like there would have been a there would be a natural push towards the pool three solution Even if you take the resolution out of the mix You also have to keep in mind that there was a significant there was significant opposition To a Louisville water company pipeline and that not just to name a few There was the Attorney General was on record as being opposed to that and there was a citizens group Form called with the acronym. Nope, and these opposite these Oppositions were not directly related to the position that the Irving County government had taken in the resolution Is the Kentucky American Water Company proposal the same as the Bluegrass Water Supply Commission solution no They both focus on a treatment plant and pipeline on pool three That's maybe arguably where the similarity ends. The Bluegrass Water Supply Commission proposal was for a larger plant It was to include some raw water supplementation from the Ohio River and it was also to include a grid Probably most importantly on some level is it was not going to be owned by Kentucky American it was going to be owned by the Bluegrass Water Supply Commission with the water to be sold to the Kentucky American Water Company Why doesn't BWSC build the plan I Defer to Charlie on some of the many issues that that Have come up with respect to this But the primary overall issue was they were unable to obtain the financing to be able to do it What is the relationship of the BWSC to Kentucky American Water Company BWSC originally hoped to be the lead partner in a project addressing this issue however the water company did not obligate itself to purchase water from the Bluegrass Water Supply Commission and The Commission was unable to follow through on the project Going forward once again, the Commission has funded a large portion of the water supply Commission has funded part of the design the part that's focused on the five million gallon a day extra treatment capacity and In November, they actually consummated an agreement where the expectation is by April of next year they will have decided whether they can commit and follow through on that obligation or not and They are have been of record and continue to remain in favor on on the record of the Kentucky American water company proposal Why didn't Kentucky American purchase water from the Bluegrass Water Supply Commission? To the best of my this is my best attempt to try to address this issue They are the entity that is actually under the legal obligation to address this issue at this point in time There's no other entity that is under a legal obligation to address it So on some level that arguably gives them the latitude to choose how whatever method they want to choose in order to address the issue in the spring of 2006 once again They claimed that they couldn't wait any longer that the time was right to go ahead and address this and they were going to move forward with a proposal by early this year with or without the Bluegrass Water Supply Commission and they have consistently taken the physician as Best we can tell both as part of this case and as well as their dealings with the Bluegrass Water Supply Commission That they have no interest in being less than the substantial majority owner of any water supply project Why can't Crestgates be added to the existing dams the pool 9 solution Some of this is is kind of reading between the lines I couldn't put my hands on the actual documents yet that verify all this It's my understanding that it's generally understood that there are significant environmental and cost issues Involved with even placing temporary Crestgates on the existing dams. I believe the concept was to put a forefoot Crestgate on the dam that could be implemented in the event of a drought that would capture Several million gallons of water. The effect of that is to raise the river an additional four feet and That result apparently does raise environmental issues as well as you have to go out and acquire Some interest in the land in order to do that that Interestingly enough would be something that's in the purview of the Kentucky River Authority To accomplish and not anybody else. We've been talking about so far. They have a Proceed the River Authority has proceeded on the initial dam work and to my knowledge that has been done without Crestgates Bottom line this really does not appear to be a viable option because of those issues Does pool 3 have enough water and what about the condition of its dam The consensus is the hearing was and it's the same age as most of the other dams on the river and all of them need To be replaced frankly, but the consensus was it needs to be repaired or replaced But it's not in it in any more imminent danger of collapse than any other dam on the river The KRA has seemingly committed to Prioritizing its repair if a certificate of need of any sort is approved on pool 3. In other words, it's their intent They've stated this on some level that if there's a project that's approved on pool 3 where there's water being drawn From that pool. They would go ahead and expedite the the Repair of that particular dam There was some testimony that indicated That there's some likelihood and this is you know open to speculation on some level that you could Potentially draw an additional 5 to 10 million gallons a day safely from pool 3 That's based upon the studies that were done as Recently as this year to see whether or not pool 3 had enough of a capacity even for the 20 million gallons or the 25 million gallons however to date that the only permit that has been issued is the permit from DOW to Kentucky American Water Company for 20 million gallons a day maximum Shouldn't LFU CG further study this issue. What's the hurry? Some of the things that come to mind on this are Arguably, this has been studied on some level for the past 20 years We are a member of the Bluegrass Water Supply Commission They do support this proposal and they've independently reviewed some of these alternatives that have been suggested Obviously, no one can predict a drought We may be in a period where we don't have another drought for the next 15 or 20 years or we may have another one next year There has been no real ability to nail Little the water company down on its proposal and I Personally don't hold out much. Hope that that may change significantly over time based upon what we have seen So far, I can't tell you that they couldn't come up with a better proposal But based upon the effort that's been put in there at some point in time They probably would need to see some level of assurance They probably would need to see some level of Assurances of a continuation in order to spend the money that it would take to actually come up with some answers to some of these things This issue comes in about the highway easements and I'm not trying to put words in anybody's mouth But it was pretty clear that the general practice is you aren't supposed to put them in the easement That was followed through on some level by Louisville water company and they were In you know kind of told to look at the applicable standards that were put in place That being said I think part of what Louisville water company was trying to say was well We we're not really saying it has to be in the easement We're just saying maybe it would be a good idea to locate it Adjacent to the easement. So I think they would tell you that you know, they're their proposals not predicated on having to be located in the actual physical Existing easement that exists today, but they might be of a mind that it would be more easy to Locate it adjacent to that easement You get into how long a study would take and even with the best intention you a possible ramification is that you get into another one of these situations where you have a continuation of Some indefinite duration. There is some financial cost in the delay. Any project is going to go up the longer you wait to build it and History in the current case have shown that any proposed solution is going to be Extremely expensive and it's going to be subject to a significant amount of objection There's no You know There was some discussion and testimony about whether or not there would be any less opposition to a Louisville pipeline Today than there was in in the late 90s and the answer is less than clear But certainly you could anticipate that there would be at least some objection to that Couldn't Louisville water company further modify its proposal to become more attractive Well, they've already had a couple of opportunities to do this both with you all and other Interested entities as well as with the Bluegrass Water Supply Commission and frankly, they they did some of this during the hearing itself As it was taking place or attempted to do this There are a number of unresolved big-picture issues that would need to be addressed on any proposal to bring water from Louisville One of those is It became clear at the hearing that their actual proposal did not match up in the sense that they were Physically reserving the amount of water that was indicated by Kentucky American to be necessary In other words, the dollar 71 was not predicated on doing that I do not know nor did they represent what the additional cost impact of having to do that would be But My my best guess is it's going to be more than the dollar 71 that was proposed in order to be able to do that Can Louisville water company lawfully guarantee the wholesale rate that was an issue that the Public Service Commission staff brought up at the hearing Apparently regardless of what contract they might enter into this if it ends up being arguably a subsidization by other Louisville water company ratepayers of this particular project they probably have the standing to go before the Commission and argue that the contract is inherently unfair and arguably have the ability to have the Commission to undo the contract and that would lead to a a Rate that would not be whatever the contracted rate ended up being Where will the pipeline actually be routed and what will the level of opposition be? What entities will own and or operate the pipeline beyond Shelby County and how much will it cost to go over or under the Kentucky River What if Frankfort or an affiliated group owns the portion of the pipeline in Franklin County Essentially with any proposed pipeline The owner is going to have to pass through an assessment or fee to anyone that uses the line So that they can get their costs back The Louisville proposal largely assumed that public financing would be used so if Franklin If Frankfort or the utility board over there actually ended up owning this segment it does not appear likely to result in any kind of cost savings necessarily and Bluegrass Water Supply Commission was aware of this was a made it was Further made aware of this at the hearing was asked about this and their position was still that they are committed to the Kentucky American Water Company project regardless of whether or not, you know, Frankfort independently goes forward with some sort of pipeline with Louisville Shouldn't the urban county government consider owning part of this project. Well, once again as best I can tell Kentucky American's position is they want to be the substantial majority owner of any project The type of financing that was mentioned by the Public Service Commission in their order was chapter 58 financing I am NOT a bond attorney, so I'm not going to get into details on this, but it's my rudimentary understanding that by having that type of ownership arrangement where we would be potentially in the minority of That is not an available form of financing to utilize I think from what I understand it has to be the exact opposite Situation in order to be arguably be able to use that type of finance But once again, I'm not a bond attorney and I would have to defer any kind of question about financing arrangements to someone that would have the expertise I Think that's it and maybe Charlie should come up in anticipation of whatever questions you all might have as well and Thank You Dave for taking the time to pull together that overview for us And I know you had some help from Charlie in terms of trying to pull together the timeline So appreciate effort both of you all made in doing that Let me address a couple of issues that were raised by the PSC in the order that they entered just before Just before the Christmas break they indicated some confusion about the reason for the silence of urban County government and I want to tell you one reason why I think that has been a prudent course of action for urban County government to take Despite the PSC's questions about it. I don't need to tell anybody Who's a member of this council about how much time and energy has been devoted to our prior? Water fights and what a distraction that was from the work of urban County government. I Think we are wise to avoid engaging in a similar kind of exercise also It's it's abundantly clear that this is an issue not for our decision, but for that of the Public Service Commission they have first of all the statutory authority to do this is presentation outlined and In addition to that they have substantial resources That are unique to the PSC they have somewhere in excess of three point eight million dollars worth of economic and engineering financial and engineering Analysts and analytical capability At their disposal which is certainly a resource that we don't they have great deal of experience in dealing with The highly technical issues that go into the cost calculations for one of these kinds of projects and then aside from from the fact that I think we need to avoid getting into a Water fight again, and the fact that we know the PSC is the statutory body charged with the responsibility of making these decisions We have a lot of things on our plate that we need to attend to Many of which we have been wrestling with pretty regularly during the course of the last year We need to talk about all of our land-use planning issues. We need to talk about ways to address the affordable housing issues We need to talk about making sure housing is safe through code enforcement. We need to talk about economic development We need to talk about a whole assortment of issues that are the the province of Urban County government and to the extent we can focus on those things which are our responsibility and minimize the degree to which we Devote our time to things that are the PSC's responsibility. I think that is time well spent. I Back in the summer Wanted very much to be supportive of our neighbors who have been working very diligently through the Bluegrass Water Supply Commission processes over the last Several Years actually since about 2000 they have worked very very hard. They've put a lot of creative energy into it as you know, they have retained some very capable Consultants to participate with them and to try to sort through the rather complicated issues and About the time that I I Was about ready to voice my support for those efforts the Louisville Water Company proposal came on the scene I Thought it prudent then to wait and see what happened with that proposal because On the surface when they arrived here in in June in July. There was a substantial cost differential between What they were proposing and that which had been? Proposed with the pool three option and Kept waiting for that proposal to take shape But as you saw from the presentation a little while ago even at the conclusion of the three-day hearing in November There were a number of unanswered questions with regard to the Louisville Water Company proposal and so My concern About the the ambiguities of that proposal were not alleviated. I had another concern too, though I wanted to make sure that the Public Service Commission conducted a thorough and fair hearing And I was absolutely convinced that occurred based upon what time I had to be physically present there and on the basis of having the opportunity to Watch some of the proceedings live on the internet and on the out on the basis of the opportunity to look at almost all of the rest of the hearing That is stored on the PSC's website the the PSC was actively engaged the commissioners themselves the staff did a fine job representing the The Interests of the Commission I was especially impressed by the Caliber of the work that the Attorney General's office had done their office of rate intervention as some of you may know the Attorney General's office is charged with responsibility in all utility cases of advocating on behalf of consumers and I thought they did a very good job. I was particularly impressed by the testimony of their expert Scott Rubin who I Thought did a fine job of analyzing the case He'd been involved in this proceeding for many many years. It was involved back in the 90s when there were There were proceedings before the PSC and incidentally he opposed Kentucky Americans proposal in the 90s But in this particular instance, he supported Kentucky Americans position subject to some conditions, which I think make a good bit of sense so I was very impressed with the with the results of that hearing and and then the PSC has recently raised a question about Whether there ought to be some public-private partnership because of some potential benefits with public financing my read Of chapter 58 as Dave Barber indicated a few minutes ago is Consistent and that is that we'd have to own the substantial majority of that For there to be any realistic Chance of those public financing benefits being available to us. I don't I don't think that is remotely likely We've been through several years of negotiation through the Bluegrass Water Supply Commission And Kentucky American's position has not changed during any of that. And there was certainly no evidence at the, at the hearing that was to be the case. So, um, for all of those reasons, I don't think the, the idea of the public private partnership that, um, the, the commission addressed in its, um, December order is a viable one for us to consider. Moreover, uh, I'm not particularly interested in this government, um, being involved as a minority partner, or even as an equal partner with, uh, somebody in a project like this. I would want us, if we were to elect to be in the, uh, in the, um, water treatment business to be in a position where we can control the, the destiny of, of that facility. And, uh, I just don't see that as being in the cards. At the same time, there is a, um, public private partnership proposal on the table that is the result of negotiations that have taken place over the course of the last seven years now. And that's the, uh, one proposed by Blue Grass Water Supply Commission. And, um, I want to be supportive of those efforts as a part of our efforts to work better with our friends and neighbors who have been participating with Blue Grass Water Supply Commission. So my conclusion, uh, after looking at all of this is it is time, uh, for us to move on. I think the, uh, one thing that we really haven't focused on is the cost of delays for consumers. Uh, every time one of these projects gets delayed, um, in any material fashion, the cost of construction go up. And if you look back at the cost of the solutions in the nineties versus the cost of solutions now, the difference is stark. So delay is a very expensive, uh, proposition. Um, I don't want to do another 20 years worth of work. I don't really want to do another study. I don't want to, um, subject the, um, the citizens of Lexington to the added expenses of it, of additional delay associated with, uh, postponing a decision here. Last, but perhaps, um, most significantly, uh, I am, I am convinced that the pool three option, especially if we're able to, uh, find a way to get the Bluegrass Water Supply Commission, um, element, uh, involved is a very reasonable proposal. Um, I mean, reasonableness is kind of in the eyes of the beholder, I suppose. And, and, and I understand full well that reasonableness is ultimately a decision that the folks sitting on the Public Service Commission, um, must make. But, um, I thought it very compelling case was made as I listened to the testimony in the hearing, that this is a reasonable proposal. Uh, furthermore, the president of the Louisville Water Company testified that he thought it was reasonable. And perhaps most significantly to me, the, uh, Attorney General's, uh, uh, consultant, Scott Rubin, reached that same conclusion and, um, and, and defended his conclusion very, very effectively when he was subjected to cross examination during the course of the proceeding. So, um, some of you have been, been wondering, apparently the Public Service Commission has been wondering about, uh, where we are, uh, I wanted you to know where I am and, um, to the degree, um, any of you have questions or, or care to discuss it further, I'd be glad to do that. And I see Vice Mayor Gray and Dr. Stevens have both indicated a desire to speak. So Vice Mayor Gray. Thank you, Mayor. Well, first things first, I definitely can't disagree with you on the list of objectives and challenges that we got before us. We, we sure have those before us. And regrettably, some of these things we have discovered come to our plate, whether we want them or not. And some of them come to us even on Christmas Eve or the day before Christmas Eve, which was, I guess, in this case, the, uh, order from the PSC. And I suspect too, that I'm not unlike many of you had expected. In fact, for the last four months, I think we expected that the Public Service Commission, with its $13 million in funding and with the, uh, $4 million allocated to financial analysis, capabilities, and engineering analysis, was going to make this judgment and in an, in an informed way. And in fact, I guess some of us thought, as David, you may have suggested in your great presentation, given us this 20-year history, that it was a slam dunk. But yet what occurred was, I guess, it looks like that the PSC, in its wisdom and looking at this, says it's not a slam dunk. There's still lots of questions left. That's certainly not what any of us who, as the mayor described just now, as he said, who've gone through the last several years of, of issues associated with the quicksand of the, of the water debates, would have found particularly or find particularly attractive. But in my view, we really can't escape it and escape working along with the PSC in coming to as quick a solution, as effective a solution, one that answers this question, are we getting the water we need for today and tomorrow at a fair price? And is it clearly understood that we're getting that deal? Are our consumers getting that deal? I would really, really have liked it in the last several months from, you know, literally working myself, working this on a daily basis, fairly daily basis. I'd really like it if American, Kentucky American had answered that question in a way that we could understand it. I'd really like it if, or have liked it if Louisville Water could have answered that question in a way we understand it. Likewise with the Blue Grass Water Supply Commission. And finally, with the Public Service Commission. I think we're each hoping at each of those steps that it would be answered in a way that we could understand it and move forward with the clear conviction that we're doing the right thing for our consumers, for our citizens. But it seems that they're not there yet. My first reaction on Christmas Eve, Eve was one of frustration and one of, of anxiety and some distress and like, gee, you know, Public Service Commission thought you guys were going to handle this. And they're saying, well, we need your help. And upon reflecting about it, it said to me, this seems to be an unprecedented situation. They aren't accustomed to doing this and they're doing it. So they're asking us for what we can do, what resources we can provide to help make this decision in an informed way, in a way that gets it done quickly. Now, I have to acknowledge that being in the construction business for 35 years, some familiarity with these issues. Between Christmas and New Year's, I walked down on dam number nine to actually see that project, see what's being undertaken down there because of the Crestgate option that has been proposed. Understand and now have a better understanding having walked the site of what that represents. Is it an option? As you said, David, there are infinite options here. There are lots of options. Is it a lower cost option? You bet it's a lower cost option. Absolutely. Is it going to take a long time, longer time getting the Corps of Engineer approval, environmental issues associated with it, local landowners who would not want it? You're right. Is the Louisville Water Company a viable option? I have no way of saying. I have no conviction that we can say today that it's not. Have they come with new information at the 11th hour? Yeah. Is that a bad thing? Well, only if you aren't looking at the cost. So in my view, I don't see how we can escape looking at this, putting a definite date on it, working with the PSC to come to some kind of a conclusion that is responsible and that's in the interest of all our citizens. Thank you, Mayor. Council Member Stephens. Thank you. I appreciate Mr. Barber's opinion and understand based on all the facts that he has reviewed why he might feel that way and also why you feel that way, Mayor. But it's a complicated issue and different people, when they look at it, come to different opinions, obviously. And I agree with the Vice Mayor that apparently the Public Service Commission wasn't able to come to a decision based on the facts that Mr. Barber presented to us and it was presented to the Public Service Commission. And they have asked us in an unprecedented way, really, to respond to them, which apparently hasn't been done before. So it indicates to me that they do not have adequate information to come to a real decision. I think that today has been an example of local government. We talked about sewers. Now we're talking about water. And those are very important elements to our community. And that's what local government's all about. Sewer, waters, roads, public safety and some of those issues. And I think this issue is of sufficient importance. We shouldn't neglect it and let and not respond to the PSC. Some of us today and yesterday, last few days, have worked up a resolution, which just been the last iteration. I think the last iteration just passed around. We do have some information from the Global Water Company and had an opportunity to meet with them yesterday. And they have made a lot of progress and particularly with their deal with Frankfurt. It makes the option of them coming to Lexington seem more reasonable or feasible. So I would I don't know if this is the appropriate time, but I would move that we approve placing this resolution on the docket. Second. Thursday night. We have a motion and a second. I suppose the floor is still open for further discussion of this resolution. And I've got Council Member McCord next on the list. I'll go ahead. And I was on the list to speak anyway after this. And I think that's a good lead in a question, Dave, for you, if you don't mind, so that I'm clear, is it am I correct? The PSC was looking at the Kentucky American case. Yes or no. Is that basically what this was? I mean, I know that Louisville Water became an intervener and therefore they produced numbers and so forth. But at the end of the day, the PSC's decision basically was is Kentucky Americans pool three option a go or a no. Is that correct? Technically, the only proposal that's in front of them is the Kentucky American proposal. OK. Now, they were willing to consider as part of their analysis of whether or not it was a reasonable, cost effective solution. Other proposals, including the Louisville Water Company proposal, much as you all saw presented to you all back in the summertime. OK. OK. So based on that, given this last iteration of this resolution, let me let me read this to to the first part of this so that people know where I'm coming from. There's a second line says, whereas there are apparently two remaining options for remediation of this problem, meaning the water supply problem, which is now before the Kentucky Service Commission, there are not two apparent remaining options. There is one option they are deciding upon. Yes or no. Now, what we've done is we've allowed Louisville to come in here and say certain things and muddy the waters. And I want to draw your attention to things that they've said, five separate sets of numbers Louisville has brought over the course of time, last set of numbers not even shared with the Bluegrass Water Supply Commission. Now, for those up here who feel differently than me, I want to ask you this question to my counterparts. If this was Kentucky American doing this, how would you have responded? We would have written them off. You all would have slammed them for being like that. We have nothing in writing that says that they have any approval from the state or the Federal Highway to come down the interstate. There's nothing in writing that says that. They're going to come across this bridge across the Kentucky River. They bring that before us two weeks before the Minnesota Bridge collapse. You know, I don't see how you're going to hang a pipe off of a Kentucky River bridge with surging water in it and let that happen. Maybe so. Maybe they're going to get approvals to do those types of things. The cost of waiting was brought up by the mayor, and I appreciate you saying that, Mayor. Again, if we're up here, we're talking about actually solving this problem, if that's what we're going to do, and this cost of waiting and this cheaper thing that we keep talking about. I heard you say, David, that in 1986, the solve for this problem cost less than 20 million dollars. And here we are today with hundreds of millions of dollars. And every time we wait, it gets longer. So, you know, when we hear folks say, hey, what's the big deal? We've known about this long. Councilmember Blevins gave an impassioned speech about what things look like when you wait. And the bottom line is, we're like with raw sewage and sewers. We're up against it. Are we going to solve a problem we've known about for two decades or not? The PSC is the body that has to decide that. They have a decision to make. And what it looks like to me is the PSC is trying to put us under the bus and make us help them out here in saying where we feel. Well, I'll tell you, part of the confusion may come from the fact that two letters were sent up to them saying certain things. And what does that actually mean? I think that this body may have confused them. I want you to also remember something else that Louisville Water said to us, sitting right at that microphone. When I asked them directly about their costs, they said they raised their costs 5 percent a year for their customers annually, every single year. Now, we always like to throw Kentucky American under the bus and we say things about them. But I want that to be in the record that Louisville Water Supply President stood there and told us they raised their rates 5 percent a year. So as we start to do this and we talk about cheaper and this and that and the other, the reason I'm going to vote against this motion is because there are not two apparent options. There is one option the PSC has to decide upon. That is what we as a body need to tell them to do, not take a look at something else and let's delay it another 15 days and play this thing out as long as we can, because ultimately there's there's some in the community that feel like we're up here just sort of monkeying around waiting for 2015 so we don't have to renew a franchise agreement. And we're back to condemnation all over again. And it's just another way to get there. I want to remind the people watching in this body that 60 percent of this community voted against condemnation. This city said no to those things. And if this is another way to do that, the city said, no, remember what the people said. We talk about looking out for the rate payers. That's what the rate payers said. So at the end of the day, I think that my question to us and to the PSC is, do we really want to solve this problem or not? If we want to solve the problem, then the PSC, I would ask you to decide Kentucky American Solution, yes or no. If it's a no, then by gosh, let's go find the next solution that works. If it's a yes, then let's get on with the problem and fix it. Thank you, Mayor. Council Member Stennett. Thank you, Mayor. I appreciate my fellow colleagues, Council Member Gray and McCord and Council Member Stevens for their passion in dealing with this issue. It's definitely one that many of us haven't taken lightly. And in absence of some specific moments of silence from this body, you know, ultimately the PSC, as has been said before, it's their job to make a final decision. And what's been disappointing is the unprecedented order that was issued on Christmas Eve has also been sent to Louisville and asked them for specific information, thus drawing them into the debate and drawing them into the final conclusion that the PSC is supposed to be drawing for this community and for any municipality in the state. I guess my question, David, to you is since Louisville has been asked to respond, when are they due to give a response? And have we seen anything from them? All of them, my recollection is four of the parties were required to respond on some level and all of the responses are due by close of business tomorrow, including ours and Louisville's and Kentucky American's. And will we get a copy of those responses? We will. I can't promise you I'll have it tomorrow, but we'll have it regular mail delivery probably Thursday morning. OK, I can circulate that to you as soon as we have it. Have we had any discussions with Louisville Water Company? I have not had any discussions with Louisville Water Company. OK, thank you. You know, I think I think it needs something needs to be said. Something needs to be very clear with this council. You know, we try to do things above board and support one another and do things that are in the best interest of everyone's constituents in this community. And when we have council members meeting with Louisville Water Company and other Kentucky American Water Company without notifying other council members and bringing forward resolutions at the last minute is not a good way to conduct business. All it does is bring the combination debate back to the forefront. It divides this council. And if we really seriously want to solve this, this solution, we really want to say which one's better, then we need to have all the information in front of us. And I think that's what Vice Mayor Gray alluded to earlier. We don't have all the facts. And we have certain members on council going and getting their own facts that still haven't been presented to council. We have a resolution before us that now we're being asked to vote on, which, quite frankly, there are several issues I have with it personally. One being we talk about the financial cost. Who are we going to get in here to give us those numbers in the next 30 days? According to this resolution, we're supposed to be looking at revenue bonds, grants and low interest loans. That's been looked at several times, but yet I have not heard anything from the PFC, from our administration or anyone that can say who can come in here and give us that information in the next 30 days. Also, if you look at what's proposed before us, there are several bodies are mentioned in this whole debate that has postponed the decision, such as Kentucky American, obviously the Louisville Water Company, Blue Grass Water Supply Commission and the LFUCG. Well, ultimately, none of those entities get to make that decision. So we're back to square one and the PFC is going to make the decision for us. This is not the type of resolution we need to be sending to the PFC and I will not support it for the simple fact the way it was presented to us today and the fact that Louisville still has not been to this body on a formal basis and presented their plan. And if there's any other information out there that council members have today in this room, they need to present it because Louisville has not done so. And we would not be doing our job as a body using an option that is just an option. There is no concrete basis to what they're showing us today. Zero, nil, none. And if there was, Kentucky or the PFC would probably have denied Kentucky American's application and opened it all back up, as council member McCord suggested. So I will not support this resolution. Thank you, council member Gordon, I think is next on the list. Thank you, Mayor. Well, one of the beauties of debate is that we can differ and be civil about it. So as a council member who will, first of all, I will say I do appreciate all the opinions that have been expressed here. I will say as a council member who represents all citizens in Fayette County, I think it is not only my right, but my duty to talk to people and go meet with people and find out facts on my own. That's part of what I was elected to do. And that helps make me a better council member and helps allow me to make better decisions when it comes time to vote. So I have met with some folks from Louisville to try to discern what some of the ongoing most recent facts are. And the fact of the matter is we haven't asked Louisville to come give us an update. Louisville seems to be, from what I can tell, moving forward. And the things such as the big bridge across the Kentucky River may not even be in play right now. Louisville, I know, has met with the Department of Transportation and could give us an update of where they are and what they know. But we haven't asked for that. And I think this PSC order, particularly on page two, where it says, while most of the parties in the proceeding have formally adopted a position, Lexington Fayette Urban County Government has not. And its silence is perplexing. Why are we not willing to state something? I think that it is our job as elected legislators to find out as much as we can about any issue, whether it's sanitary sewer fees or a proposal before the PSC or something in a district. It is our job to gather information and be educated. That's why we're sitting in these seats. And I think that this particular resolution, what it does is what the PSC has basically asked is for us to be able to meet with Kentucky American, meet with Louisville Water Company, try to discern information. It's a 45-day delay. Now, in the scheme of 20 years, I personally don't think 45 days matters. I really, truly don't. And it's one of the most, if not the most, critical issues any of us up here will ever face. Yes, it's the PSC's decision. Yes, Kentucky American holds our franchise agreement and will fulfill whatever solution is approved by the PSC. So that's not the issue, I don't think. I think the issue is that as elected officials, we do what the PSC is asking us to do and educate ourselves to the nth degree and then make some sort of statement about it. And I would welcome more information from Kentucky American. Mr. McCord mentioned rate increases from Louisville. We haven't heard about rate increases from Kentucky American. I mean, if you want to get into that kind of detail, which I'm not sure we need to, there is something we could learn from every entity. Do we know that come this time next year, there will really be cities left in the Bluegrass Water Supply Commission? Do we know that? We don't know that. We've already seen what decision Frankfurt has made. Other cities are thinking on their own of what they're to do. So, you know, that could be a totally different picture in a year. And I just I really I do appreciate all the different viewpoints. I think they're all important. That's what makes this a lively debate. But I personally want us to go farther. I don't want us to just say we don't need any more information. We want the Public Service Commission to do it because after all, they've sent us an order, they've issued a very unusual order. And we need to have some sort of response to that. And so I've I personally believe this resolution is a good one. It does not take a position as to which solution is better. It asks us to gather more information for a very short amount of time. And so I'm supportive of this. My screen went blank, but the order that I now have up here is council members Beard, Blevins, Blues to camp. So Council Member Beard. I guess I'm up. Let me first say that I don't think it's necessary for a vendor and a vendor would be the Louisville Water Company to wait for us to ask them for something if it's pertinent news as relates to their pricing and their ability to do what they've asked us to do all the way back into the end of June. You know, 22 years is a long time. We were talking about 20-year horizons on the sanitary sewer situation and the sanitary and that really isn't adequate. I don't believe we have to be thinking a bit further than 20 years on this situation also. You don't build these pipelines easily, no matter where they come from. And we don't really have a crystal ball to know what Lexington-Fayette County is going to look like in 50 years. And we may have to go out and find a totally different solution somewhere in that span. This has been studied by the PSC and their people. It has been studied by Scott Rubin and the Attorney General's Office independently of the PSC. R.W. Beck did a relatively quick and dirty analysis for the Louisville Water Company, but they're a well-respected company and they come up with a little bit different answer. I think it was mentioned in David's study that the Bluegrass Water Supply spent roughly $620,000 on studies and actually $545,000. That maybe doesn't sound in the scope of things like a lot of money, but when your pockets are fairly empty, it's a lot of money. I'm very conflicted about this personally. The Louisville Water Company, Kentucky American Water Company, Bluegrass Water Supply Commission and us have to answer with briefs tomorrow, David? The deadline that applies to tomorrow is there were five specific questions along with documents that were asked of us to respond to. The briefs are actually, I believe, due next Wednesday. Next week. Okay. That's what I thought. We may get the answers we need and require next Wednesday that might make it more comfortable. So I don't see just automatically extending this another 45 days and then another 30 days and on and on. If the respondents, if we can't get the respondents to come and sell to us a significant amount of water, maybe the PSC can and we will see how that rolls out next week, I guess. We will have copies of those, I'm sure, forwarded to us. David? I'm sorry. You want copies of both the briefs? Of the other entities' responses. Sure. That's not an issue. So, you know, beyond that, obviously the resolution is relatively mild other than the delay and I don't favor a delay. If we could alter it somewhat that we favor the offerings of both entities and that we're looking out for our rate payers, that's fine, but I don't want to go past next week unless the PSC demands it. Thank you, Mayor. Thank you very much. Council Member Blevins. Thank you, Mayor. David, in your testimony earlier, which was great, by the way, thank you, or testimony, I don't know what you would call it, your presentation, it was great. That was very helpful and thank you for putting it together. Along the way, we talked about Louisville Water Company's presentations and their offers and how they changed over time and I want to make sure I heard you correctly. Some of the early offers did not include a sufficient level of guaranteed capacity for the Blue Grass Water Supply Commission. In other words, they wanted to ensure that they were going to get their 20 million gallons a day. Yeah, this gets back to taker pay. Right. And apparently what was not really clear, abundantly clear to all sides, was the concept of taker pay. Both the water company and the Blue Grass Water Supply Commission wanted assurances that their maximum utilization would be available under all circumstances. And what happened was the actual proposal that was put in front of the Public Service Commission, the immediate proposal by Louisville Water Company, they reserved that capacity in the pipeline itself. But when it came to reserving the actual water, that wasn't part of it. So that's the issue that I was highlighting during the presentation. Good. And what I think you also said was their initial proposal did not include some sort of reserve capacity. And when the Blue Grass Water Supply Commission asked for that to be included in their proposal, they came back with maybe two or three more. And at some point raised their prices as a result so that they could guarantee the capacity, and as a result, made their solution go from the lowest cost one to either equivalent or slightly higher than the now pool three. Am I right? Charlie's over here nodding his head. With respect to the Blue Grass Water Supply Commission dealings, I'd have to defer to Charlie on the details of how much that went up and stuff. I don't care about how much, but that's the reason why it went up. Yes. It began to narrow itself with the pool three concept as far as from a cost standpoint. It was an issue about available versus reserved, and reserved meant any day, every day. And there was a greater cost associated with that with reserving treatment plant capacity that was always there for Central Kentucky, and that made it. Okay, good. Thank you. This, for me, is the key issue here. Had we not had that problem occur three or four years ago, we would have two well-fleshed out, well-thought out competing proposals today. But for some reason, Louisville Water Company didn't want to guarantee us our 20 million gallons a day, so they made us pay for that privilege if we wanted to have it. I still don't understand that decision, and I have nothing but frustration with them for doing that. Here's why. Had they simply said, we would want to do something like this, a memorandum of understanding with Lexington and the surrounding communities that said, hey, if there's a drought in Louisville, you guys are in it with us, and we'll all conserve and save enough to cover both parties. And likewise, if Lexington, you need extra, we'll do whatever we can in Louisville to conserve. That's what Kentuckians do. We would help each other out. And had they taken that issue off the table like I think they should have all those years ago, we'd have two fleshed out proposals right now before us. But they didn't. And they've monkeyed around ever since. And it's driving me nuts. It's so frustrating. If you're detecting frustration from this council, that's why. So I will take a step aside and say, council members, if you're frustrated, that's where your frustration should be directed. Not at each other because we're differing, but at the Louisville Water Company for placing us in this position. And then, if you weren't frustrated enough, on Christmas Eve, the PSC drops a little note to us. Well, I want you to know that sitting up here, this issue has changed almost weekly for the last three months. Every time I think I get a good, firm understanding and I have an opinion, some new fact comes in and it's out of left field almost every time. That's frustrating. So that's why also the public is starting to wonder what we're doing up here. What's going on is we're getting all this new information constantly and we're having to react to it. And we haven't had the time. The physical time to get with all 15, each other, to discuss it privately or publicly. You can't do it. It's not, there's just not enough hours in the day. And so we get last minute proposals and letters that compete and conflict. I don't agree with doing it that way either. I'm almost regretful that we tried to do that back last December. But in the day that we were there, that's the only option we had. We had to act. We felt that was the right thing to do. So we did what we did. So I wanted to share that frustration with the public because I want you to know how hard this is operating over here without the benefit of the huge staff of the PSC and without the benefit of the staff of the attorney general. And with the mayor on that, I agree that Mr. Rubin is probably the best expert and we should probably rely on his testimony. I think he's done a great job. I can see a scenario where the Louisville solution would be my preference. I'll just say it publicly. The problem is I'd have to be king for a day to make that happen. There's too many ifs and wherefores and problems that would have to be solved. I would have to almost be able to do it by fiat to make it happen. But in my heart of hearts, I think that's the right solution, but it won't work based on the circumstances we're under. It just won't. So I am willing to give them one more shot maybe, and what we're being asked to do, if you haven't picked up on it, is ask the PSC for a delay until March 3rd to allow more conversation and more information gathering to occur. Let me pause for a moment and ask either Ms. Gordon or Dr. Stevens, what's magic about March 3rd and what concrete information will we get that might change our minds or give us any further concrete information between now and March 3rd? Because you all have talked with Louisville Water Company in the last day or so, and I'd like to know what's in it for us if we wait. Well, they said to finalize their information and get it to an acceptable form for the PSC to consider it, it would take 30 to 60 days. So 45 is halfway between. You split the difference. It's not very scientific. Okay, I think that's all I have to say. I'll just take it under advisement and think about it for a few minutes. Thanks, Mayor. Council Member Blues. Thank you, Mayor. And thank you, Council Member Blevins, for summarizing the confusion, the frustration, the anxieties that all of us in greater or lesser degree feel about this issue. What strikes me about all of this discussion and all of the debate and the information that we've been presented is that on the same information or lack of it, we can take different positions. I agree with the Mayor that we have enormous issues that we need to focus on. We certainly don't need this one in our laps. At the same time, we've got it in our lap. And that, for me, is a serious sticking point. I agree with you that the PSC has the resources, as you say, to make this decision. They've had excellent counsel. They've had a wonderful Attorney General's report. They have an effective staff and they have the information and the resources they need. And yet, they did not make this decision. Why not? I do not know that. But it seems to me that I have to take it on good faith that they want more from us. That they want us to consider this issue more, to come back to them with a definitive response. And that's why I'm willing to grant another six weeks for further information. To see if we can come to a conclusion based on a more solid rock than the one I think I'm sitting on right here. And that's why I'm willing to put this issue, this question, this resolution on the docket for Thursday night. Thank you, Mayor. Council Member DeCant. Thank you, Mayor. It's certainly been said, and I think it's very clear, it's loud and clear, that we don't have all the facts. And are we ever going to get them all? Who knows? But, you know, the Louisville Water Company, you know, we've seen change of costs here. You can look at the Kentucky American Water Company. You know, I don't know if they owned all the land to put the pipeline through to Lexington from Pool 3. You know, you have a few holdout, it could be in court for a couple of years. So I really feel confident that in 45 days we can find out on our own or with help from others so that we may be equipped as a council to make a better educated reply to the PSC request. You know, I think this resolution is reasonable, it makes sense, and I support it. And when you're looking at 25 years, 45 years is nothing when comparing this to the importance of all the citizens of Fayette County. I think it's a reasonable thing to do, and I do support this resolution. Council Member Myers. Thank you, Mayor. Dave, could you come up for a second? When Kentucky American Water originally submitted its application to the PSC, was there a deadline at which anyone else could submit an application? Perhaps, and the confusion is warranted, it's a Certificate of Need case, so the only application that's required is their application. There is no statutory deadline on this type of case. And what happened was Louisville Water Company intervened at a point in time that would normally be deemed kind of belatedly, but they did intervene. And as part of that intervention, they laid out to the Public Service Commission that they thought they had an alternative that was at least worth having considered on some level with respect to comparing it to the Kentucky American proposal. Okay, there's been a lot of conversation about whether or not they can get that right-of-way to come down the highway. And I'd mentioned before that I thought it was really irresponsible that we let them come in here before this body and present a proposal without having asked that question. Have they asked that question yet, do you know? Dave, my recollection from the hearing and from looking at the transcript again after the hearing is that the president of Louisville Water Company was asked whether they had had any conversations with the highway, I don't know if it's the highway department or, but the appropriate individuals that they would need to talk to to get that discussion going. And although it was rather evasive in the way he responded to it, what he seemed to acknowledge was that they had made him aware that their general policy and operating procedures do not allow the placement of utilities in those easements absent exigent circumstances that are specifically laid out in those policies and procedures. And then I believe there was an email put in the record by somebody that on some level purportedly made some sort of inquiry to the appropriate people about their ability to place those facilities in the right-of-way. And that person basically told him that the initial reaction was you're not going to be able to do it. Now you're able to do it, I think we've actually been able to do it on a very limited basis. And that's the whole idea, limited. The current existing structure contemplates allowing limited utility encroachment in those easements if they meet certain types of conditions, but it's the exception rather than the rule. Once again, what they tried to indicate at the hearing was they're not necessarily going to go in those easements. I believe to the extent they don't think they can go in the easement, their immediate plan would be to acquire land adjacent to those easements. That, I believe, is fairly portraying what Louisville's position was at the hearing on this particular issue. Do you recall what the PSC's response to that answer was? The PSC was more concerned, I believe, with the general proposition of routing a pipeline in that manner and the level of opposition you would get to it. Because that was one of the, I believe there were multiple Kentucky American proposals on the pipeline. I don't know, I don't recall which one was first in order, but one of the things they looked at was doing that. And I believe that once you get into the adjacent issue, there's significant property opposition by the private property owners to locating your facilities on their property. And based, at least in part on that, they decided to eventually propose a route that went along a different corridor other than the I-64 corridor. But that was one of the issues, was Kentucky American had essentially looked at doing the same thing and they decided it wasn't feasible to do it that way. Okay, so was there any conversation before the PSC regarding if Louisville cannot get that right of way or in the adjacent land or property to that right of way, what the cost would be or what the timeline would be? Because I know we've heard up here that Kentucky American Water doesn't necessarily have all the right of ways that they need. The timeline issue was more generally addressed and obviously the assumption on the timeline is that there would not be a significant issue with that proposed route. Okay, so they didn't really address what the timeline would be if there was. With respect to the cost, I believe that they think that it would not be without outside the cost over the 20% cost differential that you factor in anyway. I believe they think that even if they had to go somewhere else along a different route, that's not going to make that much of a difference in the overall cost of the project. Because I don't think they're assuming they're going to get a bunch of free placement. I really don't think they've made that assumption. I think that they would like to put it there because there would be no opposition to be had to putting it there because there's not a vested landowner right to the thing. But I don't think that their proposal largely contemplates getting free land acquisition costs. Was there any conversation before the PSC, did they ask Little Water why they waited so long to intervene? I don't recall, I don't think they did. They could have, but if they did, it was just in a very general, there really wasn't a lot of discussion as to why it took so long for them to intervene. Okay, was there any discussion as to why they intervened? Did someone come to them or? It was more in the context of the chairperson of the commission made a statement at the beginning of the hearing about what the scope of the hearing entailed. Just so that all of the parties would understand that they really weren't looking at two competing proposals directly in the sense that they were going to choose the best one and make a decision on that. They wanted everybody to be clear on the record going in that what they were looking at was specifically the Kentucky American proposal. But they were allowing Louisville to be an intervener in the case to present evidence that that was not the best proposal in order to address this. Could you repeat that one more time? What the chairperson did up front was he made it clear that the only actual formal proposal in front of the commission for consideration is Kentucky American's application. However, as part of the hearing process, they were willing to entertain evidence from Louisville as an intervener that that was not the best method of addressing the problem. Okay, thank you. So I'm going to kind of jump in from there. And I would say this, and I'm sort of with Councilman Blevins, in that if at that point Louisville Water had presented a case for their proposal where they had those easement right-of-ways guaranteed or not, being a better proposal than Kentucky American's proposal, I could see why we would be here where we're at here today. But to me, the Louisville Water Company was late getting in. I have to think about business acumen. And if I'm running a business and there's something before a body like a PSC, and I really want to be a player in that process, why would I wait until the 11th and a half hour to get involved in the first place? Secondly, if I am going to do that, I would certainly try to make sure I have my ducks in a row so that I wouldn't bring a proposal before them or before this body that didn't have that simple question answered as to whether or not they can get that right away. And so, to me, I think the letter that we did, I think more than anything, showed poor leadership from this body to the PSC, which is part of what they put in their letter, that they have two letters that went up there, and now this is sort of why this got kicked back to us. I think that the Louisville Water Company's proposal is not a true proposal, simply because they don't have that question answered. And I've asked several times from this horseshoe to get that question before the appropriate people and to get an answer for that question. And they still have not done it. And now we have people in this body asking us to prolong this process again for another 30 days, 45 days, 15 days, whatever, so that this company that brought sort of a half-baked proposal before us to get more time to get their act together. And I think that's ridiculous. The citizens deserve better. I think the PSC has the information they need. Just like Mr. Barbary said, they are not looking at two proposals. The second line in this proposal that we had before says, whereas, there are apparently two remaining options for remediation of this problem. That is not true. There is one proposal before the PSC, and that's why I'm not going to support all the reasons I stated before, along with what Councilman McCord said and what the mayor said, are the reasons that I will not support this proposal. Thank you. Vice Mayor Gray. I hope you'll excuse me. Point of order. I believe that Councilmembers who have not spoken get to speak before Councilmembers speak for two times. You are correct. Correct. I was just going down the list here, but there is a council rule to that effect, so Councilmember Lane. Thank you very much, Mayor. And I graciously allow it, too. I did have a question for David, and it has to do with when the, as an intervener, as the Arden County government is, when the PSC does make a ruling, do we have a period of time which as an intervener we can respond to that, raise objections, or ask for additional review of any issues at that point? I'm not sure I understand what you're asking me. Well, what I'm saying is, if the PSC makes a ruling, and we're an intervener in that matter, and we have an issue we want to bring back to the PSC, can we bring back an issue to them and ask them to reconsider it? At that point. I'm still not 100%. Under, unless something changes with what the current procedural schedule in the case is, all parties are going to be required and, you know, you can certainly file motions or whatnot not to have to do this stuff, but it would be a little late, in my opinion, to do it on the day it was due. But my expectation would be all of the four parties are going to respond on some level to the discovery, additional informational requests that the Commission propounded tomorrow. They might not fully comply, but they will at least partially comply with that. Unless there is a further procedural change by the Public Service Commission, all of the briefs are currently due on, you know, January 16th. So if I understand the resolution, which I've looked at for the first time a couple minutes ago, part of what this would ask us to do, if I understand it correctly, is I would assume that if you all pass this, it would have to be Thursday night in order for me to meaningfully act on it. And part of my instruction at that point in time would be to file a motion, probably Friday, that asked the Commission to essentially give us an extension of time to file our brief, as well as to further consider these issues, and I would attach the resolution as being evidence of my desire to do that. Now, would they be required to rule on that prior to the 16th? No. Would they likely try to do so? Probably. But the sooner that that got done, obviously, the more time they would have to act on that. But there's no guarantee, I guess what I'm trying to tell you all is there's no guarantee, even if this was adopted by you all on Thursday night, that the Commission's necessarily going to let us know whether they've given us an extension of time to file our brief, because they simply may not rule on it prior to that point in time. I think they would try to do their best to do that, but... All right. Did you prepare the document that was presented to us today? No, sir. Okay. Do you feel that it would be appropriate, since you're handling representation with the PSC, to actually prepare that document? Well, in order to prepare it, I'd have to know what the desire of the Council was, and I haven't had any significant input from the Council on what their desire on this issue would be. But to answer your question, normally the Department of Law would assist in the drafting of appropriate legislation. Okay. And then I have a question for Charlie, too, if you could. You've represented the Urban County Government on the Blue Grass Water Consortium and then the Commission, I think, most of the time in the last, what, four or five years? How long have you been on it? I've been involved with them since the Commission formed in 2004, so a little bit over three years. And would you say that you've attended most of the meetings that they've had? Nearly 100 percent of them. Okay, that's good. Well, my question is, you know, we have the Kentucky American Water Company, we've got the Blue Grass Water Commission, we've got our legal department, and your P.E. had been on this committee, and this committee did vote in favor, you know, of the solution to go, you know, to the Pool 3 up near Frankfurt. Do you feel that the Commission did a real thorough job of evaluating all the options and analyzed everything carefully, and do you feel like the decision-making process on that level was thorough and well done? Yes, I do. I do believe that. The, you know, by the Commission entertaining multiple offers from Louisville Water Company, I felt like there was a strong desire on some of the Commission members to make certain that they were making the right decision, because, you know, it impacts their rates as well as it would impact ours as well. And so, yeah, I think that there was an abundance of analysis of multiple alternatives, and that's where a lot of that money was spent with O'Brien and Geer. They spent a certain amount of money on that initial feasibility study, but we continue to go back and look at other alternatives, including the potential of expanding Frankfurt's plant in order to be able to provide interim water. We looked at Boone County again. We looked at some of the other water districts along the Ohio River. We looked at everything multiple times. And that's what I told the PSC during the public hearing at Dunbar High School, that that was telling to me after looking at this over and over again, that the Commission ended up unanimously endorsing this Pool 3 option. Okay. Then the other question I've got is on construction costs. And if you assume that the project is going to be $100 million, that's just an arbitrary number, and we delay it for, say, a year, how much of an inflationary cost do you think would be impacted on that cost, on $100 million? It's going to be $3 or $4 million a year? Council Member, I wish I knew the answer to that. I would be smarter than I am. I really couldn't speculate. I think that some folks have represented that the costs only continue to go up, and I think that's a fair representation. How much is, it's anybody's guess. Right. Well, with regard to construction work that you're managing in the, you know, for the urban county government, if there's a delay on it, would you generally say the price goes up rather than goes down? Yeah, I haven't gotten a low one yet. Based on, if it's a five-year-old estimate, it's not any good anymore. It's only going to be higher. The point I was going to make is that if it's just a 3% inflationary rate on $100 million, that's $3 million, which is $250,000 a month in inflationary cost. And so that is a delay. You know, if we keep delaying, obviously the costs are going to go up. I think that's all the questions that I had for you. And I really wanted to, you know, just make just one more general comment, then I'm going to wrap up, Mayor. When the PSC sent representatives here to the council, I specifically asked a question, do they have the people on staff who can evaluate the various options there and analyze the cost and the feasibility and, you know, whether you can get the easements or not? And they said they absolutely did. And so, you know, I am very, very disappointed in the PSC. I feel that that's what they get paid to do, that all this testimony, all this research, all the statements that have been made to them, they have all the information there. Our council does not have access to all that information unless, you know, except for what we can take down off of the website, but we can't have hearings, probably ask all those people to come and demand that they come to the hearing. So I think we have a certain amount of limitations as to how we can make the decision. And I feel that we need to rely on the Public Service Commission to come up with that. The second thought that I had is that, you know, we're dealing with the Kentucky American Water Company. They're a local water company. They have to run, operate, build, and pay for the system. And if they screw up and they don't get adequate rate compensation because they haven't done a good job, you know, we have even the right to pull their, you know, their ticket at the end of their license agreement. And then we have the Blue Grass Water Commission, which Charlie's attended all the meetings. All the local engineers for different counties in the central Kentucky area have been involved in these analysis and review. And I just can't see, even though as a council member I haven't seen all these reports, I can't see how we could do all this work that we could get these recommendations that could be sent to the Public Service Commission. And then because a competing idea comes in, which is not documented, that we throw everything off track and delay, and delay does cost money. I don't know how much money, but it's going to cost us. And ultimately that means that people paying for the water are going to pay for it. And then I think as a last comment I would like to make was an old saying that if you have to have the answer to every question before you make a decision, then nothing will ever get done. And that's what has happened here as far as I'm concerned. Thank you. Council Member Ling, there's one... Pardon me. There is one issue that some of your comments raised in my mind that I think will be important for us to wrestle with either now or on Thursday. And that is what specifically are the issues, costs, and schedules involved for the options? Because if we're going to ask the PSC to extend its briefing deadline, we better give them some real clear idea about what specific information we are looking for. Some general statement based upon my experience practicing there is not going to be adequate to get that job done. On the other hand, if we have some specific ideas about what facts we think we need to develop that weren't developed during the course of the hearing, that would be helpful. So I just throw that point out for consideration as we go forward. Vice Mayor Gray. Thank you, Mayor. Forgive me, you all, for asking for the microphone twice. I try not to do that or abuse that privilege. But if this were a health care issue, I would say that I know that there are enough docs and nurses and those around this table that would probably find it compelling to stay in the conversation. And that's my situation when we're dealing with a construction project. And frankly, the question of construction costs, I'd just like to address that for a second. If we're talking about continuing to walk the path with the PSC for the next 45 days or so, during which time they're going to vet these issues thoroughly, I'd be willing to put my hat on the line that the contractors will sign that contract, that $160 million contract altogether in 45 days just as well as they would today. And I'm a little bit more, so another point I'd like to make is that I'm a little bit more forgiving of the Louisville Water Company for these reasons. And I understand the frustration. I thoroughly respect what you all are saying about that. I felt it and sensed it myself. A little bit more forgiving, David, than perhaps you are, too, and Charlie, for this reason. I feel like that they perhaps in just common vernacular have sort of just gotten their juices up and recognize that they've got a 100 percent, from what I understand, they've got two times the capacity today that they need. In other words, their demand is about 100 million and change gallons per day and they've got a capacity of more than 200 million gallons per day. So they're trying to put their prices, they're trying to keep their prices down just like we are. And how do they do that? They're going to have to sell it somewhere else. They've got that excess production capacity. And we're a likely candidate. So is Franklin County. So is Shelby County. So I think that's why they're here. And that they're here at the 11th hour doesn't bother me so much, especially if they've got an attractive price. I am absolutely willing to keep the door open for a little while if they've got a very compelling offer. Now, what's a very compelling offer? If it's 10 or 15 percent premium or delta between what Kentucky American's offering, I don't consider that worth the calories of a year or two years, perhaps extension. But if it's as much as 100 percent, if Kentucky American can get over the river for less than $80 million, and now they're already coming to Franklin County, so every time they move a foot toward our direction, that incremental cost is reduced. As they come here, the cost is reducing. And so what I'm – not my sense is that we walk the path with the PSC where they have said to us, we want you to keep looking at this in an unprecedented way, and Louisville keeps saying, hey, we still want to stay in the game. I'm not so concerned about that as I am that we might look over our backs and say, well, we're paying $160 million for what we could arguably perhaps purchase and acquire for $80 million. Now, that – I'm almost complete except for I recognize what Scott Rubin – I have to acknowledge that Scott has done a present value analysis that is a black box to me. I really can't, I have trouble understanding how he is going from an $88 million capital project, hypothetical capital project with Louisville, and comparing that with a $160 million capital project for Kentucky American, and maybe, David, you can help us here. And how, with those different, those variables, that we're coming up with an even present value. I can explain it generally, that's probably the best I can do. Yeah, I want to tell you, and I don't even know if I want to go there with that question, because. Well, no, the driving factor on the Louisville proposal is the wholesale price of water, which they represented at the hearing was $1.71 fixed in cost for, I guess, a number of years. Now, I think based upon what we heard, in order to do an analysis where it was actually exactly equal to the needs of Kentucky American Water Company, that may not be $1.71 anymore. I would assume that's the best case, I would suspect it would be slightly higher in order to address this need to actually reserve the appropriate amount of water, alright? But when you look at the net present value, there's two general factors we're looking at. One is the capital cost. The other is the operating cost. It costs very, very little for Kentucky American to operate another plant. They would hire two or three additional employees. There would be some chemical costs, that kind of stuff. That would be it. On the Louisville proposal, what happens is, if it's a take or pay, you pay for the same amount of water the entire time, whether you use it or not. So if the need is 25 million gallons a day, and that's what you need to reserve, you pay for that amount the entire time, whether you use it or not. So you would pay $1.71 times the 25 million gallons a day. Now Scott Rubin didn't even get into that. Scott Rubin assumed that it wouldn't be a 25 million gallon a day take or pay. He assumed that you would incrementally pay for the water, and his increments on one of his analysis were, I guess he didn't do increments on one, he did a flat rate proposal. On the other one, he assumed that every year, there would be a need for the Kentucky American customers to consume an additional, I think it was half a million gallons a year, or a day per year, that kind of thing. So he did an incremental one. So his suggestion was, and this is supported by anybody that's testified in this, Scott Rubin, Louisville Water Company, Kentucky American. The driving cost of the Kentucky American proposal is the cost of getting it built. The driving cost of the Louisville proposal is how much you pay them to basically buy the water. And that's why when you look at the net present value, and if you try to do a comparison with the two proposals, if you do the comparison at the same water levels, the same reserve capacity, the Louisville one actually, and they didn't admit this because they hadn't done the numbers, but the Louisville expert admitted that if you had to reserve that 25 million gallons a day up front and pay for it, their cost was going to go way up on their own analysis. But he had not done that. He had assumed they only needed to provide six million gallons a day up front, and then under one analysis a flat one, and under another one a slight incremental one. So my concern about hearing all this is, if the desire is to have Louisville come back cheaper, it's fairly clear that cost is really not the drive. These two proposals are very close in cost. You can argue that maybe one of them is going to be 5 or 10 percent less than the other one depending on what happens. But there's no getting around how much you have to pay generally for the wholesale rate if that's how much water you need. So it's really not driven by cost at this point in time, at least in my opinion. And I think if you look at the testimony, cost is really not the driving factor to the Attorney General's Office at this point in time. It's something that needs to be looked at, and it was good to have a comparison from Louisville Water Company to compare it to. But that is no longer what's driving this issue. What the Commission seemed to say was maybe because you're sinking all of this capital into this project, if you could obtain the financing with a cheaper method, urban county government working with Kentucky American Water Company, that may be a cheaper way of accomplishing the end result project. The problem that we potentially have with that is it takes two players to do that, and Kentucky American has expressed absolutely no desire to want to enter into an arrangement where they would not be the substantial majority owner. So you know... Well, yeah, yeah. And I hear what you're saying. And you have said that cost was not a driver, but that financing is a driver. I mean, it's hard for me to understand an equation where financing is a driver at between four and eight percent, and cost and capital, your original capital investment is not. That one's where I fall off that line. My interpretation of the order is not go back and look at the Louisville stuff again. My interpretation of the order is you may want to pursue a potential cheaper financing operation with Kentucky American, because you all, if you're able to utilize the best bonding that you all could use, you could go out and do it more cheaply, potentially, than what Kentucky American do. But that's all I read into the order. I don't read into they have a desire... Their confusion in my mind, if anything, on a substantive issue was, did you water company ever go to the urban county government and see whether you could obtain some assistance with financing that might make your overall cost project, the $160 million of construction, cheaper? And I think that's really what they, to the extent they've directed any, you know, our responses to that stuff is, we haven't done that. We haven't had a discussion with them about a public-private ownership. And I suppose what you all are suggesting by this resolution, potentially, is that something that you all may want to explore, if that's what you all decide to do in the resolution. But once again, the overall concern with that is, I'm not aware short of the PSC ordering them to do so, the Kentucky American Water Company is not obligated to enter into any kind of public-private partnership with us. And they've expressed so far a desire at every opportunity with the Blue Grass Water Supply Commission not to do so, unless they're owning 80% of it. And my response to that would be that I suppose that when the costs are reasonable, then no, that shouldn't be imposed on anyone. When the costs aren't reasonable, we've got questions. Council Member Gordon. Thank you, Mayor. I have four quick final questions, David. When Council Member Myers asked his, I think your questions were addressing the right-of-way, some of them, were your answers were from the testimony before the PSC? Is that correct? It's my recollection. What happened was there was evidence in the record that they had made a contact, and the initial feedback was they were likely to look at it in the same way it had been looked at historically. There was an introduction into evidence of the actual policy that is utilized in analyzing this. And it runs to the exception, you need to have an exception that meets these criteria rather than it being a rule of thumb where you could count on being able to do this. And then Heitzman was specifically asked about this, I believe by multiple parties, including possibly the commissioners, to get a feel for, you know, what have they really told you on this stuff. And he was, I would say he was optimistic about it under the circumstances. But at the same time, once again, I think if you asked them about it, they would say our project is not predicated on being in that right-of-way. Our project is predicated upon being in the vicinity of those easements and rights of way. Right. And have you talked to them since they've actually had their meeting with the Department of Transportation? No. Well, I'm not aware of whether they had any meetings post the meeting that took place prior to the hearing. My recollection is to the extent there was, in the record of the case, a meeting with those people, it took place in the September-October timeframe of 2007. If you are aware of a meeting that took place after the November hearing date, I'm not aware of that taking place. I believe they actually met last week. And then back to Councilmember Lane's questions about increased cost with delay, does that I would presume that applies to any delay. Well, in the amount of time I'm asking is, I'm not one of the things that we've all read in the paper is the opposition to the route for the Pool 3 option. And so if there were to be a year delay on that, would this same principle of increased costs apply? Just from your, I know this is your opinion, but. That's an open-ended question because I really think it depends on the circumstances. I think on some level you're locked in as a bidder, as the responding bidder on your prices for some period of time. I don't know what the exact periods of time would be for this. I do think they probably build in some timeframe like that. Where you would get into potentially being a significant cost differential driver would be, I believe that in the actual project timeline, they have built in a 20-month window to anticipate things like having to go through a condemnation proceeding. So if you were in a protracted litigation involving condemnation beyond that 20-month window, you would potentially at that point in time probably get into issues where it ended up costing more money than what they're suggesting it costs today. Okay. What are your answers to Appendix B questions going to be tomorrow? Are they all no? The general response is no. I mean, as far as. To everyone. Well, I have a, there would be some general legal objections related to the scope of what they're asking for because I really don't think they're asking for the condemnation type stuff. I mean, obviously there was quite a bit of discussion and back and forth back when we were in the process of attempting to condemn them. I don't, I haven't looked at any of that stuff. I don't think it's relevant. We will be making an objection to the production of those types of documents. The focus of the document production has been, frankly, post-November of 2006 election. I have a handful of responsive documents that we're going to make available where either Paul Schoeniger or maybe one of you all was contacted by Kentucky American or they contacted you all pretty much in the context of discussing either this case or the Louisville Water Company proposal. I think those documents probably total less than like 50 pages of documents. But the general response is we haven't had, I mean, it was pretty simple to answer. We haven't had those things taking place. And my last question is here at 630 on the 8th, what do you intend to put in your brief? At the current point in time, the position would be much what the mayor had kind of laid out to you all. Our position at this point in time would likely end up being that it's the commission's, here's what the facts are shaping up as, but it's ultimately the commission's decision to make on whether or not they should approve this or not. I believe that we will be adopting the recommendations of Scott Rubin with respect to, regardless of any project, putting a cost cap on it so that you have some certainty as a consumer that it's not going to exceed a certain threshold and that they take conservation measures and do more timely studies about their future water needs. So the general gist of it, however, once again would be that we don't necessarily have a specific recommendation as to the project. So it would be neutral? That's correct. So will council members have an opportunity to see that brief? And if we disagree with the brief, issue a minority report or something such as that? I mean, I don't know the process. Is that, or is this a brief simply from the administration and not the council? Well, I think the overall idea of having this presentation was to try to get you all's input into how we would ultimately formulate our position. Okay. I have no, I guess my concern is I don't know how I can weigh input if it's from potentially 15 different people with potentially 15 different positions on what the brief should or shouldn't say about certain things. I guess that's kind of maybe the point of the resolution. I mean, that's my fear is if I do that, if I send a draft, a working draft out now, I'm in kind of a box on how I gauge what you all are telling me to input into the thing. So if... I don't know what would have happened is potentially we would have gotten into a closed session on some of this stuff and had a more deliberate discussion about it. So there really isn't an avenue as far as you know. I'm just kind of asking procedurally. You all, as you're aware, and I don't know, I guess I don't have an answer for the minority part, Linda. The record in the case is open until next Wednesday, unless that changes. And you all are free individually, collectively to provide the Public Service Commission whatever further information you all would like to provide. Okay. I appreciate your answers. Thank you. Most of my questions have been answered. I'm just glad we were able to have a public discussion. Pardon me? I say most of my questions have been answered, but I'm glad that we were able to have a public discussion. Okay. Council Member Blevins. Thank you, Mayor. I'll be brief as well. I wanted to disagree with you, Dave. I think the purpose of my comments earlier about the $1.71 is that I believe the reserved capacity is represented in their $1.71. And I retain the hope, well, no, I don't know, I don't think I'm going to say it that way. I think it's still possible, barring other information, that they might be able to lower their rate if they reconsider the fact that we would be willing to enter into some sort of agreement that would take care of them. I don't know that either way. That's the one question that tips the balance for me. If they can lower the rate, then I'm like the Vice Mayor, it's worth talking about. If that's where they are today, then a plus or minus 10 percent, we're done and moving on with the Kentucky American proposal. That's where I stand. If I decide to vote for this extension, I want to make it clear, this will be absolutely the last chance. Because they've had, I don't know, six I make now. Thanks, Mayor. Council Member Stennett. Thank you, Mayor. You know, it's clearly we're not going to be able to make a concise decision today on whichever way is better, whichever route we want to go as a council. And you know, in the spirit of some frustration, as Council Member Blevins alluded to earlier, you know, it would be very nice to have a council that stands together and unanimous on anything we send to the PSC. And given the current state and how the current resolution is written, I can't support it. But, you know, there are just so many questions out there that I have for both Kentucky American and Louisville Water Company. And it's amazing how, you know, you can go in circles on this issue, as Council Member Bearden-Acamp alluded to, because we've had so much new information just today on some of the issue that, you know, I would be more inclined that, you know, to look at every constituent and say, we've made the best decision for the City of Lexington. I don't think I can do that sitting here today at 635 on January 8th, as Council Member Gordon said. You know, I don't think I can make that decision because there is some doubt. There is some doubt that maybe there is a better proposal. Now the timeliness and different things we've talked about today, but, you know, what if it is cheaper? Or what if it is better in the long run? You know, or on that proposal, what if, you know, do we pay the same rates as Franklin County is going to pay? You know, who is going to own the pipeline? You know, there are so many things out there that haven't been answered. What route would the Louisville pipeline take? And, you know, would they have to do eminent domain to get the route they really want? Who would be the opposition to them? You know, there is opposition now to Kentucky American. I would be more inclined to enter an alternative resolution, maybe not necessarily right this moment but probably Thursday night, that would offer 30 days. As Council Member Blevins said, that's it. If Louisville doesn't make a bona fide offer or proposal to this body or to the PSC at the same time, then it's done. We endorse the Kentucky American proposal and move on. Put this thing to bed and move on. And I think we all can sit here and agree to that. And if they can come to the table in the next 30 days and give a bona fide offer, legitimate offer, and spell out exactly where they're going, what their costs are, and if they can't do it in 30 days, I know people in the construction business that do multi-million dollar deals in 30 days. They can do this deal in 30 days and show us what the costs are. And if they can do that, then let's see it. Then we can make a better decision. But right now, you know, having to make the decision tonight and today, it's very difficult to do. And I'm not exactly without 100 percent doubt that we can make it tonight. So that's what I may offer up on Thursday. Thank you. Council Member McCord. Thank you, Mayor. And I thank you, Council Member Stennett, because I do share some of your same sentiment. My question then becomes what constitutes bona fide and, you know, again, I'm watching as we just continue to extend this thing to Louisville and knowing that if the roles were reversed and this was a Kentucky American plan, they're coming to us saying, hey, give us 30 more days, 30 more days. I don't think that we would give them that same latitude. But what troubles me most is David, who has sat here and presented a phenomenal encapsulation of what's gone on over the last 22 years and answered questions in detail that all of us have and our constituents have and so forth, in detail. David probably knows more than all of us sitting up here, any one person. And it bothers me that David, who has been up there every single day for this on our behalf, number one, was sitting up there talking about this to the PSC when a letter comes from this body that he knows nothing about, then a second letter comes from this body that he knows nothing about. Secondly, he's unaware of a meeting that Louisville has with the highway department and he's unaware of a resolution that we're going to pass around here today trying to get something done. And what I find fascinating is in the spirit of, well, what's the big deal about waiting and so forth like that, how we've tried to kind of cram certain things in in the last few weeks. We've tried to overturn a 99 resolution. We've tried to get a letter in as fast as we could, even when certain council members weren't here that were supposed to sign that. We're doing all these things with utmost haste. What's another 30 days for Louisville Water? What are we trying to do? Are we trying just to give Louisville, are we trying to let them do this or are we trying to do the best thing for our people here in Lexington? And the best thing for our people at the end of the day is solving the water supply problem. Yes, Vice Mayor Gray is absolutely correct, for the right cause. And it is our job to make sure that we are doing everything that we can. But this is in the PSC and I want to make sure that I've put it into the record and that the Herald Leader back there has heard this, that at the end of the day, Kentucky American's proposal is what the PSC is voting on, not Louisville Water versus Kentucky American's proposal. We've got people confused in this community and it's partly because of how it's been put out there. And that's why I want to put it on television, that this is the issue. And if Council Member Stennett brings it forward on Thursday night, I will not be here. I'll be out of town on business and will be unable to support that. But depending upon how that looks, I would be very favorable to something like that. But at the end of the day, what I'd like to know from my Council Member colleagues who are part of this group that has brought this forward is that if the PSC decides that this is it, Kentucky American's solution is it, are we going to endorse that? Because I think, like David, when I read the order, what I saw was the PSC saying, sit down and talk to Kentucky American Water, your provider, and find a cheap way to do it or a less expensive way and partner up, not all this other stuff. But I'm just asking so that the people will know, if that's what we come back with, are we all going to endorse it? Are we going to say, yeah, let's go forward? Or are we going to keep trying to find ways to delay this and drag it out? At the end of the day, that's what we all have to sit up here and answer. Thank you, Mayor. Council Member Blain. I just had one question for Mr. Barbary. In your presentation, you made some indication that it would be difficult for the Louisville Water Company to enter into a long-term fixed rate contract for water because of disparity with other rate payers. What became apparent at the hearing was that Louisville Water Company is not currently under the jurisdiction of the Public Service Commission. I believe it was fairly clear that if they entered into a contract with Kentucky American, because Kentucky American is and because the case all holds like this, they would be subject to Public Service Commission jurisdiction, at least as to that contract. And that opens the door up, according to the questioning that was done by the Public Commission staff, to having other affected parties in Louisville, other rate payers, as well as potential Louisville Water Company, later coming back and trying to revise the terms of the contract because another rate class is unfairly being impacted by the wholesale rate that's in effect. Okay. All right. And then, just in closing, I'd like to say that I thought today was sort of a miracle day here at our council because the earlier presentation on the sanitary serve fees was excellent and your presentation was excellent, too, and I just want to thank you. I can tell you put a lot of effort into organizing the information. Thank you. Council Member Beard. Thank you, Mayor. One further question, David. And I'm not even sure if I read it in the newspaper or whether I heard it down in the concourses at the Louisville game or exactly where I heard this, but there was some question about the ability of Louisville Water Company to go any further than adjacent counties. There is a statute, KRS 96, it's like 96.625, that applies to municipally owned water companies. And on the face of the statute, it seems to indicate that there is a potential legal issue with such a company owning facilities outside of an adjacent county that it is supplying water to. So there is a legal issue, which we have been asked to brief as well as all of the other parties as part of our briefs, as to whether or not Louisville might have some legal issues with being able to provide water either as the owner or supplier or whatever it might end up being. I believe the ultimate issue on that statute is whether or not they can own a facility beyond Shelby County. That is a legal issue that Kentucky American made at the hearing on this, and I don't know that there is a clear answer to that. But certainly there is a colorable legal question as to their ultimate ability to own the facilities. Some people would speculate that that's one of the reasons that Kentucky American owned most of the pipeline when it was being suggested as an alternative back in the late 1990s. Because jurisdictionally, they don't have the same issue. So we're beating at least a half-dead horse, if there is such a thing. I guess that's all I have. I just continue to be conflicted, but I'd like to like the Louisville Water Company solution, but I don't know about dealing with a company like this that is so loosey-goosey with the way they operate that they can't get us answers from June until now. We put the word to them that we needed them to get on a fast track, and it hasn't happened. Thank you, Mayor. Council Member Stennett. Thank you, Mayor. In an effort to wrap up our discussion today, I would make a compromising motion to table this resolution tonight in an effort to have the council members who have been in contact with Louisville Water Company contact them tomorrow and ask if indeed they can have the ability to form a bona fide offer or plan for this water solution within 30 days and respond to us by Thursday night, at which time I'll untable the resolution. We can make whatever modifications to it at that time, but give them an opportunity because if they can't do that within 30 days, and obviously some of you will have a differing opinion on whatever resolution we bring forward, also given the fact that this resolution has no bearing on our briefing that we will be submitting tomorrow on Wednesday. So moved. I have a motion and second to table the resolution until Thursday. Is that accurate? The only portion of that motion that is debatable is the date, is the duration of the tabling. So if anyone wishes to speak to that very specific issue, which is to say should it be tabled until this Thursday or next Tuesday or some other time, that debate is in order. Debate on the motion itself is inappropriate now. So seeing no one indicating a desire to speak on that limited issue, those in favor of tabling the resolution until Tuesday, please indicate by voting aye electronically. Those opposed, vote nay electronically. Mayor, you did say until Thursday, correct? I'm sorry. Not Tuesday? That's right. Thursday. Thank you, sir. The tabling would be until Thursday. I apologize. If my counting is correct, the motion ‑‑ wait a minute. Hold on. It doesn't want to recognize me. Well, are you voting? Wait a minute. What happened? I love this technology. Those in favor of tabling the motion ‑‑ I'm sorry, Mayor. Could you repeat the motion? Sure. The question is, do you favor tabling the resolution until Thursday? Those in favor of tabling the resolution until Thursday, please raise your hand. Okay. Count 6, 7, 8. All right. Let's start over. If you're in favor of tabling the resolution until Thursday, please raise your hand and keep them up, please. Count 8. Those opposed? Count 5. The motion to table carries. That brings that item of business to some conclusion. For purposes of our planning, I have spoken with Commissioner Askew, and I believe it's our conclusion that we need to postpone the litigation matter until next week. Is that correct? Mayor, it might be appropriate, since Council is here, just for a couple of minutes to discuss it. I don't want to take long, and we do have something to hand out. Okay. Thank you. So, and you're contemplating doing that in closed session, correct? Yes, sir. All right. Thank you. We're now ready for Council reports. If you wish to speak, please indicate. Council Member McCord. Thank you, Council Member. Thank you, Mayor. Just real quick, I wanted to announce next Tuesday night the Windham Downs Homeowners Association Annual Meeting is at 7 p.m., and secondly, I wanted to congratulate my colleague, Council Member James, for being on the cover of Biz Lex with all the good things that she's doing along with so many others down in the 3rd Street Corridor. I'm thrilled that two people serving on Council represent the two projects that the Knight Foundation has deemed the legacy projects for the World Equestrian Games. They've put in $2 million to make sure that the 3rd Street Corridor projects in the Healthway Trail System from downtown to the horse park actually become realities, and so congratulations, Council Member James. Thank you, Mayor. Thank you very much. Council Member Blevins. Thank you, Mayor. I'd like to move approval of the Neighborhood Development Funds with the following modification that the allotment to the One World Film Festival be increased to $1,950 due to a small error, otherwise the list is as is. So moved. I have a motion and amendment, please. Okay. We have a motion to approve the NDFs as set forth by Council Member Blevins, and a second by someone, was it Council Member DeCamp? Council Member Stephens. I have two changes to make in regard to what money I put on these projects. The first is the Miss Lexington Scholarship Pageant. I didn't mean to give them $400. I'd like to reduce that. I move to reduce that to $300, and I would move that $300 to the First Bracktown Incorporated's BMW Academy. So I increase that by $300. And my condolences to all those beautiful girls, but I think I didn't intend to give them $400. Council Member Stephens, we're going to need for you to repeat that. I know you want to reduce the two items. The Miss Lexington Scholarship Pageant, reduce my contribution to that from $400 to $100, and add the $300, that's $300, and add the $300 to the First Bracktown Incorporated's BMW Academy, which is the last one on the list. Is there a second? Second. I have a second. Any discussion on that motion to amend? Seeing none. All in favor, please vote aye. Aye. Opposed, no. The amendment carries. We're now ready to discuss the approval of NDFs as amended. Any discussion? Those in favor, please vote aye. Aye. Opposed, no. The motion carries. Thank you. Any further? Council Member Blevins. Council Member Blues. Thank you, Mayor. I just want to announce that the Meadowtalk Neighborhood Association will meet tonight in seven minutes, so I encourage everybody to come out for that important meeting. I just warn you, there's no such thing as legislative immunity here, so be careful driving. I think I have an absence excuse, or at least a tardy excuse. Second, on the matter of the last vote, I thought that earlier on when we were voting electronically that the council had agreed informally that the vote would not, the tally would not be shown on screen until the vote was over. And I think that that hasn't happened, you know, of late, and I think it's probably an important thing that we do, that the vote be taken and then the tally shown on the screen. I'm not aware of that one way or the other, but as far as I'm concerned, that's something that's entirely up to the council, however you wish to proceed on that is fine. We can entertain a council rule to that effect or operate in a less formal fashion, but that's up to you all. Well, we were doing it for a while and then we sort of switched back, so I, you know, I move that, you know, that the vote not show until it's completed. And let me clarify the motion. Are you moving to establish a council rule to that effect? Yes. Okay. The motion is to establish a council rule that would preclude the display of the voting results until such time as the voting was complete. That's right. So I'll move. Is there a second? Do I hear a second? Motion then is going to die for lack of a second. So much for political power. I understand. I've been there. Anything further? Council Member Blues. No, I think not, Mayor. Council Member Stinnon. Thank you, Mayor. You know, this is not the only government body that actually reconvened today. We have some folks in Frankfurt that are back hard at work, and I guess in the spirit of keeping up with what they're trying to accomplish there in Frankfurt, Mayor, will Ned be briefing us on a weekly basis on different bills as they pertain to our city, or do you plan on having them come to us in the form of a work session, presentation? And specifically, I guess we've talked a lot about since the Oklahoma trip, the sales tax initiative and what our position is as a government on going forward with this legislative session and asking for that sales tax. Ned Sheehy is spending virtually all of his time at this point in Frankfurt, but if we can brainstorm a little bit about that, I'm sure we can find out an effective way for him to either be here occasionally or for him to provide telephonic updates or something and if you and, for that matter, anybody else who might be interested in that would just touch base with Ned, I'm sure we can make that work. Well, I assume that from time to time he may need our input in terms of resolution to help a bill or two go forward, and that's why I asked for that update. The council had a legislative committee at one point, and I don't know how active that has been lately. My impression is not especially so, and that might be a useful mechanism to engage during the course of the next 90 days in Frankfurt. So I believe that's Council Member McCord. Council Member McCord, you've just been assigned a major task, so thank you very much for the legislative committee. We need to talk about how the legislative committee can interact effectively with Ned Sheehy. So if that's a good mechanism, we'll make that work. That would be excellent. And then the sales tax issue, I know it's important for several bodies and other parts of Louisville, I know in northern Kentucky have endorsed the initiative to move forward. I understand there may be a bill coming forward. Do we plan a response from LFUCG to those efforts? We will. My understanding is the support for that is minimal right now. So it's one of those things where we'll continue to monitor it, but in all candor, I doubt it's going to necessitate a lot of attention. Well, I mean, I know we're trying to have a new spirit of regionalism, and in that spirit, I don't know what effort we've reached out to our fellow communities around us, but obviously it's very important for Lexington and those communities the ability to do so. The League of Cities has been the protagonist in all of that, and I expect that will continue to be the case as they reach out to a number of local government entities. Thank you, Mayor. Council Member McCoy. To that end, let me just invite all council members, tomorrow night there's a Welcome Back to Frankfort reception that you've been invited to, or an invitation has gone around from 5 o'clock to 7 o'clock at 229 Shelby Street in Frankfort, and it would be a very good thing for as many of us to come as possible and to interface with our folks, not only tomorrow night, but also looking at how much we can go up as a group and individually throughout this Frankfort session, and letting them know where we stand, and certainly that we're watching and that we're interested. So I'd encourage all of you all to grab this information on the way out the door. Thanks. And if any of you are planning to attend, I would encourage you to email Ned at nshehe at LFUCG.com and let him know of your plans so he can make sure we get you together with the right folks. Okay, Council Member Myers, there he is. Sorry about that. Okay, Council Member Gordon, go ahead. I'll be quick, Mayor. On our schedule that we adopted, our annual schedule, March the 14th, was listed as a retreat. Right. And do you have any, you or the Vice Mayor, have any details yet about that? Yeah, let me tell you about a conversation we had yesterday, or today, I'm kind of lost track of it, but there are a couple of real significant agenda items that need some attention. One is sort of a mid-year, mid-fiscal year review of where we are financially. And I think on Monday we will have data through December for everybody to take a look at. And we can do that in the context of the retreat, or alternatively, there is a Budget and Finance Committee meeting scheduled for Tuesday, at which time that presentation was scheduled to be made anyway. So, is that not correct, Dr. Stevens? Intergovernmental. Intergovernmental. Okay. I apologize. I apologize. Twenty-nine. Twenty-nine. Okay. All right. Well, the point is, that's scheduled to be done in a committee meeting. The other issue that I'd like to see us address, either formally in the context of a retreat, or informally, is to revisit those six pillars. And if you all are comfortable that those six things are what we need to continue to focus on this year, and we want to either formally or informally say that's where we want to go this year, then I'm not convinced we need to get together on Monday. But having said that, it's open on my schedule. If there is a sense that we need to have a material discussion about whether or not we want to keep those six things out there for the coming year, I'm perfectly willing to do that. And what you may want to do is think about this information a little bit, and let me know on Thursday. We're going to Kearney Hills. It will be 9 o'clock until about 2 in the afternoon. And if you think it's worthwhile, we can proceed. Let me put it this way. If five or more of you think it's worthwhile, I think we ought to proceed with it. If it's just one or two or something like that, then I would suggest we'll try to visit with you all individually and go from there. Does that make sense? What do you think? Well, Mayor, given that we just met back in November, I mean, I would give us a few more weeks back in the office, back in session, so to speak, before we have another retreat. So I would be more inclined to wait about 30 days. I agree. 30 days? Yeah. Yeah. You can go 60. Well, actually... 45. Less compromise. If we don't do it this time, I would suggest we wait until late in the budget process. We'll be having a lot of meetings on budget issues, and that's going to be consuming a lot of energy and time. Well, I think we made the point, though, at the first retreat that it is important for us maybe to get together in March before you start deliberating the budget, so we may give you some feedback during your deliberation. So maybe late February, even, if... Okay. We'll see if we can't schedule something in the late February, early March time frame. And so the Monday... Rebecca had it on Monday. So Monday will be canceled. I think it probably was advertised on the calendar. Okay. So you'll... And then we did have on the calendar, just FYI, the retreat on June 27th, which I would presume is after the budget is totally adopted. So that's just for future. And then my other question to council members is, and Mayor, Thursday night, the council has asked to hear from Louisville Water Company. What time do you want to hear from them? We're all brain dead. We've asked to hear from the Louisville Water Company? Thursday night. Is that... Did I misunderstand? I'm not aware of that. Well... In the whole discussion that... No. My suggestion was that, to a few of us here, that if we're going to discuss this resolution and the many unanswered questions that were about the Louisville Water Company, I think they could, if they were present, they could answer those questions better than anybody else. I mean, we can invite whoever we want to invite to come to the meeting, and if that's what you want to do. What's the sense of council, since the resolution was tabled until we've heard from Louisville, what do we want? Well, since I made the motion, I would be more inclined to either award either a letter from them, saying what their position is and their ability to give us an offer, or if you'd like to invite them, so be it. I mean, during the resolution time, they can plead their case. And just so we can anticipate the likely scenarios on Thursday, do we want to extend the invitation to any other parties to the proceeding, or all the parties in the proceeding? Or if they come to a public meeting, do we wish to allow them to speak? I wouldn't exclude anybody, if somebody wants to come. I think our particular interest is in vetting, to our satisfaction, the Louisville Water Company, the extent to which it is a bona fide offer, or they're emerging with something that is close to bona fide, before we pass a resolution, and that's my understanding of why they would come. All right. Mayor, my understanding of the motion was that we were tabling this to find out, someone was going to call Louisville Water to find out if they could, in fact, put together a bona fide presentation in the next 30 days. We don't need Louisville Water to come in here and discuss anything. They need to tell us whether or not, within the next 30 days, they can put together a bona fide plan. That's what the motion was. So you just want a yes or a no? That's what the motion was. It seemed to me, when we were talking about the motion, however, a lot of questions were directed towards that. I'm sorry, I can't hear you, Dr. Stevens. It seemed to me, when we were talking about the motions, a lot of the questions were related to Louisville Water Company, which nobody here can really answer. And that's why I thought that maybe having them present here. The purpose of the resolution originally was just to keep the door open and to respond in part to the PSC to let them know that we heard their call, and we would like to help them respond in any way we can. Well, I think since we voted on the motion, we need to stick to what we voted on. And what we voted on was that someone would contact them and ask them if, within the next 30 days, they could put together a viable plan. That's what we voted on. Councilmember Stanton, let me ask you a quick question, since you're the one that made the motion. Again, I get back to the word bona fide or the words bona fide. And I can see how this could potentially go, where, well, sure, they did a great job. And some of us saying, well, I don't know if they did or not. And we're back to where we started again. At the end of the day, when you make this motion, what do you see, as far as defining bona fide, defining what you want in your hands to satisfy you with regard to the motion you made? Well, in regards to the motion, the motion is the table. It's nothing else. That's the official motion. Right. But what went along with it was some pretext that said that we'd like to have a response. Do they have the ability to come up with an offer within 30 days, yes or no? That simple. I don't need a presentation of what they think they can do or not do. I just want to know if they can come up with a presentation. And then at the end of it, let's say that we vote that direction and they say yes, then in your mind, what is the next step? Is that presentation, is that what we are sending to the PSC that says they're going to present to you their bona fide plan in 30 days? And if it doesn't pass the smell test or whatever, that we as a council are going to support the Kentucky American plan? No, I think what we'd be saying is there's a resolution that we would send to the PSC we've asked for a 30 day extension in an effort to give Louisville time to present a bona fide offer both to this council and to the PSC during their deliberations. And they can do, we can do what we want in 30 days going after that. Okay, let's, just so we don't run into some kind of snafu on Thursday, is that something the council administrator's office is supposed to undertake or we're supposed to undertake? I think it's appropriate for the council administrator's office. Okay. Well, that's what we're trying to figure out. I'll let you all work that out. Okay, Council Member Myers. Thank you, Mayor. Could I have Commissioner Cole come up just for a second? I've got an issue that's come up with a building project and it's going to require a change order and we have the funding in a line item for that park, but it's tied up until after the reappropriations take place. So the issue is that we received $750,000 from the state. We have until June to spend that money or it goes back to the state. And the contractor is not necessarily willing to continue construction without something from this body saying that they're going to honor the change order. So I've asked the commissioner to come up to kind of speak to, you know, where we're at with regards to the reappropriation, particularly in light of the January 7th letter that we received and it's got, the subject line is 2007-2008 closing dates and guidelines. And for April 11th it says specifications for bids, quotes, and RFPs must be submitted by April 11th, 2008 for funds to be encumbered in projects underway prior to the end of year. So I've got to get this change order before the council, but the funding to take care of the change order is already line itemed, but it's sitting waiting to be reappropriated. So I'm not really sure what the best plan of action is, but that's my dilemma. Okay, the problem with all the reappropriations, of course, is where we are with closing the fiscal year for FY07. What you read from is our closing schedule for FY08 and one of the reasons that we did that closing schedule, we backed everything up so that we don't get ourselves in this kind of situation again next year. So let me first of all say that we're doing a lot of things proactively to try to make this situation better in the long haul, but where we are for right now is that I cannot tell you what our year end balance is at year end of June 30th, 2007 with any degree of certainty until we finish the project that we've undertaken on the revenue side and working through all the data issues that we have in STARS. The reappropriations in the past have been done from that money that was in excess of the carry forward that was budgeted. I don't know if there is any excess. Now, any excess in carry forward, I have good reason to believe that we are just very, very close right on the 13-5 or 13-8, whichever it was that we budgeted. I can't say that there's any money beyond that. What we have here though is we have the reappropriations and again, we're going to be working through with you all, John Cubine and I have been working on the ordinance that we'll be bringing to you for the budget for the next time so that we don't run into these kinds of things. We have reappropriations, we have the issues that have been brought to you that you indicated that you might want to spend some additional money on in the current year that aren't funded. There's the animal control officers. There was some indication to the county attorney that you might want to try to help meet some of his needs. We're keeping a list of the kinds of things that you've indicated that you might want to do in 2008 if we find that there's some money that has not yet been budgeted. What John Cubine and I are also working to do is to identify any areas in the 2008 budget where we think there's money budgeted in 2008 that potentially is not going to be spent that we could go ahead and move. But what I can't bring all that forward until I know how much the balance is for FY2007 and then the council is going to need to act on what are the priorities for spending on any of this identified revenue that's not going to be spent or any excess. So I understand Council Member Myers' problem. I don't have the ability to fix it. Council Member McCord. This was, I'm familiar with this set of monies. Council Member Myers went out and Senator Kerr helped secure three-quarters of a million dollars to build this park. And the way this, where we've been in the past, what's really frustrating is that council members go out and through other ways find monies through federal, state governments to do projects that there's no money for locally and this is a prime example of that. And you know, this is not reappropriated money so much as this was outside money that we brought in for a very specific purpose and so forth. I guess my question is, can we in this case, can I in this case make a motion and just, let's just do this and get this thing done because of the contract, the time frames? Okay, this is not the state money that was coming to the project. We're talking about local money that's needed and the reason it's not there is because it wasn't encumbered at the end. We didn't have a purchase order. We didn't have a, evidently didn't have a vendor. So it wasn't encumbered at the end of 07. I think we're in the same situation we were in earlier this evening in that I don't know how you can offer a budget amendment, what it would take right now is a budget amendment to do this unless you can tell me where the money's coming from. If I could, if I could jump in here, one of the problems here is that we received this money from the state and in October of last year, not October 07, October of 08, I said to, I'm sorry, 06, of 06, got together, we put this committee together to look at this building and look at this project and how we were going to spend that money. And it took from October of 06 to August of 07 before the construction documents and everything were put together to put this thing out. That's why the money wasn't encumbered. This project should have been constructed last May. It should have been done last May. I agree with you 100% and this is kind of. I understand it's not your fault, okay, I understand that, but my dilemma is that if this project's not completed in June, the state will take back the money that's not spent. That cannot happen. So I don't know what exactly the solution is, but that cannot happen. Let's look at it from another angle. You say the state will take the money back. Is that the result of some federal law or state law obligation or is that just a matter of policy that might be subject to change? It's actually a matter of state law because this was actually, it wasn't grant money, it was a line item put into the budget bill. And this is one of the things that we're actually working on in our government is when we have money that goes out, say to an outside agency, and they don't spend it, we're actually looking at right now putting language in so that we can recapture that money while the state has that language in place. And so they made it clear to us in the beginning that when that deadline rolled around and the money can't be encumbered, it has to be spent, the project has to be completed. And so, you know, we're approaching that deadline. Plus the contractor, I don't know that the contractor is going to continue to work on this project without guaranteeing that he's going to get paid for that change order. My plan, as the mayor stated earlier, is to bring to the Budget Finance Committee on the 29th, I believe it is. We expect to have the year-end balance for FY2007 on that day. We could that next Thursday, I suppose, bring to you a plan for what that money is and other money that we might have identified that might not be spent in government and resolve it that would be by then February 7th. Let me suggest this or see if we can do this. The change order is about $75,000, I don't know the exact total. Is it possible to do a budget amendment from fund balance for this $75,000 so that we don't lose the 750? There is no fund balance, I'm sorry. What's the whole issue here? Budgeted fund balance, I think is what he means. We have a budgeted fund balance of $300,000, $400,000. Well, you used to, but you've already done budget amendments that put that down. I'm pretty sure right now it might be, I'm pretty sure it's under $100,000 right now. There could be $75,000 there. I can let you know that first thing in the morning. I would suggest you all check that because I think it's higher than, I don't think we've spent very much of it, Keena. Maybe I'm wrong, but I don't remember that. I know that we actually started to send a couple more through and then just completely cut those off too. So there could be current, you're right, current year fund balance. So what do we recommend, that we just find that out, that number out, and then, okay. Thank you. Thank you very much. And that ends our report. Thank you. Thanks. That's the last council report I have. It brings us down to the mayor's report. There's one change to the report that circulated previously that I ought to make. It's come to our attention that there is an ordinance which precludes people from serving more than two consecutive terms on boards and commissions in the absence of an ordinance to the contrary. And the proposed appointment of Dorotha Oates to the Arboretum Board would create a problem under that ordinance. I'd like to withdraw that portion of the mayor's report but request that the balance of it be approved. I move approval of your report with the exception of Dorotha Oates. All right. I have a motion from Dr. Stephens and a second from Council Member McCord to approve the mayor's report with the exception of the recommendation relative to the Arboretum Committee. Any discussion? Those in favor, please vote aye. Aye. Opposed, no. Motion carries unanimously. Mayor, over here. Andrea. Sorry. Can I ask you a question? I could hear you someplace. Can you repeat to me what you said about the terms? My understanding is that several years ago there was an ordinance approved by the council that precludes people from serving more than two consecutive terms on boards and commissions. There may be other issues relative to that ordinance that we're going to have to sort through but it's just recently come, actually since the mayor's report was tendered, it's just come to our attention. So, didn't want to exacerbate the problem by approving one we knew was not in conformity with the ordinance and we'll try to take a look at that and may circle back around with you with some other suggested ways to address that whole situation. Okay. Thank you. Mm-hmm. Anything further? All right. That's all I have on the mayor's report. That brings us down to public comment on any issues that are not on the agenda. There were several people who had signed up but I can understand why they would no longer be with us given the hour. Is there anyone who wishes to speak to the council? All right. Seeing none, it's the last item I have on the agenda. Would you entertain a motion to adjourn? Pardon me. Pardon me. You're right. You're right. I had it on my mind we were not going to be doing that. So, Council Member Blevins. Thank you, Mayor. I move to go into closed session pursuant to KRS 61.810 subsection 1C for the purpose of discussing a pending litigation matter. Second. I have a motion and second to go into closed session to discuss pending litigation. Any discussion? All those in favor, please vote aye. Aye. Opposed, no. Motion carries unanimously. And we'll recess long enough to vacate the room. More of an educational piece and here's what you can do because I think it's up to this body and the administration to come up with what we're going to do. And I think we need to do something. I think at our next meeting, whether it be next month or when the administration is ready to come back to us within a timely manner, of course, and give us some feedback on what recommendations we're going to proceed with and what other things are out there, I would have a different or a new presentation to give to this body as well during that time. But I think, you know, given rights to people that I don't even have rights to, I can't even go get a driver's license without showing ID. I think that's a very dangerous line to cross over. As Council Member Beard said, we've got to draw the line somewhere and I think we have laws on the books that are fair to both sides of the issue and I think we have processes in place that are fair. I just think that there are a couple of other things this local government can do and I look forward to that day of discussing those things, but I think some of these things are