# Council Work Session - January 15, 2008 > Auto-transcribed civic record · Council · January 15, 2008 - **Permalink**: https://meetings.lexingtonky.news/meeting/322 - **Source video**: https://lfucg.granicus.com/player/clip/322?view_id=14&redirect=true - **Date**: 2008-01-15 - **Body**: Council - **Last revised**: March 1, 2026 - **Length**: 34,176 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Lexington-Fayette Urban County Council convened on January 15, 2008, at 3:00 PM with Mayor Newberry presiding over the session. The council addressed two primary agenda items during the meeting, focusing on municipal utility matters and infrastructure planning. The meeting featured a first reading of a sanitary sewer fee proposal, marking the initial step in the legislative process for potential changes to the city's sewer fee structure. Additionally, the council received an informational presentation from Louisville Water Company, providing members with updates and insights relevant to regional water service coordination. Throughout the session, the council conducted three formal votes on various matters before them. One member of the public participated in the meeting's public comment period, exercising their opportunity to address the council directly on matters of community concern. The meeting represented routine municipal governance, with the council advancing legislative items through the required procedural steps while staying informed on regional utility partnerships and infrastructure considerations. ## Attendance The City Council meeting on January 15, 2008, had strong attendance with 16 members present and one absence. **Present:** • Mayor Newberry • CM Blues • CM Blevins • CM James • CM Lane • CM Stevens • CM Ellinger • CM DeCamp • CM McChord • CM Gorton • CM Stinnett • CM Beard • CM Myers • CM Gordon • CM Crosby • CM Gray **Absent:** • CM Moloney No council members arrived late to the meeting. With 16 of 17 council members in attendance, the meeting had a quorum to conduct official city business. ## Votes and Decisions The Council took three formal votes during the January 15, 2008 meeting. **Amendment to January 8th Meeting Summary** [timestamp: 00:05] CM Gorton motioned to amend the January 8th summary to show the vote was 9-4 on item #8 under requested rezonings, seconded by CM James. The motion passed unanimously. **New Business Items Approval** [timestamp: 00:45] CM DeCamp motioned to approve new business items A-G, as amended, with CM Gorton providing the second. The motion passed unanimously. **Ordinance Scheduling** [timestamp: 02:30] CM Blevins motioned to place the ordinance on the docket for January 24th and have a public meeting, seconded by CM Gordon. The motion passed by roll call vote. All three motions were approved, with the first two receiving unanimous consent and the third passing by roll call vote. The specific vote tallies and individual council member positions were not recorded in the available meeting data for any of the votes. ## Budget and Financial Actions The Council approved one financial contract during the January 15, 2008 meeting. **Resolution 025-08** authorized a contract with Zambelli Fireworks Manufacturing Corporation for fireworks exhibitions on July 4, 2008 and July 4, 2009. The two-year agreement totals $35,000 for both Independence Day celebrations. The contract covers the provision and display of fireworks for the city's annual Fourth of July festivities over the next two years, providing continuity for the community's Independence Day celebrations. ## Public Comment [timestamp: 02:00] The public comment period for the January 15, 2008 Council meeting focused on the proposed sanitary sewer fee increase. Several council members and city officials participated in discussions regarding this proposal. The primary topic of concern was the proposed increase to sanitary sewer fees, with participants raising questions about the timing and implementation of the fee adjustment. Discussion centered on ensuring adequate public input and consideration of the proposal's impact on residents. Council members and officials expressed concerns about the process for gathering public feedback on the sanitary sewer fee proposal and whether sufficient opportunity had been provided for community input before moving forward with the increase. *Note: The meeting records indicate discussion of the sanitary sewer fee proposal during this portion of the meeting, though specific individual speaker names were not clearly identified in the available documentation.* ## Appointments The Council made one appointment during the January 15, 2008 meeting: • **Peggy Henson** was appointed as 11th District Council Member This appointment filled the vacant position for the 11th District representation on the Council. ## Contested Items The January 15, 2008 Council meeting featured one significant contested item that generated substantial debate among council members. **Sanitary Sewer Fee Increase** The proposed increase to sanitary sewer fees sparked a heated discussion during the meeting. Council members engaged in a lengthy debate that centered on three primary concerns: the timing of the proposed increase, the adequacy of public input on the matter, and the potential financial impact the fee increase would have on residents. The disagreement among council members focused on whether the timing was appropriate for implementing such an increase and whether sufficient opportunity had been provided for public comment and input. Additionally, council members expressed differing views on how the fee increase would affect residents financially, with some members raising concerns about the burden this would place on the community. The discussion was characterized as both lengthy and heated, indicating significant division among council members on how to proceed with the sewer fee proposal. The debate highlighted the council's struggle to balance municipal infrastructure funding needs with the financial impact on residents. The extracted data does not specify which individual council members took particular positions in the debate, nor does it indicate the final outcome or resolution of the contested item. The discussion appears to have been a substantive policy debate that consumed considerable meeting time and reflected genuine disagreement among the governing body about this municipal fee increase. ## Sanitary Sewer Fee Proposal [timestamp: 01:30] The Council conducted the first reading of an ordinance proposing increases to sanitary sewer fees to fund necessary infrastructure improvements. The proposal outlines a phased increase structure implemented over several years. Council Member Blevins, Council Member Ellinger, and Council Member James participated in the discussion of this fee proposal. The speakers addressed the need for infrastructure improvements and the proposed timeline for implementing the fee increases. The ordinance received its first reading during this meeting, which is the initial step in the legislative process for fee adjustments. As a first reading, no final action was taken on the proposal, allowing time for further review and public input before subsequent readings. The phased approach to the fee increases is designed to spread the financial impact over multiple years rather than implementing a single large increase. This structure aims to balance the need for infrastructure funding with considerations for ratepayers. The proposal will require additional readings and Council approval before any fee changes take effect. The first reading establishes the formal introduction of the ordinance into the legislative process. ## Louisville Water Company Presentation [timestamp: 03:00] Representatives from the Louisville Water Company presented their proposal for a pipeline project to supply water to Central Kentucky during the January 15, 2008 Council meeting. The presentation was delivered by key speakers Greg Heisman and Vince Gunther from the water company. The Louisville Water Company officials outlined their comprehensive plan for extending water service beyond their current service area into Central Kentucky communities. The presentation covered several critical aspects of the proposed project: • **Pipeline routes**: The representatives discussed potential pathways for the water infrastructure, examining various routing options to serve Central Kentucky effectively • **Project costs**: Financial projections and cost estimates for the pipeline construction and implementation were presented to the Council • **Partnership opportunities**: The company explored potential collaborative arrangements with local governments and other entities to facilitate the project's development The presentation was informational in nature, providing Council members with detailed information about the Louisville Water Company's expansion plans and their potential impact on regional water supply. The officials used this opportunity to explain the technical and logistical considerations involved in such a significant infrastructure undertaking. This agenda item served as an educational session for Council members, allowing them to understand the scope and implications of the proposed Central Kentucky water pipeline project. The Louisville Water Company's presentation laid the groundwork for future discussions and potential decision-making regarding regional water supply partnerships and infrastructure development. The session concluded without any formal action taken, as the primary purpose was to inform Council members about the company's proposal and gather initial feedback on the presented concepts. --- ## Decisions - **Motion** — passed (0-0): Amend the January 8th summary to show the vote was 9-4 on item #8 under requested rezonings - **Motion** — passed (0-0): Approve new business items A-G, as amended - **Motion** — passed (0-0): Place the ordinance on the docket for January 24th and have a public meeting --- ## Full transcript Oh, I would call the meeting to order, but I think we're probably missing a few people here, so we'll stand by for just a few moments and see if we get where we need to be. Looks like we do have a quorum after all. Ms. Councilmember Blevins in the back there, so we are ready to proceed. Is there anyone here that wishes to speak to any item on the agenda? Seeing none, we'll move ahead. We have no docket approval today, but we do have a summary to approve, as I recall. Councilmember Gordon. Mayor, I know we need a motion to approve, and there are some corrections in the summary, so would you like the motion first? Yes, please. Move approval. All right, and are there corrections? On Roman numeral two, requested rezonings, the first paragraph, if I understand correctly, the dilemma here is with the Granicus system and how it reflects the vote, but there were four no votes on this first rezoning. So I personally think that it should reflect that there were four no, it was not unanimous, and I know it's a system thing that we're working on, so. So I have a motion to amend item two, first paragraph, to reflect four votes in opposition. Yes, thank you. Is there a second to that amendment? Second. We have a second by Councilmember James. Any discussion on the amendment? Those in favor of the amendment, please indicate by saying aye. Aye. Opposed, no. Motion carries. We're now ready to vote on the summary as amended. Mayor, I have another amendment request. James. Under the Mayor's report, Roman numeral eight, there was a motion by Councilmember Stevens to approve the amended, but it doesn't state how amended. Does that need to be reflected in this summary? That probably wouldn't be a bad idea. As I recall, it was by deleting an appointment to the Arboretum Board involving Dorotha Oates. So I certainly have no objection to that. Thank you, Mayor. Any other amendments? Then those in favor of approving the January 8th summary with the change to the first paragraph under section two and with the change we noted on the Mayor's report, please indicate by saying aye. Aye. Opposed, no. Motion carries. We have no budget amendments, but we do have a few items of new business. Is there a motion? So moved. Second. We have a motion by Councilmember DeCamp and a second by Councilmember Gordon to approve the items of new business. Any discussion? Yes. I have a question on item C. In this regard, it relates to the function of the parking authority and enforcement of parking regulations. It limits it to on-street parking, and I didn't know if this was applied just to the downtown area or what was going on, because one of the problems we have in neighborhoods is inappropriate parking, front yards sometimes, and other places that are illegal. And I didn't know if the parking authority is going to take that chore on, too, also. I'll defer to Commissioner Coe. Thanks. We are limiting the agreement right now with the parking authority to on-street parking, and the focus is downtown, basically enforcement around the meters and that kind of thing. Certainly we can expand that at some time, but I don't think on-street parking where there aren't meters or plans for meters were ever really a consideration for the parking authority. I think when we talked about this originally, that was the idea. For example, in some of the neighborhoods around the university, parking is a continuing problem, and we were going to cite people for that and tow them away. I think at this point, as Keena said, I think we're focusing mostly on the downtown and the residential parking permit programs, which will address a lot of those university problems, because that's why a lot of those residential permit programs were set up. But there is going to be conjunctive authority between the parking authority and the police. And I think, as she said, as they get up and running and they get contracts in place, management contracts that will be working under the parking authority, I think that their activities will expand. They do have the authority to handle any kind of on-street parking situation. I think it's just going to expand as their capacity and their expertise expands. That's what we anticipate. So you say they do have the authority, but you're present, this is an agreement between the police and the parking authority? Well, they're going to be working in conjunction. In other words, if someone has a problem and they call the police, the police still have the authority to issue any kind of parking citation, do any towing of nuisance markings and anything like that. But the parking authority will also have the authority to do that. And I think there will be, as time goes on, a greater limitation of the police time having to be devoted to that. But I think we're going to have to see, you know, how, again, how the ability of the parking authority expands to take over more and more from the police. They do have that authority and will be adjusting their duties under this purchase of service agreement as their abilities increase. I understand, but how do we go about making sure that happens? I think they'll be working with the police closely, probably, on that issue. Mr. Mayor, I'd like some way to amend this so it becomes an item of business in appropriate time, like six months or so, so we can review the implementation of the parking authority. There are parking meters in other places besides downtown, too, and the residential permits are a problem. I think our intention is to come back to you with an amended purchase of service agreement at some point after we get a handle on the downtown garages and what we're going to do around that scenario. So it was always the thought that we would come back to you at some point with an amended agreement. If that's satisfactory to you, we can just hold, but because they don't have the resources right now to expand their authority, so we're really going to have to build on what they can do downtown to be able to generate some revenue to be able to give them some money to operate out in the city. So you're saying if I put a civic string around my finger, it'll come back? I'm sorry. I mean, certainly feel free to amend it any way you choose. I just wanted you to know that we did plan to come back to you with an amended agreement at some point. I would move to amend our present item C to request a report appropriately in July of this year. Second. If I understand the motion correctly, it is to amend the Purchase of Service Agreement to require the parking authority to come back to us with a report in six months? Or the administration, the Department of Finance, the law department, whoever's appropriate. But parking authority would seem to be the logical one. Okay. I think we can change our Purchase of Service Agreement to reflect a provision to the effect that the parking authority will report back to the council in six months as to the status of its enforcement actions. Does that make sense? They're already required under the Purchase of Service Agreement to submit to the Department of Finance, I believe it's quarterly, reports on all of their activities. And we can certainly indicate that with respect to the report that would be due in June, they would do a presentation to council in July with respect to that report in the earlier quarterly report, and that would give you a full picture of their activities. All right. Suits me fine. I think that works. Any further discussion on that proposed amendment? And those in favor of amending item C as we have discussed, let it be known by saying aye. Opposed, no. Motion carries. We're now back to the original motion to approve the items of new business. Is there any further discussion? Mayor. Council Member James. Yes. I have a question on item A. I was expecting a revision on this regarding the fund from which the monies would come. Does anyone have that amended? I didn't know if it was coming from Penny Ebel or if Commissioner Coe has something on that. It has to do with the funds out of the Mayor's professional services account. We may need to touch base with Ms. Ebel about that particularly. I know she contacted our office about that earlier. I did. I sent an email and was waiting on a revision and never received one. Okay. Mr. Kelly. Mr. Green advises me that that amendment has been processed and I thought you had been called to be made aware that it was in process. I apologize that that did not happen. In process, but how are we voting on the, as we vote today, are we voting as it is, as it stands, or on the amendment? I think, that's a great question. I intended to have the amendment here for you for discussion at this meeting. Mr. Green has gone to see if he can get Penny to see where that process is. If we can get it back to you before you conclude your business, then you can go ahead and take that up. If not, then we'll just hold it. Okay. Thank you, Mayor. That'll be fine. All right. Council Member Beard wishes to address an item, so let's take that up and then see where Ms. Eagle is. Okay. I didn't want to stray too far away from the parking authority and I almost stood up and waved at Commissioner Coe to not go away because I have a question for her. Sorry. That's fine. You couldn't have possibly known. My question, at the time we had discussed, I believe, the parking authority delaying taking over the parking garages, I assumed that the parking authority would not be activated at all. And it kind of seems like now with this parking meter situation that it's a tail wagging the dog as far as a revenue stream is concerned. What does this do to the pro formas that we had? Well, certainly it changes a lot because when we originally looked at the revenue for the parking authority, we were looking at revenue from the garages and we now have pulled that back or that will be coming to you in a series of budget amendments at your next meeting to pull that back into the general fund. We believe there's still a vital role that the parking authority can fill for us in that there will be a focus on on-street parking and the enforcement of the meters, particularly downtown. Before we began this whole examination of whether we needed to pull back on the garages or not, the parking authority had already hired an executive director, Gary Means is very capable and quite frankly, we need his expertise as we kind of sort through where we want to be with garage parking and on-street parking in the future. So we really see this as just kind of a stepping stone that they go ahead and take on the responsibility of on-street parking. We revisit the garages as we get the reports from the real estate firm that will be evaluating the buildings downtown. But we do have to put some people on the street, do we not? They will be contracting to put people on the street. Will there be enough revenue to cover the expense, I guess is where I'm really getting to. Well, we have always been supplementing the parking situation. I know, but we wanted to fix that. Pardon me? I said we wanted to fix that. That was the whole purpose. I understand. And we do, too. Believe me. Of everybody in here, I probably am number one for wanting to not have to support that bond issue. But we just felt like the timing, there was no reason to hold back on going ahead with on-street parking and getting some of those things in place, even though our garages are in a state of flux. I guess my concern is that at some given point, if there isn't enough adequate revenue that the people that are attending the meters and giving tickets and whatever might get overzealous to increase revenue totally out of proportion to what they might do otherwise, I guess. I don't know. I would say their marching orders are to cite any car that's in violation. I'm sure that's the case. And we hope that we get some folks' attention. Okay. Thank you very much. Anything further with regard to the items of new business? Well, since we don't. Council Member James, since we don't have. Just a moment. Mayor, the amendment was sent out yesterday down to the council office and copies are being distributed at this time. I think Ms. Langston, I understand she's had some difficulty with her hip and may not have been able to get that distributed. Do you know the contents of the memo? The amendment clarifies that the funds are coming from the special events account as opposed to the mayor's office account. That was the error. Mayor, I'm not really sure how to proceed since it is. Does someone need to make a motion to amend a new business item? Okay. And if I understand the memo correctly, correct me if I am wrong, Mr. Kelly, that rather than saying it would come out of the office of the mayor's professional services account, it should say the special events professional services account. Yes, sir. Okay. I guess I'll move to make that amendment to change the wording to funds are budgeted in the special events professional services account and are paid by sponsorship donations. Right. I have a motion by Council Member James and a second by Council Member Gordon. Any discussion? Those in favor, please vote aye. Aye. Opposed, no. Motion carries. Any further? Thank you. Can I ask Mr. Kelly a question while he's here? Can you provide, I guess by email will be fine, a balance of both of these accounts, the special events professional services account and the mayor's professional services account to council members? Yes, ma'am. Thank you. We can do that. And thank you for catching this and pointing it out to us. Sure. Thank you. I appreciate it. Thanks, Mayor. All right. Anything further with regard to the items of new business? Then those in favor of approving the items of new business as amended, please let it be known by saying aye. Aye. Opposed, no. Motion carries. That gets us down to our presentations. And the first one is from the Services Committee, Council Member Ellinger. Thank you, Mayor. We met on January 8th at 1 p.m. And we had two issues that we looked at. The first one was the noise issues. And we decided that we were going to put all of them together and have a task force. A motion by Council Member Meyers to create a task force to look at the noise issues was seconded by Council Member Blues and passed without dissent. I move that forward. So moved. Second. I have a motion to approve the Services Committee report. Any discussion? Those in favor, please vote aye. Opposed, no. Thank you. The second issue was the immigration report was brought forward by Mr. Krebs. And he talked about the issues that they dealt with. We had many questions. That is in the summary itself. And we also ask that the administration come back next meeting to give their response to the immigration report. The last item was just items in committee. And there is nothing that I need to report from that. We adjourned at 1 49. And that is the Service Committee. Thank you, Mayor. Thank you very much. Does anyone have questions concerning the Services Committee report? All right. Next presentation is one relating to downtown. And I'll recognize the Chair of the Downtown Lexington Corporation, Woodford Webb. Good afternoon, Mayor Newberry, Vice Mayor Gray, ladies and gentlemen of the Council. My name is Woodford Webb, and I'm President of the Webb Companies and also President of the Downtown Lexington Corporation. But I'm here today in my capacity as Chair Elect for 2009 of Commerce Lexington. I'm not sure if all of you know that or not, but I drew the short straw. And also, Bob Quick couldn't be here today, so a couple hours ago I received notice of my mandate here. And he's in Frankfurt dealing with some Commerce Lexington business. But I'm here to represent Commerce Lexington and to thank Harold Tate and the Downtown Development Authority, the DDA, as well as the American Institute of Architects, the AIA, for their joint efforts on behalf of the Physical Development Committee of Commerce Lexington. For the last year and a half, they've really done great work in strategic planning, arising from the chamber trip in Providence, Rhode Island in 2006, and continuing on with the Oklahoma City trip last year. And those two trips were the real drivers of this effort. And Commerce Lexington has promoted this effort as a strategic doing effort, one of Guy Hewlett's terms, but a great one at that. One of the beauties of this process was in the process. It mirrors what Mayor Newberry and the Council have asked us to do and have advocated for the last year. The group was comprised not only of Commerce Lexington members, but also members of the general community at large. It was a community-building process. And what you see and are going to see today is a picture that captures the visions of the many people in our community and not just Commerce Lexington or a specific group. So this is really just the beginning of what could happen very easily in Lexington. So once again, and on behalf of Commerce Lexington, I applaud the efforts of Harold Tate and Ron Jackson, the DDA as well as the AIA, and all of the many persons who participated in this strategic doing effort. So I want to thank everybody, and Harold especially, on behalf of Commerce Lexington. And so with that, I'm proud to present Harold Tate with what Lexington can be. So Harold. Good afternoon. As Woodford said, this really began back in Providence, Rhode Island. And I know a lot of you all attended that trip that we took through Commerce Lexington. People started to realize what cities were doing, how things were changing, how cities were adding activities that made them unique, how design was playing a role in terms of what a city could be. Oklahoma City started the process again. And the Friday morning before we left, remember we broke into a series of groups. The group that I was fortunate to work with was the Physical Development Committee. Immediately we sat down and we started working. We came back to Lexington. We made a list of items that we felt were important, what Lexington needed to address. And the enthusiasm of this committee, which was made up of people like yourself, lawyers, developers, private citizens, retired people, young college students, it was what can we do to make Lexington better. We decided to take that to another level. Last year was the American Institute of Architects 150th anniversary. And through the help of Ron Jackson, who was the chair of the local chapter, we were able to go to Bob Quick and tell him that we would like to work with Commerce Lexington to produce some type of publication that we could show to people examples of what Lexington can be. We were fortunate. We received those fundings, and we immediately started to work on a publication that we have. And that's what we're presenting to you today. It's fairly large, as you can see. It's almost like a coffee table book. But we took those issues that we've all addressed, which were a total of 13, and we've shown examples of what other cities have done and what we have talked about in the past of what Lexington can be. Everything from Vine Street to a ceremonial park to public art, things that we've all talked about that what can make Lexington a better place. So hopefully with this book, as we present it to people like you, present it to people at Commerce Lexington, present it to the citizen, they'll be able to get a visual idea of what other cities are doing, what great design and what great architecture can do to make a city an unbelievable, unforgettable city. And that's where we want to go for our next step. And through the fortunate direction from the mayor and the council, we're going in that direction now. We're underway with many studies that will help the entire community look forward to what we can do. We're seeing architecture downtown that's of today's standards, that is bringing contemporary ideas, environmental ideas, into our design and into our city to make our city that much more of a forward-thinking city. So we're presenting this to you today for your review. We have copies that anybody can contact our office or the AIA office to receive copies as well. We want to get this word out. We want to get this idea. We want to get this vision out to as many people as we can to make people realize what Lexington can be. And what I'd like to do now, Ron unfortunately had a project due today, so he was not able to attend, but we do have Dennis Bopp representing the AIA chapter who would like to come up and talk briefly just a little bit more about what we've tried to do. Thank you, and good afternoon. Ron sends his regrets. I learned about this about two hours ago myself, so I'm not terribly prepared. My name is Dennis Bopp. I'm a past president of the East Kentucky Chapter AIA. And through our years in service, we've looked for opportunities to contribute to the community. As Harold said, the AIA is celebrating its 150th year in existence, last year actually, and the theme that was created and each chapter was challenged was communities coming together around architecture. I won't go into walking you through the projects. You have a book that you can look through, and we tried to make it big enough so that you couldn't ignore it. It won't fit on a bookshelf. But I would ask you to flip back to the last two pages that are titled The AIA's Ten Principles for Livable Communities. As I've been watching the development of this administration and the development downtown, it came to me that AIA can offer some guidance and input to the thinking that goes on in our community and what we can be as a community as their ten principles. I'd direct you to item number ten specifically, which is design matters, because good design in communities is really a thing that matters greatly. It's a book of ideas. It's not a book of solutions. It's intended to generate thought, comment, debate, and further development. So I promised Harold I'd be brief. On the last page, there is a list of acknowledgments of various people that have contributed to the publication. And if you happen to know these folks and would offer a thanks to them, it helps us generate more enthusiasm for people to get involved in these kinds of things. So with that, on behalf of the East Kentucky Chapter AIA, I want to thank Commerce Lexington and LDDA for allowing us to collaborate on this, what we think is a very important initiative. And I'd also, if I may, offer special thanks to Janet Pike, Honorable AIA, and our Executive Director of the Kentucky AIA, and Mike Sparkman, our President-Elect for EKC for 2009. Thank you. Thank you very much. Any questions for Mr. Bopp or Mr. Tate or Mr. Webb? All right. Vice Mayor Cray. I suspect the Mayor will be saying the same thing, so I was just going to say thanks to everyone who contributed in this visioning effort. There's a lot of work involved in it, and I know that we all share the appreciation for that. Thank you all. He said it well, so I won't say it again. We do appreciate your coming. Thank you. I'll turn the floor over to Council Member Plevins. Thank you, Mayor. I hope to be fairly brief. As you all know, I presented last week a proposal to increase our sanitary sewer user fees to cover the projects we need to do immediately in order to bring our sewer system back into compliance in order to protect our citizens. I do that today. I feel that we need to protect our children, both now and into the future. I feel it's the right thing to do. And, in fact, we have no choice because the EPA is soon mandating us to do exactly what we have to do. For 40 years, we've not been able to solve this problem, and now the bill has come due. That bill is in the form of $130 million in projects. I want to remind the public that what I'm proposing is to fund those projects. I'm talking pipes, talking pumps, concrete. All of this proposal is going towards those projects. The ordinance that you have today before you, fellow members of the Council, reflects exactly what I presented last week. It's by and large the same thing as I shared with you on Friday with a couple of minor editing changes, mostly related to changing the names to the Department of Environmental Quality, as you'll see. You should have a copy before you right now. I want to, again, thank all my fellow Council members and the administration for their support and encouragement in bringing forward this legislation. I also want to thank the staff for outstanding work. We developed five different models, and this is the unanimous version that you're seeing before you. So as a result of all those things, I'd like to move to place on the docket an ordinance updating the sanitary sewer fee program. So moved. Second. I have a motion and second to place the ordinance on the docket. Any discussion? All right. Council Member Ellinger. There's lots of names on it. Council Member Ellinger. Thank you, Mayor. I want to preface my comments by saying that I will talk in general terms because we are restricted on what we can and can't say in relationship to the EPA because of our confidentiality requirements. I want to thank Don for all of his hard work here and his proactiveness in this difficult and painful process. I want to thank everybody else who's been involved in the EPA because it's been a long and arduous process. We all understand there will be extreme costs associated with the EPA consent agreement. However, I believe we are putting the proverbial cart before the horse. In your ordinance, we are raising the fees 48% and 35% the next two years without public input. I believe we need to wait to have the consent agreement signed, presented to the public before we start raising fees. We need to allow the public to comment. We all know that we're going to be mandated to do a lot without any funding. However, 48% and 35% are just too large of increases. We need to be more gradual in our approach. A lot of people are on fixed incomes, and this will hit them very hard. They might make tough choices between food or heat. Can we look at a more gradual increase, say 10%, 20% increases over three or four years? We all know that we are on a tipping point right now in the economy. We're on the verge of a recession. There are problems in the housing market. Oil is at near $100 a barrel. Unemployment nationwide is at over 5%. Therefore, the fiscal responsible person in me looks at what I do in my own house when I have increased costs. You look at cutting expenses and find other ways to pay for it. Have we looked at this? I don't think so. Have we made a good faith effort to do this? One theory about budgeting that I would like us to look at is zero-based budgeting. And when you look at zero-based budgeting, that's an approach that every department starts at zero, has to justify each and every dollar, instead of just adding to last year's budget. It takes more work, but it makes government more efficient and responsive to the taxpayers. And another way to raise revenues could be possibly looking at grants, similar to what we did in the PDR program. It's been successful with many different sources of revenue. Have we looked at bonding, and what can and can't we do there? When I look at new expenses in my own home, I look at ways to tighten my belt. Here it looks like all we're doing is letting the belt out just a few more notches. We all understand there's going to be a lot of pain associated with the cost of EPA. This is not something that will happen overnight. It will take many years to fix. We only are talking about sanitary sewer increases right now, but in less than two years, we're going to be looking at stormwater fees. And then in four more years, we're going to be looking at additional increases to the sanitary sewer fee. We have to look at tightening our belt before we go to the public and ask to raise taxes, because that's what a fee is. However you want to label it, it's still a tax. I believe our role in government is to provide basic services. That includes, but not limited to, first and foremost, a first-class public safety. And I believe we have it, because if you don't feel safe in your home or on the streets, then we're not doing our job. Then I think we need to provide necessary infrastructure. That would be streets and roads and what we're talking about today, sanitary and storm sewers. These are basic services. After that, then we can talk about the services we provide to the community. But we must have our priorities in government. The easiest approach in budgeting when you have a big expense, as we do from the EPA, is to just raise taxes. But we just can't keep doing this. I would challenge the administration to come back to each of us and look at different ways to pay for this. The governor is doing this in Frankfort right now as we speak. Why can't we tighten our belts instead of just letting the belt out a few more notches? Let's be fiscally responsible and be good stewards of the taxpayers' money. Therefore, I can't support this large of an increase. And, Mayor, before everybody finishes, I would like to bring a motion forward. But there are other people that want to speak. So before we finish, I would like to bring a motion forward. Thank you, Mayor. Council Member James. Thank you, Mayor. I had a question for Council Member Blevins. I know you've been talking to a lot of folks. We've been receiving a lot of e-mails. And we've heard some people say that the increase is too much. Did you have a thought process of going back and reevaluating, or is the increase that you're proposing the only option? Again, we considered five different models for funding this. I want to separate two issues because I agree in part with some of what Council Member Ellinger just said. I want to separate this. There are $130 million of known projects that need to be done today. We can argue over how to fund them, but we can't wait. These projects need to be done today. So, Council Member James, the issue became how to pay for that. We considered five different models, and this is the unanimously chosen version for funding it. It's mostly bonding. If you look on the details, there's about $95 million worth of bonds. So what we're really doing is raising the fees enough to raise the cash to pay for the studies we're going to be mandated to do and enough cash to pay the bonds that will pay for the $130 million worth of projects. Does that answer your question? It does, and just one quick follow-up. You said there's $130 million of projects that need to be done today. Did those projects need to be done yesterday, last year, 10 years ago? Okay. Absolutely. Okay. Thank you. Thank you, Mayor. Council Member McCord. Thank you, Mayor. And Council Member Blevins, as we kind of have this open discussion here, I want to go to you. First off, I want to thank you for all the work you've done on it and recognizing that, as you said the other day, that this is something that previous councils just didn't do, and we could talk all day long about it. Certain ones of us on this council that have been here for just a couple years have already seen how the way that we're structured doesn't allow, even when this body tries to put money towards something, it to get done. So there's some tremendous frustration, not only in the public. Certainly we've seen that in the e-mails and the phone calls and so forth, but frustration up here. So that the public is clear in where you're coming from in this situation. You know, I kind of view it as we need to get ready for a storm that's coming our way with regard to the EPA sanctions, and this is going to be one element that we're going to have to fix anyway as part of that. Would you mind just speaking a little bit, too? Because I'm with Council Member Ellinger in some degree that I guess where I'm coming down is, is it necessary to move right this second? Do we wait another couple weeks when we know the actual amount and so forth? And I guess what I would ask is, for those watching and for those of us that are doing that, give a little bit of the rationale of where we are today and why you feel so passionately about the motion. Sure, I'm glad to do that. The $130 million of projects we're talking about are known today. That is what is known. What is not known will become clear in approximately four years when we complete further studies and assessments of our system. So what we're doing today is taking action on the known problems, known problems that have been known in some cases for as long as I can remember having grown up here. For example, every time it rains, the South Elkhorn Pump Station overflows. That means sewage is going out right into the creek. That's not the only one. There are manhole covers that blow off on a regular basis and sewage flows right out onto the streets. The longer we wait, in my opinion, we run the risk of some child getting ill, like the story I told you last week, potentially passing away because of our inaction and our predecessor's inaction. Now, I can't defend previous councils and I won't. I can only play the hand I'm dealt. And the hand I'm dealt is that we have $130 million worth of things to fix right now. Further delay only delays the day where we remove sewage from our streets. Further delay only places in a position where we may not make it in time to avoid EPA sanctions. And God knows I don't want any of our cash going back to Washington in the form of fines. So for all those reasons, I believe we need to go ahead and act as soon as possible. Last point I'll make is although we think we're close, generally speaking, in concluding the consent decree, the fact is it could go on for some time depending on how the litigation goes. Do we really want to wait further while poop flows on our streets? I don't think so. It's certainly not on my watch. And am I correct in, as I've looked at EPA sanctions around the state, around the country, that generally speaking there's a short list, there's a list that you, I guess basically for lack of a better way of saying it, the stopwatch starts clicking the moment that consent decree is set and you only have 24 months to get them done and out the door. And we're talking about some of that here, are we not? We are indeed. In fact, that's a great point, and I'm glad you brought it up. By starting now we get ahead of the stopwatch. We're actually cheating a little bit by starting early. And the last point I'll make is for those on this body who feel strongly about we've waited too long and so forth, I would also ask you, as we discuss things later about water, to consider the fact that waiting only costs you longer and longer and longer. And I think that it's good for us to keep that in mind and for the public to keep that in mind, that we have postponed a lot of things, and this is the tough choices that we have to make, and we have a very compressed time frame to make choices in. I appreciate all your work. Thank you, Councilmember Blevins. Councilmember Beard. Actually, this is more of a procedural question. In Section 4, Councilmember Blevins, concerning the indigent grants, as I read this very quickly, it looks like we pay them at the end of the year out of an appropriation we make. Is that correct? We appropriate funds that will fund that program on a per-year basis, and then folks apply, and as they meet the needs assessment criteria, then they're eligible to get reimbursed, I believe is how that program works. Reimbursed how frequently? As often as they apply and meet the qualifications. It's on an as-needed basis. But is it an annual program? No, you'd have to apply. And they have to apply each month? Yes, in some cases. I find that a little unwieldy, I guess, is my point. Well, it's the way it works today. We've simply kept the program the way it works today and modified the language to make it a dedicated 50% discount, which is effectively what they have to do. I agree with the discount. I just am thinking that if they are indigent, they are probably not going to be able to pay the bill up front to begin with, is my point. I can't answer. Perhaps we can have social services come and speak for it, but it's my impression the program is working fine as is in terms of the frequency and so forth. It looks like we could have Dr. Helms speak to that. Good afternoon. Would you please repeat what you'd like me to address? Thank you. I think Councilmember Beard has some concerns about the way the program for the indigent is implemented. And my memory is not perfectly clear, but I believe you can apply on a monthly basis and sometimes for several months back to be reimbursed portions of the sanitary sewer fee. Is that a correct understanding? That's correct. At the present time, it's working. Obviously, if additional people need more support and more help, we'll have to look at reallocating perhaps from one portion of the budget to the other or asking for more money in that fund. But at the present time, it seems to be working fine. Well, in this date of computer capability, why couldn't we just bill them with the 50% discount already in if they've been qualified? That is certainly a possibility. So they don't have to come out of pocket and then come back and get reimbursed. That's my concern, and I didn't know exactly what the time frame was. But to have them come down here once a month seems a little unwieldy to me. Councilmember Blevins did meet with Cheryl Lewis, who is the director of adult services, and I think he was pleased with what she said as far as how the program is working up to this point. As we move forward, we certainly would be very interested and willing to look at ways to make it more accommodating to the citizens. This is a significant increase is what I'm saying. I'm trying to make it as easy upon the people who can't really easily pay for it. That was my concern. If it's working now, I guess that's okay. But if we get inundate, I guess we can always change our mind and do it another way. Sure. Thank you. You're welcome. Councilmember Gordon. Thank you, Mayor. I had a few questions. Maybe some are for Bill O'Mara and some might be for Councilmember Blevins. And maybe the legal folks can tell me about my whereas question. Bill and Councilmember Blevins, on page four of this ordinance, I guess it's a number two in parentheses toward the top half of the page. I believe this refers to industrial rates, and there's a clause in that number two paragraph about a separate meter for water that doesn't go into the sewer system. Has that only been used in industrial facilities in the past? Has it ever been a residential split? I don't know of an example of residential. It may have occurred, but I don't know about it. But these are for like chillers or water used in manufacturing. The University of Kentucky has quite a few meters where the water never goes through the sanitary sewer system, so therefore is not measured and assessed the fee. I'm trying to think of a situation where a resident would want a separate meter and the expenses associated with that separate meter, but it's something that I don't think it excludes them from doing that. There are a lot of people I notice put a lot of water on their lawns. I don't know what the cost would be for residential, but it was just a question I had. I'm not particularly advocating the separation. How was in the lower half of that page, how was the assets test determined? Is that something that's already set by law? Or this refers to people 65 or older who have a household income of $25,000 or less, and it describes what assets they can have? How was that determined? Well, if I could point out a clarification, the reference to the Schedule A rate payers, let me get reoriented. Where I'm going to is the over 65 test is only household income. The asset test refers to the other program of indigent and at need people. So the only test that the over 65 people have to qualify for is number two in this section, the income test, which is a household income of $25,000 or less. And we basically mirrored the Louisville model, and they have this in place right now. So the assets test is not for over 65. It's for indigent only? Yes, ma'am. Okay. Second program. And that was determined how? It was modeled after Louisville, did you say? The over 65 was modeled after Louisville. The indigent is what is currently being administered by adult services now. And have we had that in place many, many years or? I think at least 10. At least 10? Okay. On the next page, page five, some of the council members have already asked about the qualification and the payment for the indigent. And I guess I wondered why the part of this that does bother me is under item B1, the phrase that these payments are subject to an annual appropriation by the Urban County Council of funds to make such payments. So even if we have, I'm presuming what this means is even if we have a lot of people apply for it, if each budget year there's no funding or very little funding, that will determine whether there's actually any kind of a decrease for indigent families. That's pretty much a legal obligation because one council cannot obligate a subsequent council for spending. So we have this ordinance in place to provide this assistance, but it's up to each council to what extent they're going to fund that. So, yeah, you're exactly right. I mean, we can't write in an ordinance that this program should be funded to this level in perpetuity. So, you know, it's feasibly possible that a subsequent council could eliminate it, but as Bill O'Meara said, this program has been in place for I think in excess of ten years because before we amended it, it applied only to increases in rates in the past and funded the increases to a rate of 100 percent. We went back in this case and changed it so it applied to 50 percent of the overall bill because it was believed at this point that would give people a lot more benefit. And I think also, as you were told previously, I think there is some ability to work within the budgets that Social Services has available to try to help with the funding of this, too. But from a legal aspect, I know we put that language in long-term contracts. Obviously, it appears in ordinances because any kind of a funding situation by law, each council has to make its own decisions on that. Council Member Gordon, if I may, this amount is about $50,000 to $60,000 per year and it's really just deferred revenue and sanitary sewer fee. So we pull out $50,000 or $60,000 up front. It doesn't come out of general fund. It stays all within this structure. So I just want to add that in case it helps. Well, I agree with Council Member Beard about the monthly having to apply. I think that's really very difficult, particularly for low-income folks who may not have transportation or the wherewithal to keep applying every month for that grant. So I would hope that could be somehow done differently. Have you tried different things on that? Bill, you're getting ready to say something. I don't have experience other than fielding phone calls and referring them to adult service, but my layman's understanding is that this is to keep from having people have an immediate tragedy of having utilities turned off. So this would not be something that would be predicted into the future and I apply in January that I'm going to have problems meeting my bills in November. This would be a program that would administer at the point that the person has the difficulty in making their payments at that time. So it's more of an emergency measure, not a real true low-income help. No, it's for indigent. The Over 65 is a prospective program. I am over 65. And so I apply and show that I'm have this household income, and I'm not going to get any younger, so It's not effective It's prospective and you apply once unless your conditions change This is on an as-needed basis on facts and circumstances is my understanding That's the difference between the two programs But a person in terms of the indigent plan could apply then as long as they needed it That would be up to the program administered by adult service, and if there was money in the program Well Thank you very much. I just had a couple comments and I guess one more comment Rochelle for you and the whereas is in the Ordinance was there any consideration on the third? whereas serious maintenance needs and Capital improvements are imminent was there any thought given to? Putting in there something about I don't know how it would be phrased, but something about the requirements of the EPA once we know them because parking feeling was because we don't know them now because that's a matter there is under negotiation and I understand. I'm not involved in it, but I understand. There's a lot of confidentiality issues and such I think the decision was we just really didn't want to write something down about Anticipating something that we really look at that determination I think we felt that what we stated was generally true and supported the need here Another thing I was going to mention and Bill can correct me if I'm wrong But and I haven't worked with this a great deal, but there is a section. We didn't change So you're not seeing it in front of you that allows for averaging of usage on household residential use For billing purposes, and I think that was to allow for on a residential basis You have your lawn watering you're filling swimming pools and things like this. I'm going back to your question on the meters Mm-hmm. I think that was put in and we did not alter it. So it's not appearing in this ordinance I think that was intended on a residential basis to kind of serve the same purpose as the allowing the separate meter for the commercial users and That separate meter did only apply to the schedule B Which is the commercial users so to my knowledge anyway it was never applied to residential instead this Averaging concept helped to make sure that the residential users were only paying their fair share mm-hmm Okay, I appreciate that Councilmember Gordon, can I set something to rest first? I owned a house for 10 years that had two meters He had a five eighths inch pipe to supply the house and it had a one inch pipe to supply the lawn Irrigation system, which I never used in that whole 10 years. I don't believe in watering lawns Somewhere along the line the Lord takes care of getting it green again And then and otherwise you don't have to cut it as often which is a good thing but anyway that and that house was built in the late 50s, so I assume that there are Probably many of those residential areas that have have two meters Appreciate that councilmember Blevins. Did you? I'm going to ask about the the urgency today since we don't have a meeting Thursday night Doing this today I would think anything that we do or that is proposed We would have a public meeting we always do that with fee increases and discussion of fees and discussion of taxes and all of that, so Since we we could go ahead if and vote on putting this on the docket There is no docket for this week, so is there urgency for today No, I would be fine with doing it next Tuesday But I won't I wouldn't want to go beyond that and the reason the only reason I did it today was The way my planning was give you guys a presentation and the public last week if everybody Plenty of time to absorb what I'm proposing today's just the legalese to get the the process started I had hoped that if there were citizens that had concerns or comments or even supporters I don't see many out there yet to come in and comment today because this is a normal public hearing for us And then of course we have two more council meetings where anyone can talk as well So I felt like that was plenty of time as well as plenty of opportunity for a public comment That's that was my thoughts. I would I Personally would prefer we actually set up a special Public meeting time that's in the on a docket So that the public can come in and they know that's the time they can come in I I Don't feel as comfortable Leaving it to first reading In hopes that people would come in because some people need a little more nudge than others when they see that We've set up a special time that they can can be heard. I Did I appreciate your work on this? I I? You know one way or the other we're going to have to bite the bullet and fix these things my first year on the council 1999 Councilmember Schaefer took me to the South Elkhorn pump station to show me how it had overflowed during a heavy rain And that's going on ten years ago So I know there are things today that we do need to fix We've just got to you know figure out how and when to do it, so thanks for your work Councilmember Crosby Thank You mayor Councilmember of Blevins I to appreciate your efforts on this. Thank you very much, and I have a few questions One I'll start with you is you keep mentioning the we who looked at the five different models Can you be more specific about the we I've heard you presenting all this But who is the we that worked on this with you more specifically well there a lot of them are sitting back here the ones I think of off the top of my head is mr.. Martin mr.. Romero miss Nicholson to the back miss Co Variety of others behind the scenes I'm not even sure about who all was involved on the finance side But I know a lot of folks were involved in creating the models. They were very well fleshed out I was impressed very good good work, okay great Thank you, and then so if I could maybe have the lead from the we team Come to the podium because I have a question regarding Some financial questions, I think I think it's fair to say that who the lead is Answer your question may depend a little bit on what the question is it's a funny. I just said a financial question Regarding maybe state funding maybe mr.. O'Meara might be appropriate He's been up there, so we'll just ask him And you might have a little more history on some some of these issues in the past Councilmember Blevins mentioned that there's been a hundred and thirty million project or a hundred and thirty million dollars worth of projects that need to be done Not only today, but last year and years past Have we looked into maybe any state funding? Is there anything available that we could have gone to the state to try and get some funding? Do you know the answer that question? Okay Okay Hi, I guess when it involves operations I'm the one to ask and yes We have aggressively pursued state funding for many years some days successful and some not Typically you know what you're going to get out of Frankfurt you might get Two three four million dollars on a given year and and the needs are much greater than that But an example of funding that we have gotten recently we're currently constructing the North Elkhorn Pump station out off of Winchester Road in 1.7 million dollars of that Nearly four and a half million dollar pump station is state funds We've also applied for grants for the South Elkhorn pump station that has been mentioned before and I know it's floating around in in some type of bill in Washington Here in the last month. I guess it was the council Approved a request to the Kentucky Infrastructure Authority for funding for the Wolfrun pump station several other pump stations. I think that whole package totaled nearly 12 to 14 million dollars So yes, whenever we can find do you know which fund you've you've You've pursued with the state Typically the the money we usually get comes through KIA, and it's usually tobacco money, okay? Have you all ever looked at the state revolving fund have y'all ever? Previous administrations have at that time that they looked at the state revolving loan fund The interest rate was such as that our bond rating was more favorable And it was cheaper for us to borrow money on our own that was to use that fund But to my knowledge they have not looked at that recently okay, and then That's all thank you very much. I Just I really just want to state again. I appreciate all of councilmember Blevins work on this however I have to agree with some of councilmember Ellinger's comments I'm a little uncomfortable uncomfortable with the fact that we've only been presented with one option Here today in fact we've heard that there were five different models that have been worked on but yet We have only been shown One option I don't feel like at this time. I will support this either we haven't even find assigned the final consent degree and Again, I have said in closed session and in open session I would like to look at all options available to our government whether that is tightening our belt buckle as Councilmember Ellinger said or looking at the four other models that you came up with not just one option So with that being said I will turn it over to the mayor. Thank you Councilmember blues Thank You mayor I Do agree with councilmember Ellinger that we must necessarily have our priorities in Government and provide basic services What my concern is that? we haven't met the serious priority of our government which is to protect the public and as councilmember Blevins has some dramatically and effectively pointed out the Sanitary sewer situation is a public health issue It's one that we've neglected for four years put ourselves behind Behind the curve on this Increase the expenses That we that we now must acknowledge and and face 130 million dollars worth of projects is not going to get any less expensive as we As We delay and for all of those reasons We have to I think support this support this proposed ordinance put it on the docket I'm certainly appreciative of the desire for a public hearing on this and I Would think that we could we could schedule that in and get that input I've heard You know a few a few comments from from constituents They've all been positive and favorable of This I I think we'd hear a range of opinion and it would also give us an opportunity to You know to reflect and and also to To point out. What is our duty that we must pay for our own protection and And this is an ordinance that will finally face up to that reality. Thank you, ma'am Councilmember Stennett Thank You mayor. I first have a couple questions for make a comment For our law department for maybe for Bill Mayer and the revenue We talked about the my big concern is the for those people in Lexington over age 65 who are on a fixed income or receiving a pension Whether it be from this government or from the private sector Is our $25,000 income levels? Does that go up each year that threshold with the Social Security numbers? Is that how that? Yes, sir. That's the way we wrote it so that each year the Social Security administration comes out with a cost of living Adjustment and this 25,000 would move with that cost of living adjustment Yeah Does this mirror any of the other utilities or our citizens are having to pay like the gas bills or water bills for those type? Of aid programs or do we make that is this one just totally out there by itself a unique one to the sanitary sewer utility fee In Lexington, it's unique to the sanitary sewer fee I believe so we didn't mimic it after any other programs or anything like that not that I'm aware of Okay, thank you and Charlie we're talking a lot about about this hundred and thirty million dollar list and then a lot about the EPA Lawsuit that we're currently involved with for violations of the Clean Water Act Can you give a quick synopsis of that hundred and thirty million dollar list in terms of how long it's been out? How long we've known about these problems and what we've done to date to fix any of them? Because what I'm hearing a lot of from council members and from people in the public that this is a Some type of new idea or new fee or you know, we don't know what projects are out there Well, they've been around at least since I've been on council. I've known about them If not ten years ago as councilmember Gordon mentioned when she was elected One of the bigger problems that we hope to deal with very soon the next 12 months the South Elkhorn has been on there So, can you kind of give us a quick synopsis? Where this list came from? Well, you mentioned the the South Elkhorn and I'll also add North Elkhorn because I mentioned it earlier Those are two significant projects that go back to 1999 Most sewer utilities or the sanitary sewer utilities in, Kentucky are governed by a 20-year facilities plan That's required by by statute and that that facilities plan is approved by council and it was approved in 1999 right before I moved to Lexington those two projects were on there and here it is 2008 We still haven't built them yet, basically because we didn't fund the commitments that we made back in 1999 that totals 32 million of this 130 million just in two projects alone We could go on down the list There's significant capital improvements that need to be made at the town branch treatment plant. The last upgrade was completed in 1992 nearly 16 years ago in typically in treatment plant design you design for a 20-year 20-year design life So we've got significant improvements on there the we operate both treatment plants with one operator from 5 p.m. Until 7 a.m. Weekdays and one operator during the weekends One person at that at each one of those plants and we do that by what we call a SCADA system Which is a supervisory control system that allows them to operate a 30 million gallon a day multi-acre facility from a control panel That technology is nearly 25 years old now, and we're we're band-aiding it together to keep it up So there that's another 17 point 1 million dollars should I go on now? You know, I think you've made your point now, how have you funded the Helen? Well, first of all, how long have the South Elkhorn North Elkhorn? projects remained unfunded Well, it said since 1999 we actually started the design for the North Elkhorn project in late 2001 right so we have design done We have these projects on our list that the funds that you receive via the sanitary sewer fee now as it is Can they be used anywhere else in government? Not for anything that's not related to the sanitary sewer operation There are there are other appropriations made to other divisions such as HR engineering But all of those things are in support of the sanitary sewer operations. Thank you, sir I appreciate that information, you know In our community we recently had a couple major increases in taxes that have been a big burden on our business owners and our Residential citizens in the form of a tax for our bus system and for a tax for the schools And now this council is asking for another fee Yet another tax for our business owners are going to be hit very hard our people on fixed incomes and low incomes are going to Be hit very hard But you know, they're also hit very hard when you wake up with sewage in your basement or sewage in your living room Some of you have a very short memory dating back to September 23rd 2006 when my phone rang at 2 a.m And 99% of you were still sleeping. We were out in my district look at these basements that were flooding look at the sewage piling up in these basements and Believe me it cost those people 10 times or not a hundred times more than what we're asking for this increase to fix their problem once and for all and as Charlie said these projects have set unfunded for 10 years Stop hiding behind the EPA lawsuit. Stop using as an excuse and let's do what's right for our community once and for all Now I do agree we need to have more public education I would like to see some current numbers of what people are paying now in real dollars So people can put that in their budgets and see what real impact it is So they can do that And also I would like to see all the options spelled out as councilman of Crosby request if you can get that the council members That would be great to have those options in front of us because we did talk about bonding last week We've talked about a lot of different funding scenarios since I've been on council But now we need to step up to the plate and solve these once and for all this this money You can talk about budgeting all you want. This money can't be used anywhere else in government It can't do a public pet project or anything else. It has to fix our sewer system and That's why it's so critical and so important It's one of our basic services that many of you have said today that we have to start fixing So, you know, I'm not necessarily sure we need to put it on the docket today But we have got to take care of this problem once and for all we've already identified the project This increase has very little to do with the EPA lawsuit in terms of what projects we need to identify We already identified them. It's done So I will support this going on to the docket. We need to have a public hearing as councilmember Gordon suggested I would like to have that next Tuesday if we can do it after work session Possibly if that would be okay to everybody at 6 p.m. I Don't think we have any other zone changes or meetings next Tuesday night We do Absolutely Councilmember Gordon if you'll speak to that issue particularly and then we'll get back to the list. Yes, my my feeling was It's difficult for people to get to meetings during the day Could we have the public meeting in conjunction with the first reading so that the ordinance will be read? And then it would be an evening meeting as many people as we could get here could get here and we could have it in conjunction with the first reading Which if we put it on the docket today or next week, that would be January 24th For that would be fine that that would be fine But we do need to have a public hearing as you suggested And if you we want to do it next Thursday evening during the first reading that would be a great time to do that All right councilmember Stephens I Agree that a public hearing would be indicated because as with most things people's attention you don't really get until the axe is ready to fall and It's about ready to fall One of the things that makes this confusing Is the fact you alluded to I think mr. Stanton about different funds and Sometimes the public I think doesn't understand that we have a general fund which deals with certain things like police and fire Stormwater, but we have a special fund for sanitary sewers And what we're talking about today is raising that particular dedicated money just for that one thing We might be able to look at some other things in a general fund which we could reduce And that would take the burden off of them. And I think that needs to be done certainly And we can do that this is scheduled if we pass this It's scheduled go into effect in May First and I think we can do that and look at the general fund which will be a part of our budget process this spring anyhow Besides the Schools and the bus we also Had a special Tax placed on property for the Board of Health so we have been doing other things But in spite of that, I think this the need for this is Overwhelming and we need to pass it So I'm for putting it on the docket Vice mayor gray You After the conversation today Which is I think been beneficial for all of us. It reminds me of a old aphorism that a Friend of my father's used to say change is better accepted when it's understood and as much as we I suspect as much as we think that we Have our arms around these issues and or we sometimes also question whether we do that the education the education message and public information message is still one that that we hear I Intend to vote for the motion today Principally on account of what? Dr. Stevens just said in terms of the opportunity for us to continue To generate public information and commentary and understanding of the issue Thank You mayor Councilmember to camp Thank You mayor. I Think it's time we put this on the docket and I agree with some of the issues that have been brought up such as Having a public hearing and all I think we should always remember. I don't not sure whether We all saw those sewer rate comparisons, which I think are very important for us to remember The bluegrass ad did cities overpopulation of 2,500 and most of them with this area and we were the lowest ones for what In comparison to these other cities We don't we cannot continue to be the lowest one because we're not getting the job done So we have got to raise this fee. There's no question that we all know that and The sooner the better and so I support this going on the docket For first reading Councilmember Beard, thank you, ma'am. I Just want to make clear that my my problems with the the grant problem and the handling of the indigent program Does not in any way reflect my feeling about going ahead and putting this on the docket and and getting this done The councilmember Ellinger's Comments concerning belt tightening. I don't really understand as relates to capital projects I would say that if we're running a sewer plant with one person That's as tight as the belt can get Maybe without a chainsaw to saw a piece off of him As Councilmember to camp mentioned and we had this information in front of us last week and I do remember standing out that Frankfort was 4x What we were as far as sewer fees were concerned and even after these increases take place We'll be in the middle of the pack. We won't be leading the pack by any means. So You know the public needs As did I when I first came on board here? Needs the education I'd asked Charlie somewhat of the scope of 1,100 Miles of sewer pipe. I mean that's mind-boggling And that does not include The laterals to the homes or anything of that sort that's just the sewer pipe that we maintain I Can remember at the same time back when we had the storm weather problem and the two young ladies who regretfully passed away and there was a concern about other culverts and in Fayette County and We were going to inspect those and we found out that there were 1,600 of those Which also boggles my mind and and you know when you live in a neighborhood You don't really get the idea of what's out there as far as Fayette County's concerned It costs a lot of money to run this business. That's all there is to it. And I don't like the price to come up But at the same time It is our honor bound duty to to protect the public and it's not been done in the past and I would challenge the 1999 Figure that may have been when those projects went on, but this has been going on deferring maintenance on this whole infrastructure for 40 years and And We've still got some antique sewer pipes and In the ground that we're going to have to go back at some point and and dig up and replace. So again, I will enthusiastically support this This increase. Thank you Count councilmember Myers You Thank You mayor, mr. Boeing Can you come to microphone for a second the questions that I have center around the section that relates to the indigent care piece of this I Understand that the council this council can't tie the hands of another council with respect to funding and so you were talking about earlier that It It's incumbent upon each future council to to fund that fund so that the money's there for those who need it My questions are is there a way that we could? Earmark a certain portion of these funds as they come in and put them into a line item For that program and then say three years into it because we know America's aging we know that the baby boomers are retiring in droves and that's going to Spike before it starts to level off and then decrease Can we look at three years five years out whether or not the amount of money we're putting into that fund under that? Legislated mandate is enough to cover it if so We're good to go if we need to back it off a little bit or increase a little bit But is there a way that possibly we can actually fund that program through the legislation in that regard? well, there's a difference I think between Obligating a future council as far as how they have to set up a budget versus having a dedicated revenue stream We do obviously have dedicated revenue streams because all of these sanitary sewer fees have to go to support of the sanitary sewer system Frankly I would want to look at it more closely to make sure I'm right But there is a possibility that that you could say X percentage of revenues generated Would be dedicated to this program the problem is number one I don't know that anyone has done anything to look at what percentage is really needed There probably would be some bottom-line practical concern on how we were tying it up The other thing is we really didn't look real closely at this program because in meetings we did have representatives from social services and adult services there and There was no concern expressed by them that there had ever been any problems with this program meeting the needs. It was meant to address And and of course you've heard there are two separate programs one is in essence an emergency fund for the indigent someone loses their job or Health expense comes up. They can't meet their bill that month that is separate from the senior citizens The senior citizens is put in the section where the rate is calculated So there are no funds dedicated to that that that is a calculation that will be done as They get their bill. They'll get their bill that with that adjustment on it So that's not something that is dependent on funding that level of the population That's going to be on fixed income and of an age to where we don't expect their income is necessarily going to rise So they're going to remain in that situation Their assistance is assured with the way this is written. It doesn't rely on funding So basically the bottom line legally you you probably could dedicate a Revenue stream, but we haven't looked at it from a practical standpoint I think the staff other than law would need to look into that and I'd want to look at it more closely and make sure It was worded Appropriately to bill it be legally supportable. Okay. Thank you. Could I have Commissioner Helms? I'm sorry to bring you out of the back You Thank you for coming forward Could you speak to I know that you said earlier that we haven't had a problem in the past with this fund But do you think there's a need to look at possibly? Seeing if we need to earmark some of these funds to go into a dedicated account. I think in light of a new fee Obviously, there's going to be a need to go back and perhaps look at a program that's been in existence I think someone said for at least 10 years so I think this would be a good time for us to go back and really Look at historically what has occurred and make some adjustment bait make some adjustments based on on that Do you think that would be really difficult? It's not gonna take a lot of time to pull that together. I Don't know whether it would take a lot of time, but I think it would be necessary So we would certainly make the time, okay Do you think that's something that we should do before we finalize this to see if we need to add? The modification of this that would allow that dedicated fund to be set up and funded No, I did not participate in the meeting that Councilmember Blevins had with mrs. Talbert, so I'm not I think he was very comfortable I think she was very comfortable that we are on the right track And I think if we need to make an adjustment we certainly you know can take the time and do that But I think it needs to progress along with Your approval or discussion of this issue Okay, could I don't know who all's involved or would be involved or need to be involved in that process of making that analysis But could we mayor could we? Man Could could we start that dual Train rolling on looking at that analysis so that if we need to if they feel like that we need to make an adjustment on This we can possibly do that before the final meeting Go track. I see no reason why not so Okay, thank you very much Yes, ma'am. I just wanted to say from a legal standpoint any changes in how the department Or division administers the programs of regulations they set up for say frequency of application things of those that sort Aren't specifically laid out in the ordinance So they have some ability to change and adjust their administrative processes as far as how they're serving The the citizens and the clientele that had meet this need can be adjusted without impacting the ordinance Obviously if you want a dedicated stream of revenue that may be a different situation But some changes can be made without impact being impacted by this ordinance Okay. Well with your consent on I'm starting that and those folks work under you to get that done if you could start that dual train rolling or dual track, that would be great and I look forward to the public meeting. I still you know my gut on this is that When we say we're gonna go ahead and pass this and put on a docket, but it's not going to take effect till May I'm not quite sure why we have to do it today And it seems to make more sense to have a public hearing first Because if you don't it's almost like saying to the citizens, we're gonna have a public hearing We want you to come and speak to us But we really don't care because we've already set the train in motion and it's on the docket. So If if this could you ask also could I ask mr Blevins could you speak to whether or not I think I heard from someone on that side of the room that this isn't gonna take Till May that's correct The reason is that we have to by contract notify Kentucky Americans so many days in advance It gives them a chance to change the programming of the fee collection system and so on That's the earliest we could do it And that's why I want to do it today so that we get that ball rolling if we don't then it'll delay I've forgotten what the contractual agreement is 30 60 90 days every council meeting that we delay So I felt like there was plenty of time for a public comment and so forth and yet we need to get the ball rolling That's Okay. Thank you Councilmember Gordon Thank You Mary So just to follow on with that point So Kentucky American needs from January till May to get their system going. Is that correct? Well, technically it's from date of passage right until we officially do this We're not telling them contractually to go make the changes So I've Bill can give you the exact number of days if you like, but it's built in to allow that to occur Okay, can you tell me what that time frame is? We met with Kentucky American water saying that this is what the council was discussing and Creating the scenario of what it would take and they all agreed that they could have it in production by May 1st But they wouldn't actually start programming until second reading so that they would know exactly what they are programming contractually legally there they have 60 days to put a a Increase into place and if they don't have the programming in place, then they would retroactively bill We did not want to pursue that option. So we were asking them Logistically in reality how much time would you need and the 90 days was plenty of time for them to get the programming in place? So that bills that were generated on or after May 1st had the new rate structuring Do we have? Because this involves so many more millions of dollars than in the past do we have some sort of Control or Anything that kicks in that we look at and I'm thinking of the past Situation we had where we were short on our sewer fees because of a glitch Yes, we entered into a new arrangement in October of this past year and we're actually doing GIS Confirmations so that each what new water account that's established We overlay that with our GIS department to validate whether that should be a sewered water account or not we've done that prospectively for the 15 months since the audit was occurred and we're now doing it as new water accounts are established and it's working Now what about? with Already established accounts. Dr. Stevens mentioned I believe last week Citizen who had a quite a large overbilling. What do we do to? Check that out or do we have a control Well, let me let me answer your question, but I want to make sure I'm not confusing it One is to make sure that the all of the customers that should be billed for sewer are being billed Appropriately and so that was what I just talked about If there is a water meter mistake then their water account is overstated their sewer account is overstated and Kentucky American Water has the customer service a call in order to say my water bill or my sewer bill looks Inappropriate and they can contact us if it's only sewer But usually when it's a busted meter line or something like that, it's their total bill whether it's water or sewer It's both affected and that customer service contact is the place to start So we basically leave it up to the customer to pay attention and if they think it's an overbill to take care of it That's correct. Except I would like to remind you of what's called the fall winter averaging And so we already have in place untouched with this new ordinance where residential units Pay the lower of the average Usage for their fall winter period or their actual usage during the spring and summer months and that protects from filling up swing pools Watering new lawns for new construction that type of thing. Okay. Okay. I appreciate that. Well, mr. Blevins. I just wanted to say That I'm in agreement with well for some reason it's this side of the Horseshoe with many of the comments and in particular councilmember Stennett You know as elected officials None of us would ever choose to bring forward a an increase in a tax or a fee I think in our gut that's not what we want to do I do think as leaders and Legislators who are charged with the public health of the community It is up to us to fund what we know we need to do and I know we need to do this I saw the South Elkhorn pump station a long time ago when it was overflowing and There hasn't been enough money to fix it It's a huge fix and that's just one example And I think our public in general will applaud this council if we fix these Problems which are a basic service to our community. So I'm going to support it. I would make one motion to amend Your motion that we have a public meeting not a public hearing but a public meeting so that the public can come express their opinion when we put a Specific plan the specific plan on the docket for four and have it in conjunction with first reading and Then they will be able to comment on a specific plan I'll welcome that as a friendly amendment Farewell councilmember Blevins Thank You mayor. I just want to respond it several of you had some interesting Suggestions and comments about potential changes to this ordinance and I welcome those Well, I would caution you and ask for your forbearance in this way I think we need to get this on the docket and voted on and hopefully in place so that we can begin the Negotiations with Kentucky American water to get get the fee and implemented and in place from a practical logistic standpoint Then we have between now and May 1st To make any changes to tweak the programs that you would prefer to see higher numbers and whatever it is You like I'm glad to help even with that, but we've got to get this started now I really think that and finally I want to thank two individuals Who haven't mentioned so far and tell you the real reason I'm doing this. I have two little boys at home While I'm on this council, there will not be sanitary sewage flowing in the streets or potentially make one of those two little boys ill Potentially die So this legislation is for you Eli and for you Jacob. I hope you all will consider that too Come councilmember James. Yeah, I would just ask that During this time of public meeting and readings and things such as that that we get some really accurate detailed information About the indigent program and the senior citizens program. I mean really lay it out there so that we can clearly I mean I know we've said it and we've heard some people say I think the way it works and So and so is not here to really respond to that. Commissioner helm has responded but doesn't work directly with the program I really need I would like to feel very comfortable With what the program is. So if someone calls my office, it's laid out even I will bite off How vice mayor always says it a chart just a chart a Yeah, give me give me something that I can have in hand. That's tangible that shows me what the changes is because I'm a little Thinking about if there's an increase of 40% But there's only a reduction for senior of 30% that still means that there's an increase in what they're paying And then to say that we're going to increase it Due to increases that will be up to a hundred percent, but there may be a future increase So that means we're going to actually go above a hundred percent increase at some point possibly so just if you could help me as a council member to be able to respond to those concerns by helping to facilitate That information being presented to all council members so that we can So we can take care of our ratepayers taxpayers constituents, whatever you Our friends and our neighbors, thank you. Thank you councilmember Ellinger Thank you, mayor. Just a couple comments on some responses of some comments back to me I don't think any of us are not for fixing this problem we all we all know it's a problem that has to be fixed and has to be done as soon as We can make sure we have the funding mechanism now There's been some statements say that yeah, we have a low sewer fee. And yes, we do compare to your best But you have to look at our aggregate and our taxes. We also have the highest According to the Kentucky League of Sittings when you look at the occupational license, we had the highest on that So when you start looking at aggregate, maybe we're the lowest and sanitary sanitary sewers But we also have the highest and other so you have to look at what everybody's being affected on their taxes Yes, it is a dedicated fund. It's coming out of fund 4002. Mr. Beer when you ask that question, and I like what dr Stevens did say about looking at because I what I meant when I said tighten our belt Because yeah, that's out of the 111 on the general fund, but that still is money that people are paying into it So if we can look at reducing that then maybe we can afford the other areas So we look at the whole aggregate of what we're charging people as their taxes therefore when I said I want to present a motion my motion is that and as I said, I think we need to have the The EPA consent decree before we have this therefore I move that we table this until the consent decree has been signed by the mayor and the public has had a chance to Discuss it so moved. I Have a motion and a second to table the motion to place this on the docket until Such time as the consent decree is signed to the mayor. Is that correct? All right The only aspect of that is debatable is the time at which it's to be taken from the table Any comments on that limited issue? All right, seeing none we'll proceed to vote madam clerk if you could set the electronic Devices where we can vote And if that doesn't work, we'll show hands All right It's on the screen but Yes, please if you wish to table motion, please vote aye if you are opposed to tabling it please vote no Appears as though the motion fails That takes us back now to the where the motion on the table is to add this Ordinance that has been circulated to the docket for the January 24th council meeting and to have a public meeting at that time for purposes of soliciting public comment on this particular issue And and let me try to clarify that just a little bit. Are we talking about I? I Would suggest the best way to do this is to talk about amending our docket on the 24th to permit public comment at 7 o'clock And then commence with the normal business Upon the conclusion of the public comment section so as to avoid all the notice requirements and the like All right. So the motion now is to add the Ordinance to the docket and to amend the docket for November excuse me, January 24th to have public comment at the beginning of the meeting Any discussion All right, madam clerk if you could Councilmember Myers Thank You mayor. I just have one question regarding What you said about the way that we should amend the docket so that we don't have to do the notices I understand they'll save a lot of money to not do the notice but Food for thought is it better that for posterity's sake the records show that we had a public hearing or public meeting specifically regarding this tax increase rather than amending That's up to the council That's my thought that we'd be better off having the public me I think our dilemma here is if we're going and the law department needs to help me here, but if we're going to have A special meeting we'll have some notice obligations, and I don't know What we're into on that I think if you just advertise a public meeting with only one topic I don't think your advertising is Probably going to be too prohibitive and there is no statutory Advertising requirement for a public meeting as there would be for public hearings So I think you can advertise on GTV 3 and and you know things of that sort There's no specifically required Advertisement, I think that if your docket shows an opportunity for public comment on this specific issue Or if it shows a public meeting at 7 to be held to accept comments in that Specific issue I think either way your minutes and your records and your documentation is going to show There was an opportunity for public comment Okay, okay Thank you, I just before we get too far away from this I want to be a councilmember hang on to say Are you through councilmember Ryers? I want to come back before we move forward, but I'll let him smoke her this is just a And aside I guess for lack of a better. I want to correct something that councilmember Ellinger said Probably not being aware of this and I've studied it in some length Woodford County has a higher payroll tax than we have because I say Woodford County Woodford County stacks a payroll tax on top of her sales pay the payroll tax, and I think they pay as I remember 3% in in for sales, so you have to take in consideration the fact that we're in our merged government and There aren't very many of those in the state of Kentucky so all these other Counties can be doing the same type of thing And I wanted to clarify that for the public also, thank you Thank you very much any further discussion Councilmember Myers Thank You mayor I guess two things one I would like to see us have a public meeting Rather than it just be an amendment to the docket, and I'd also like to make a motion to separate Having that public meeting the vote on the public meeting from the vote on passage of this ordinance to the docket Does that make sense I Think the Motion is to divide the motion into two separate motions correct one of which would deal with the Addition of this ordinance to the docket the other of which would deal with the public there is a public meeting correct So might you have a motion is there second? Have a second any discussion on the motion to amend by dividing I Sing none will proceed to vote madam clerk if you'll clear the screen So we can vote electronically Yes, this is on the motion to divide Those in favor of dividing the motion is previously indicated. Please vote aye those opposed vote nay The Motion to divide carries. We'll now proceed to address the issue of Whether to add the ordinance to the docket The floor is open for debate on the motion to add the proposed ordinance to the docket. Is there any further discussion? I Sing none will proceed to vote madam clerk. You'll clear the screen and Councilmembers, please vote aye if you support adding the proposed ordinance to the document docket on January 24th If you're opposed, please vote nay you motion carries We now turn to the second part of the motion Which currently stands that we will conduct? We will receive public comment at the January 24th meeting Is there any discussion of that part of the motion? Councilmember Myers, so if I'm understanding correctly, we're going to have a public meeting on that night. No the well a Yes, we're going to have a public meeting. No, we're not planning on having a separate meeting It would be as I think we originally discussed we'd have public comment on the front end By amending the docket to have our public comment early as opposed to late in the meeting Now if you want to have something separate we'd need to amend that motion Okay, then I would move to him You you want to speak before I do that? I'm sorry. I yield the floor back. All right councilmember Gordon. I was just going to say my amendment originally was for a public meeting So I would presume when we split the motions, that's the motion that's on the table Well, I don't want to get wrapped around the axle When we talked about it initially I thought we came to an agreement that we were going to amend the docket So is to have public comment at the beginning of the January 24th meeting? therefore when we divided it my understanding was we were still talking about a Putting it on the docket and be having public comment at the beginning of the January 24th meeting now. This isn't This isn't that big of an issue Which We want to vote on it, but that's that's the ruling of the chair right now Councilmember Gordon I have a technical question for law if we do a public meeting That requires some advertisement is that correct you mentioned GTV 3 and Public hearing has specific statutory Statutory notice requirements. I do not believe there are specific statutory Requirements for a public meeting and so what the same would hold true of public comment Exactly, but but we would so essentially they're one in the same I Believe that they would be I suppose the issue would be if you bill it as a separate public meeting on this issue Perhaps Bottom line is it might get more people's attention, but I don't think there is any more onerous legal requirement either way I I think it's important to make it a separate issue and Not allow it to mix in with all the other public comment because there will Possibly be other public comment, and I think we should highlight it and do as much as we can to put it on GTV 3 and as many Avenues of advertisement the website etc so that people know and I'm sure the herald leader will help us that we are having Comment about raising the sanitary sewer user fees So I would favor the public meeting idea since it doesn't have the stringent requirement anyway So I'm I move to have a public meeting in Conjunction with the first reading of this ordinance second at what time? Well, I personally prefer we read the ordinance We've done this in the past when we do Other things we read the ordinance for the first time and then have the public meeting during the body of the meeting Yes, right in the middle The clerk's office has indicated to me. They certainly have no problem also in simply advertising this separately It's not you know it will fit within their budget They will advertise it as a public meeting to take place on that date and time on this issue And that way you know you you know that it's being handled the same as of any other public meeting If I understand your proposal correctly you want to advertise a public meeting in the middle of The council meeting is that correct yes, we do that law can give some examples. We do that when we have CDBG Funding we do that when we have other I Can't remember right offhand what they are, but we'll do the reading and then have the meeting is that I think those are frequently done in cases where there are statutory requirements for a hearing But there's certainly no problem with with handling it that way and what the clerk's office does is they advertise it as taking place At seven o'clock that night and any time thereafter that you reach that point in the meeting is fine the advertisement has been sufficient All right Everyone comfortable with where we are we have a motion then from councilmember Gordon I I Think to in effect substitute this whole concept, so is there a second yeah, I second it councilmember Myers Thank you for the discussion Those in favor, please vote aye Opposed no The motion carries unanimously All right any anything further on that general topic That being the case, I think we're prepared to move to council reports If you'll indicate your desire to speak we'll I'm trying to do that, but I can't get mine to come up Oh, we'll start with councilmember Stevens. How about okay? Thank you council pursuant to the resolution which we passed five days ago Which requested that We asked the Little water company and any other interested parties to appear before us to discuss their aspects of the Issue we have concerning supply of water for our community Mr.. Greg Heisman is here today accompanied by Vincent Gunther to tell us about their Thoughts at the present time mr. Heisman and was involved with the board meeting at the little water company today So we're grateful that they were able to Negotiate the treacherous i-64 and make it here in time Thank you very much in mr. Heisman. I think the floor is yours They prepared a I've been told a short presentation and And then be available for questions The thought was that since we have a 30-day time period now 25 days We needed to initiate this as soon as possible and today was the first opportunity Take us a minute here to get set up on the computer with the PowerPoint presentation we could also show it So the public can see it. I've handed out a copy to everyone as well First of all let me introduce myself my name is Greg Heisman I'm president of the Louisville water company and glad to be back here We've been very busy the past several months since we last were here in September very busy with the Public Service Commission proceedings with the Central Kentucky water supply issue and we've also been very busy in responding to a lot of the submittals to the Public Service Commission and The hearing process that occurred in November What we have also have found is we've been doing a lot of work Additional work, and we have some new information that we would like to provide to the to the mayor and the council So we really appreciate the opportunity today to be able to make this present this brief presentation Really some of the the key points that we would like to make You We're working on a the PowerPoint presentation here, we'll get it up in a second Okay Couple of key points that we want to make today is we thought we'd briefly cover the project itself That that you all are very familiar with from our presentation previously this past summer and also in September We've also have some new information. We'd like to share with you related to the project route and the I-64 right-of-way We also will discuss the project cost estimate and some funding alternatives that we have been investigating The project schedule and the water availability The partnerships that we've been able to work on with Frankfurt the city of Frankfurt as well as the Shelby County water providers, and then we're going to close on the benefits So we have about 15 slides. We'll quickly go through today Vince Gunther is going to make the presentation and then I will be available for questions Thank you Just Real quick recap of what we've talked about in the past The proposal the little water company currently has 35 million gallons of reserve capacity that can easily be upgraded to 95 And what we're proposing is to be able to provide 25 million gallons of water to Central, Kentucky Project is a 58 mile pipeline through a 36 inch main with pump stations and storage tanks The project will be designed beginning in this year constructed from 2009 to 2012 and then we also have a incremental supply solution that can get 3 to 12 million gallons in the time frame of 2008 to 2011 and then the full 25 to 30 mgd by 2012 The Route is along I-64 as we originally proposed. There is a slight change to that what we are talking about doing is going along the north side of I-64 from Louisville to Frankfurt and then in Frankfurt we will go along Highway 127 we'll use the east-west connector in Frankfurt, which is highway 676 and this really the benefit of this it gets it gets us down to the Frankfurt plant board treatment plant and it's an easy crossing across the Kentucky River from that point on the other side of the Kentucky River We would propose going up along highway 421 to I-64 at Duckers Road and then from that point we would jump back up on I-64 and take the pipeline Into Lexington at Newtown Pike where Kentucky Americans 24-inch line is One of the real benefits of this route is that it provides for interconnectivity With all of these different providers, of course the Louisville water company West Shelby water district the Shelbyville water and sewer North Shelby water company US 60 water district the Frankfurt plant board Georgetown Kentucky American in the city of Lexington Winchester Nicholasville and the other members of the bluegrass Water Supply Commission could all tie into this this proposal I hit the wrong button here The Next slide on the presentation. I'll let them try to work to get to that. I'm looking for the page There we go. Thank you This shows What I had talked about the the one edition on this map we talked about the two sections The first section is of course that section That is in that kind of purple color and that's the area that the Louisville water company will design build and own that section and We will pay for the funding for that and then the section phage would pick up from Shelbyville over all the way into Lexington We'd also like to update you on The feasibility to be able to build this project within the public right-of-way along I-64 Mr. Heisman and I actually met with officials from the Kentucky Transportation Cabinet the first week of January and we were very encouraged to learn that the the cabinet has a current policy in place that allows for the installation of utilities in the right-of-way easement when the utility can demonstrate that they meet certain criteria such as the Maintenance and construction will not adversely impact the interstate traffic safety will not be impacted Future road widenings or the expansion of the interstate would not be impacted and the use of the right-of-way is ultimately in the public interest What this means is we are still going to have to pursue private easements through negotiation with private property owners but when appropriate when the route would meet these criteria or with if we run into a Culturally or environmentally sensitive area we would then go to the cabinet and ask for for Their approval to allow that section of the water main to be placed in the public right-of-way So the way that that would work is we would hire our design engineers They would do a thorough review of the route and they would identify those areas that would Cause some difficulty and then we would make that proposal to the transportation cabinet the other thing we would like to propose is that the Louisville water company helped facilitate an additional meeting with the Kentucky Transportation Cabinet and We would invite representatives from the Lexington Fayette Council to join us in that meeting So if you wanted to designate one or two representatives that would be interested in attending that meeting We would facilitate that and try to get that meeting scheduled within the next couple of weeks The Cost estimate we are proposing that we're going to build this in two different Sections, of course the first section from Louisville to Shelbyville, which I mentioned The Louisville water company would build at 35 million dollars The second section from Shelbyville to Lexington can be built at a cost of 88 million dollars The Proposed funding for the second section It was broken into two phases the section from Shelbyville to Frankfort We're proposing that that be funded through a series of grants low interest loans and equity from the Shelby and Franklin County water providers the second section of phase section to be which would be from Frankfort to Lexington likewise, we are proposing that that would be funded through a series of grants low interest loans and Equity from the city of Lexington the Bluegrass Water Supply Commission and the Kentucky American Water Company As We have mentioned in the past. We believe that this project is very viable for grants and low-interest loans state grants bonds low-interest loans from entities like the Kentucky Infrastructure Authority the Kentucky Association of Counties The Kentucky League of Cities and the Kentucky Rural Water Association and like we proposed with the the Transportation cabinet we are suggesting that we would also set up a meeting with these various lending Institutions and invite a member of the council or members of the council to accompany us in that meeting So that we can learn more about the process and the availability of low-interest loans And again, we believe that we can schedule those in the next week or two We're Talking about designing this doing the design and the construction in Three different phases we think this will expedite the project section one of course is a little Shelbyville section to a Shelbyville to Frankfort and section to be Frankfort to Lexington and here again is the map and it's it's it's kind of difficult to get into the detail, but What we are proposing that we do is that when we get to Frankfort I had mentioned that we would go down highway 127 there's a lot of wide public right-of-way along that route and then pick up the east-west connector again There's a lot of state public right-of-way along that route Tie into the Frankfort plant board at that point and then on the other side of the Kentucky River take that route and find the The route that would move either over through 421 To Duckers Road to hook up at I-64 at that point The time frame for this is Starting now through June of this year. We will be conducting the preliminary design and in fact the Louisville water company has reached Agreement from all of the Shelby County providers and the Frankfort plant board To come up with the funding to hire the design engineer to design this section of the route from Louisville into Frankfort and We are the the the RFP is being drafted and we hope to be able to issue that our RFP in the coming weeks But the the main point about that is that all of those entities have agreed to a very specific dollar amount to fund that project We're proposing that July of this year through January We can complete the final design in March We would begin the permits the right-of-way and easement acquisition and we believe we can complete that by March of 2009 And then we would bid the project in three different sections for those section one We we could get complete by the summer of 2010 section 2a The summer of 2010 and then the final section by July 2012 And let's talk about what building in sections can do for us We are proposing that an incremental source of supply can be provided to Lexington to supplement the supply before the full 36 inch mains can be completed from point A all the way to point B and What we are talking about the feasibility of being able to do this is in the summer of this year Two to three million gallons of water could be provided by utilizing the existing infrastructure that exists right now today with the tie-in between Kentucky American Systems and Bursell's so with you just by utilizing that infrastructure that there's that is there Currently today by this summer. You could have two to three million gallons of water the following summer by capitalizing on a source of supply from Frankfurt And and using the existing infrastructure that's in place that can be increased to five to seven million gallons a day and then by the 2010 when that incremental supply is coming in from the Louisville pipeline that can be boosted to 10 to 12 and then Finally when the full 36 inch main is built crossing the Kentucky River from Louisville all the way to To into to Lexington the full 25 to 30 million gallons of water could be provided by the summer of 2012 This Is just a list of the partners that could be in involved in this project I've listed them before it's the same group that that I had mentioned about the the Advantages of the interconnectivity and now I'd like to turn it over to mr. Heisman to wrap up with the benefits and answer questions We have a benefit page many of these items you've seen before Want to run through them briefly is one of the advantages that we see with the Louisville pipeline proposal to serve Central Kentucky is It will be a partnership between a wide variety of public water providers as well as private water providers Kentucky American Water Company in Kentucky What's also attractive is we firmly believe and we testified before the Public Service Commission that public financing? Will significantly allow us to be able to build this project and ultimately lower the cost to water Consumers that take water from this pipeline. So public financing is a significant attribute of a major project like this Third bullet you've heard before it provides a Louisville pipeline provides long-term drought protection because of that abundant supply from the Ohio River It also provides interconnectivity as we connect the communities between Louisville and Lexington There is some reserve capacity that is available in Shelbyville. There's reserve capacity as you heard today With for sales and with Frankfurt and it certainly does not add up to the complete amount of water that Lexington needs But it can provide an incremental supply in the event of an emergency and also provide the incremental supply that's needed by the year 2010 This also this project provides the water solution all the way through 2030 and allows for a planned and managed growth process with a whole wide variety of partners along the route along Interstate 64 The Louisville pipeline is also an expandable source I previously presented how a pipeline solution is scalable because with additional pumping energy you can push more water through the same diameter pipeline Approximately an additional 20 to 30 percent and then also what we previously presented the last time we were here in September is Depending on the amount of public versus private financing and this information was provided to the Public Service Commission The RBEC the RWBEC study has provided us with information that there are potential savings that range from 105 million to 147 million dollars over a 20-year period when you consider the net present value Between the Kentucky American proposed plant on pool three versus the Louisville pipeline proposal that we've presented What we really wanted to come in here today We want to demonstrate that we've we've done some additional due diligence on our part about the Louisville pipeline solution We've worked very hard with a number of the water providers and have made significant progress with the partnership with water providers in Shelby County and As well as Frankfort and as you have read and are aware of Frankfort and those Shelby County water providers are on board to be able to build a pipeline between Louisville and Frankfort So we are proceeding forward with that Those entities we have met with and we've explained to them that we're also making this same water service available to Central Kentucky the difference would be is if we Build the pipeline to Lexington It would be sized as a 36 inch line If it only goes to Frankfort it would be built as a 24 inch supply and the difference would be a 24 inch line supplies 10 million gallons a day a 36 inch line will provide 25 to 30 million gallons a day So it's an opportunity for us to be able to truly connect The various communities between Louisville and Lexington and be able to use a public-private partnership To be able to advance the water needs for Central Kentucky We also recognize that our work is not done We still have a lot of work to do with respect to getting easements and getting permits and going through design And we've laid out what we believe is a very reasonable schedule in order to be able to build this pipeline And I want to make it clear I do not believe in my professional opinion that we would be able to complete the entire pipeline by July of 2010 We have testified before the Public Service Commission and again here tonight Are presenting that the complete pipeline with a complete 20-year solution would not be available until the year 2012 with some construction techniques Pursuing design build being able to evaluate multiple phasing or multiple contracts We might be able to advance that to a year sooner but this would be a major public works project and it's going to take about a year to be able to do the design and About a year to secure the permits from the Army Corps of Engineers and from the state of Kentucky and and procure the easements And complete all that and ultimately put out the bid package and then it's going to be about a two-year construction period So when you add all that up at a minimum, you're looking at three years because of unknowns And unexpected events we put that into the our time schedule and have reflected that in what you what you have in your packet today But a key point what we have found out is that after working with Frankfurt and after meetings last week with for sales We recognize that there is a need to get at least 10 million gallons of water a day Available by July of 2010. And so we've worked very hard about putting a package together that would allow Central Kentucky to have 10 million gallons of supply by July of 2010 and build this in a phased approach So that the Louisville pipeline alternative can be seriously given consideration by this council and by the community so with that that that concludes our presentation and Vince and I would entertain any questions and and We'll move forward. We're very respectful of the 30 days that you have requested For us to do some additional Evaluation and we want to partner with you as we go out and set up these meetings with the various lending institutions in Kentucky As well as with the transportation cabinet and others to be able to get the answers that you need Ultimately to be able to make your decision on what is the best alternative to provide water for Central, Kentucky? So with that all I'll entertain any questions, but dr. Stephens, I'll turn the floor back over to you to proceed as you wish I have a list here of seven people. Mr. Garton is first What list am I going for? Just do you have any more questions as you're part of the council reporter? Okay What are we doing who would like to question? Mr. Blevins? Thank you, I want to ask you a few questions real quick on your benefits page You've just told us that you see potential savings of 105 to 147 million Which is a pretty stark contrast with what the testimony the Attorney General's expert was Is there something new that you're bringing today that changes those numbers or is this your testimony before the Commission? This is consistent with our testimony before the Commission There is not anything that is new since then what we were asked through the proceedings in process by by the Public Service Commission others was to do a sensitivity analysis of Public versus private financing and that's what this range shows is the various savings and so this Makes this information here is based upon the RW Beck Assumptions that were presented before the Public Service Commission and in fairness the AG's office expert consultant provided their testimony Before the Commission and they roughly he roughly testified that the savings are roughly equal Well, essentially the two proposals are roughly equal and there's not significant savings and then certainly Kentucky Americans Expert witness provided information their savings for the pool three plant. So this is consistent with what was submitted before the Public Service Commission Okay, would it be fair to say that the following assertion is accurate? You do not have permission to use the right-of-way along I-64 and various state routes what you have is permission to on occasion under exceptional circumstances Use the right-of-way if you need it and you meet the circumstances that the other gentleman met that is correct Okay, so you will be acquiring lots of private easements and so forth for the majority of the project Yes, and I want to make it clear for all the council members and what we testify before the PSC and all the RW Beck Analysis it assumed the worst-case scenario our schedule and our costs and our savings assume that 100% of this project would be built in private easements and So getting a portion of this pipeline inside of state Right-of-way, whether it's a state road or the interstate would only reduce the cost and speed up the time So what everything that we have presented before the Public Service Commission is that worst-case scenario? Okay, the next question I have is with regard to your rates I know a lot has transpired since you were last here as well as since December when the PSC set us where we are today Have your rates changed for what you propose is in For this project. No, they have not In fact at our board meeting today our wholesale rate was unchanged our board made the decision in December not to change our standard wholesale rate So the dollar seventy one I don't mean today's okay I mean the dollar seventy one is that still the proposal on the table is still the proposal on the table and that has not Changed okay, and that is continues to be our commitment and last question I want to give you the opportunity to defer this to go study and come back and give us a different answer One of the things that was a turning point in this whole story was years ago When we discussed whether or not you all would reserve 20 million gallons a day for us or whether we had to pre-purchase it That was a big deal and I want to ask you the following question if we were as a Community to team up with all the other communities that would be serviced by this pipeline and say we are in this together If any one community Experiences a draw we all undergo restrictions and we do whatever it takes to make sure everybody has the needed flow of water If we say that and we enter into a memorandum of understanding or agreement or whatever it takes Legally's to make that happen, which I believe all Kentuckians would support Would that affect your rate and if so, how much if if we first of all? I want to clarify that what we have already committed to is that we will reserve the entire pipeline capacity The 36 inch line has a capacity of 25 to 30 mgd we've committed to Reserving that entire capacity in the proposal that we have and then what we did in order to be able to provide this rate the dollar 71 rate which is our standard rate is to essentially what we've committed to is Assuring that we will always maintain at least a 15 percent reserve Above our maximum day of record and the reason we did that is that rather than reserving a specific allotment of water out of our treatment plant because if we do that drives up that price that dollar 71 would have to go up and We recognize it wouldn't that would not be feasible so our solution is is that we would commit for the benefit of all customers all of our existing retail customers and The customers that would be wholesale that we serve by this line would all benefit from that 15% that is maintained as a reserve above our maximum day and Currently what we our current maximum day of record is 205 and we currently have that 15% reserve now Why can we do that? And why would we have the entire rate base absorb that is because that's a requirement of the division of water So what happens is is therefore the customers in Central, Kentucky don't have to pay that premium of a dollar 71 Whereas we could commit and we have offered in the past to reserve treatment plant capacity But in that event that dollar 71 price would increase Well, I was hoping that in offering regional cooperation with respect to draw restrictions You might be able to put a sharper pencil to your rate Because this council's having to rely at least currently on the Attorney General's expert as the balanced view Since both parties seem to be presenting their own proposals in the best possible light that view nets. You all is roughly equal and Until you can show that your solution is substantially less expensive and I don't know what substantially is for even me But it would take something significant to make us walk away from from a bird in hand and wait for one That's gonna be a maybe that's just for me I don't know what everybody else would say, but I'd like to have you go back and think about that certainly respect your inquiry and your position on that and What ultimately what you may want to consider as a council is? Having your own financial Expertise look at those alternatives not conduct your own study because that does take an extensive amount of time but to drill down and look at the assumptions that were made by the RW Beck report the Walker report in the Rubin report and Provide you counsel and independent recommendations related to those reports because we stand by this RW Beck report and the savings that will be provided to Central Kentucky ratepayers. Well, it's my understanding. We only have 25 days. So I We would be challenged to pull that off in 25 days. First of all and second of all Less a change in your rates. I'm not sure we're gonna be able to do much So I'm asking you again put a sharper pencil to it if you can that's all I have. Dr. Stevens. Thank you Thank You, mr. Blevins mrs. Gordon and mr. Beard anyone else, thank you. Thank you. Mr. Heisman. Mr Gunther for your presentation. I just had a couple questions on page three where you talked about the project The last bullet the Incremental supply does that refer to page 13 and your list of? for sales for sales Frankfurt Yes, but that's so that refers directly back to those particular Availabilities of water supply Yes Well when you said that the Versailles two to three million gallons per day was available using existing infrastructure Can you expand upon that? Would there not be any? New infrastructure needed what we met with the Versailles Public Works director on Friday and to learn about the existing interconnection So currently what was relayed to me on Friday was that Kentucky American has a interconnection currently with Versailles Okay, and some of you may not be aware of it for sales Consider being part of the bluegrass water supply commission and early on was engaged But they were in a desperate need of water a number of years ago So they went on and made their own independent decision to expand their water treatment plant build a new water treatment plant on the Kentucky River on pool 5 They have a 10 million gallon per day treatment plant And they're using about on a max day about four and a half so about 50% So what they have available is 5 million gallons a day and after we sat down and worked with them We learned that they have an existing interconnection so to your question the piping is already in place. They had a consultant Evaluate this a little over a year ago About a year and a half ago, and they recognized that there would have to be a pumping station installed And they estimated at the time there would be about a hundred and sixty Thousand dollars in order to be able to lift the water because there are two different pressure zones And what would be needed the water quantity is there they would need to lift that water up And so that provides at least one increment of solution in the event of again either an emergency or a drought condition That would be available and so it'd be very easy to install either a permanent or a temporary pumping station to be able to make that investment, so Vince reminded me that's what we did in Louisville This past summer with respect to boosting pressure in localized areas by installing a temporary diesel booster pumping station so to the point For for very low investment that two to three million gallon a day supplies available What the Versailles public works director committed to me on Friday is he would have their engineer? Update that report that was done in 2006 to determine now that they've improved their plants put in a 24-inch water line up to the heart of Versailles To see what it would take to get the 5m GD available So it likely is going to require an additional investment in pumping more than just a hundred and fifty thousand dollars So within within two weeks. We should know that answer as well Would you tell me again? What year do you know what year for sales made their change to make their walk more water available? What year was that they completed their plant in my understanding is they completed in late? 2005 or 2006 so it's essentially it's a brand new water treatment plant And intake on the Kentucky River and interesting we found that they retained their previous intake so their source Down at the Kentucky River has 14 million gallons a day the ability to take 14 out the treatment process though only has Capacity for 10, but it was designed and built to be able to be expanded to 14 So there's some additional opportunity there as well to leverage that resource Again, not as the complete solution, but as an incremental solution, and this was looked at by the bluegrass water supply commission as well now back on page 3 the first bullet Louisville water company has available 35 million gallons per day reserve capacity Easily the part. I want to focus on is easily expandable to 95 million gallons per day Can you explain what you mean by easily expandable to 95? Currently we use the number our demand our peak day of record. It was 205 million the Kentucky Division of Water acknowledges that we have a current capacity of 240 so that's where the 35 comes from what we recently completed this past summer in August was a study to determine What capacity do we have all the way through the entire treatment? Train from the Ohio River all the way through our process and what we found is we got a couple of bottlenecks Down at our river station at Zorn Avenue and also at our be pain water treatment plant We have well over 300 nearly 400 million gallons a day of water capacity at the river But as we take it up through the treatment process We start to begin to have bottlenecks And so what we had the engineer go in and do is what if we remove the bottlenecks what it would it take it? To to very cost-effectively be able to expand it and they came back and for about five million dollars Which is very a very low cost We can expand the existing footprint of the plant from that 240 up to 300 million gallons a day 300 minus 205 gives the 95 million gallons a day and a lot of folks are wondering and we testified with this before the Public Service Commission, how can you get an additional? 60 million gallons a day for only five million dollars and essentially what it is It's a hydraulic limitation where we would take the weirs Inside the treatment train process and raise those and lower those to adjust the hydraulic flow And then we also have to add additional chemical feed systems to be able to handle the additional Capacity of water going through the plant, but the physical structure the pumping the storage etc are already in place Okay, so that's one clear advantages is for a very low cost we can expand our reserve treatment plant capacity My last question has to do with the map yes You will recall on July the 2nd when you came to the planning committee Yes, when we first heard from you There was a lot of discussion about going across the river and the discussion centered on the high bridge so you have it looks like taking this a different route, and you said you would be right at the Frankfort treatment plant is that what you said yes, and is it's a low bridge. Yes, and So do you know if you could go under the river or if you could go on the bridge? Or do you not know that at this time? We don't know I know after that last meeting. I've since Since August I guess I've ridden a lot of roads in Central, Kentucky to better understand the terrain And I wrote underneath those bridges They go across the Kentucky River and looked up And I'd love to be able to tuck them right underneath the road But that does does not appear to be practical at this point so at that point I learned we need to find another route anytime you travel down interstate 64 There's actually two two cuts one cut down to highway 460 the other one down to the Kentucky River And the train is very challenging and so with that I started looking Where would other routes be located that would be more feasible and reduce the cost and be able to be done quicker And so what we did is we started working with the Frankfort plant board and their engineers And we discovered as many of you know the travel in Frankfort There is an east-west connector, and so what we've identified is the route that we could go down 127 or through some potential development that is occurring and get us down to that east-west connector Which is a much slower gradual change through the rock cut it is a state right-of-way instead of an interstate right-of-way So there it is not completely controlled access when we met with the highway Department officials they were understanding of being able to put Utilities in that right-of-way, and then we get down instead of being 150 feet up in the air We're down at the great of the Kentucky River And then what we would do is either look at the feasibility at that point of going underneath the river which First of all Frankfort is already underneath the river with a 36 inch line so for that interim solution We just tie in on the west side to the existing 36 inch and we're already underneath the river but then long term we would go with a second feed underneath the river back up the east-west connector and One of the real advantages is the Frankfort plant is right there at the Kentucky River So we already have the existing property available the existing plant footprint existing storage existing power And we really discovered that after Frankfort agreed that we want that they wanted to connect to Louisville So that additional investigation has really led us to how could we leverage that investment? Eventually to get the pipeline over to Lexington if so desired okay. Thank you very much Mr.. Beard Thank You dr. Stevens um I have a kind of a series of questions mr. Heisman The Shelbyville to Lexington number on page 8 was 88 million dollars And does that? Correlate to I think what you talked about in In July as the 69 million dollar when we when we originally came this past summer I'm going for memory, but I believe we reported an estimated construction cost of 56 million And that did not include the engineering the right-of-way acquisition bonding etc So we went back as part of the RW Beck analysis That we came in September, and we reported that the estimated cost is 88 So if you go back the presentation in September the 88 million dollars is consistent with that Now since that time Kentucky American has performed their bids And you know the results of those bids the the water treatment plant costs came in a little bit higher But the pipeline cost came in a little bit lower We went and looked at those costs and compared them to the cost estimate that we've used here and at this point There's no basis to make the change we we still believe that the 88 million dollars is the best estimate of the cost of a 36 inch line between Shelbyville all the way over to Newtown Pike in Lexington, okay the I guess the question then is Frankfurt has entered the fray at some point yes, how do we pro rate? That 88 million dollars because they should have some portion of it That is correct and what we have been in discussions with them Through the meetings that we're having monthly as to what will they be? investing between Shelbyville and Frankfurt on the west side of the Kentucky River to get a 5 to 10 million gallon a supply to them The concept then would be is bring all the parties together and Shelby County Providers have a stake in this an investment Frankfurt has a stake in investment and then ultimately either Kentucky American or Lexington Georgetown and others would have the same so we would bring the parties together See out of the capacity is available in the pipeline Who would reserve what component of that capacity and then as you say we would then pro rate that cost so the 88? Would be lower actually it would be lower the more partners We get to the table okay, and certainly Frankfurt has committed to be at the table We have yet to determine out of that 88 million dollars. What would be their share of the investment? in some of our internal discussions It was presented to us that We would probably have to own 90% of something some portion for The project to be considered bondable for tax-free Purposes Do you know anything about that or does anybody else? Up there in the balcony. What do you think about that? It was mentioned at one point I'm not aware of that that requirement. I don't want to disagree with that what what I want to make clear is from my personal experience Serving on the Kentucky Infrastructure Authority Board and a number of meetings that we've already had with the Kentucky League of Cities and the Association Of counties and some others is that there is public financing that is out there So what I'm envisioning is a whole suite is a diversified solution of Sources of funds that would go into this project because it benefits so many different parties So you may out of a funding of a project like this part of it may be from actual bonds that are issued taxable or tax-exempt Part of it may could be funded from existing Sources of money inside these various agencies and then certainly grants could come into play so I'm envisioning at this point a Very diversified portfolio of resources that would go in because it benefits so many different parties What do you have any heartburn about not owning any part or owning only 10% of the pipeline? Well, our proposal as we have today is that we would own the portion that we will pay for the hundred percent So we're putting thirty five million dollars on the table here that thirty five million dollars will build that pipeline to Shelbyville And the Louisville water company would own that component of it. Now. There's other variations there I mean we would certainly be open to taking that investment and Spreading it in a partnership and say being a ten or a twenty or thirty percent equity ownership I think those could all be explored. But at this point what we have proposed is we would have a hundred percent ownership to Shelbyville But again, we could we can consider Right Vince. You said the best way to characterize it after Shelbyville. The Louisville water company does not have to own Okay, that's that's maybe that's more directly answer. That's a good answer. I was looking for and one last question When you acquire right-of-way, are you gonna acquire enough right-of-way to run a parallel pipe? Because we like a little longer horizon in 20 years. That's right and we would to I've testified before and mentioned before that I Believe in being the infrastructure business for 25 years and water is you don't want to make all your investments at once you want to stagger investments so you have lives that that Essentially overlap one another and when you build pipelines, they last 80 to 100 years So from my perspective you want to match the need with the investment schedule So what we would do is we proposed a 50-foot wide easement that would parallel interstate 64 You know and we worked with our engineers we would lay out one path for the first 36 inch line 20 years from now 30 years from now the second line could come in you got then the Benefit of the scalability and then you also have the benefit at some point during a slack demand 80 years from now you're gonna have to replace the line So you need to have a physical space to be able to place it so we don't want to have to come back 20 years from now 40 years from now and add additional right away by that time that property may be developed So that's a very good point. Okay. Thank you very much Mr. McCord Thank You councilmember Stevens, thank you guys for coming down. I'm gonna give you just a break for a second I want to ask a quick question of our attorney Dave Barbieri real quick I think we we've put a little bit of the cart before the horse on this even this presentation I think we need to take one step back for the public that are watching and And explain a little bit about what we have in front of us because the emails that I get and some of the editorials Come from a very uninformed Populace and I have said before that people have been led in a certain direction And I want to clear that up before we get going so at the very For the record so we've said it again, and these are the same question I asked you the other day is just Dave what is in front of the PSC right this second? What are the what is the PSC making a decision on they are deciding whether to approve? Kentucky Kentucky American Water Company's application for a certificate of public Necessity for their pipe for their treatment plant proposal okay, and in Kentucky American is the only entity Legally responsible to solve the water supply problem in our area correct Kentucky American has been Basically ordered by the Public Service Commission to address their water supply deficit issue, okay, okay? So so Kentucky American is the is the one that has legal responsibility to do it. They are our water supplier What is before the Public Service Commission is not a this versus that it is? Kentucky American's Solution to the order that they are under And so Louisville as an intervener in the case because as you all came in in July Shortly thereafter you became an intervener in the case. I just want everybody know. What does that mean? What does it mean that Louisville intervened in the case? I'd defer to them on why they intervene But my understanding of the reason they intervened is they wanted to show the Public Service Commission that there was a perhaps more Reasonable alternative that Kentucky American Water Company should have considered as part of their process in getting to the certificate of need point Is that a fair statement just is that why you intervened? I Think that's fair statement. What I'd like to add is Back in July we had not intervened to that point until the Public Service Commission Requested made an open records request of us to pull in all proposals that we have Entertained with Kentucky American going back to 1994 and that was an 1,100 page document request and after meeting with our General counsel and internal counsel What we did is determine that we felt it would be best For us to intervene so we could be a party to the proceedings so we could present the facts of the little water company And they would not be misrepresented by any other party and water matter by there are seven interveners in the process So I think that's a fair characterization We want to be able to get out there and tell our story sure For ultimately for the Public Service Commission to make the best informed decision Okay, so at the end of the day and you can say that I'm done with David Thank you, David at the end of the day then then your role as an intervener was to put forward Your case as to maybe this isn't the best solution Maybe we have something better But at the end of the day PSC has to decide if Kentucky Americans is a yay or nay based on your evidence Correct. That is correct. Okay. So for the public watching let's back up two steps What is in front of the PSC today is Kentucky Americans proposal up or down? Nothing else and all of this that we've done Is is inviting someone in outside the process the PSC is the one that is charged with that our tax dollars Our tax dollars pay for this entity to make this decision and for whatever reason they've they've said we want you to look at this They did not say to this council We want you to sit down and talk to Louisville about their proposal and how we can make that work So let's just go ahead and get that clear up front before we get into all this other stuff Because I think we're again putting cart before the horse My question is this or a couple questions is is what you're proposing today or the thing that you showed us Is this your exact testimony? the same proposal before the PSC Yes, I think this let me qualify the slight difference at the time. We testified we did not have information Related to the route of the pipeline that would thread through Frankfurt now that we now think that is a better route So that's new information sure and we also what we talked about today the supplemental information related to the Kentucky Transportation cabinet that they do have an existing policy is new information And then also some of the homework that we have done related to public financing is new information But essentially the core of the proposal is the same the cost estimate is saying the savings Projections are the same etc. Okay And exactly how long does it take? Do you envision to use when he works how long does it take how long will it take you to get the regulatory approval for? this plan the Well, I think from a regulatory perspective. I think that clearly can come within less than a year We made contact with the Army Corps of Engineers on the permits that are needed there And we're very familiar with the Kentucky Division of Water and we get all the feedback We get as those permits can be granted to us and they're measured in months three to six months So I do not see a concern there I think regardless of what whichever project is built the right-of-way Essentially securing the easements or the right-of-way what we in the industry will call the right-of-way is going to be the toughest challenge It's not going to be the construction It's going to be securing the right-of-way to be able to build the pipeline and that's for either project And I want this council to remember the issue that we had off of Richmond Road in a neighborhood where the Corps of Engineers came back a little later and said That we as a government didn't quite get all the permits that we had and I found that the Corps of Engineers are not the most easy group to deal with They're not they don't move very easily. In fact, they decided to redo the dam at Cumberland Falls Or come to Lake Cumberland this summer and and basically didn't ask anybody's approval So saying that we'll just go ahead and get all that from the Corps of Engineers it's a red flag for me, but as we come to the Schedule that you had of March 08 to March of 09 for the easements. I think that you we talked about the majority This is private, and what you're doing is going on the right of way where we need to. And we're going to bid this in three sections. This is something that you're suggesting, and the final section is 2012. And that is a do you envision that that's the completion of all three sections? Of the entire project that would provide the 20-year solution, the full capacity of the pipeline. And the reason I did that and kept it that way is recognizing that you do a project this big, this large going over 60 miles of route, or you do a project as large as the plant on the Kentucky River. There are going to be construction challenges, there are going to be right-of-way challenges. And just like Kentucky American, you have to anticipate those so that we don't over commit ourselves. Sure. And that's what's very important to understand by connecting the systems we need, and I presented before that there has to be developed a contingency plan, regardless of which solution you ultimately endorse or choose. There needs to be a contingency plan in place in the event of a drought or in the event that there's not adequate supply for the 2010 equestrian games. Okay. Lexington, as a member of the Blue Grass Water Supply Commission, as a partner in that, how many times have you brought a plan to the Blue Grass Water Commission over the past few years? I would say going back to 2004, 2005 time frame, we have been invited at least three or four times and have presented at their request. In each case, they requested us to provide a presentation at least half a dozen different times. So there's been a whole wide variety of different evaluations or scenarios to optimize the solution for the Blue Grass Water Supply Commission. And have they rejected those offers? How did that go? They went on record and they have a report that acknowledges that the Louisville Pipeline is the lowest cost solution. However, their commission ultimately decided that what they felt the best solution was to be able to build a plant on Pool 3 of the Kentucky River. And as you're aware, originally they had proposed to build a plant on the Kentucky River and now Kentucky American has proposed to build that plant on Pool 3. And the O'Brien-Greer study that rejected that, is that what you're referring to? Yes, sir. Okay. And then what makes this proposal different than the ones that they rejected or that O'Brien-Greer rejected? I think a lot of cases, many of the same elements are in this same proposal. What is of value is the ability to interconnect the systems. The new information is being able to leverage between what is available in Versailles, what's available in Frankfurt, what's available in Shelby County. So I would characterize it, the new information is the relationship building and the existing available capacity to build an incremental solution as opposed to a solution that automatically provides you the complete 25 MGD by a specific date. Okay. And then, now, how many more customers does Louisville Water serve by doing this proposal? How many do you add? Besides Lexington, what's the amount? Well, currently, from a customer point of view, retail customer perspective, we have about 280,000 retail customers. This proposal here is not a retail customer solution. It's a wholesale. So, for example, if we enter into a wholesale arrangement with what we would propose as Shelby Franklin Regional Water Commission, it may be only one additional customer. It would be just a very large customer. Likewise, with Kentucky American, it might be one additional customer. But recognizing that one customer may serve literally hundreds of thousands of residents that are in central Kentucky. Okay. And now, as it relates to you all's relationship with Blue Grass Water Supply Commission, this proposal, the one that you have out in front, how many, besides us, how many folks from the Blue Grass Water Commission have you sat down and chatted with and showed this to? I would say in the last five to six months, we have not had any formal meetings with the Blue Grass Water Supply Commission. Now, members are here today. I saw Don Hassel. I think he's still here. And he has seen a number of these presentations. And certainly, everybody has access to all the hearings and the proceedings that were before the Public Service Commission. So, essentially, what we have not done is we have not been invited back to the Blue Grass Water Supply Commission since the hearing because we've been busy essentially providing information through that hearing process with the PSC. Okay. But what I want to recognize is we have engaged in a significant amount of discussion with Frankfort, the Frankfort Plant Board, who is a member of the Blue Grass Water Supply Commission. Okay. Don, if it's okay, can I just ask you to come up at that point just so we, as partners in this, we talk so much about a public-private partnership, and it's interesting that the Blue Grass Water Supply Commission is just that, that the PSC has charged us with doing public-private partnership, and we're actually engaged in that and have been. Is that a fair characterization as far as what was just represented as far as this proposal? Are you all, were you all aware of it? Have you had discussions? Was it a matter of just not asking them to come in and so forth? Where do you all fit in? Well, Mr. Heintzman's, his discussion was correct. We've had numerous sit-downs with them and conferences with them over the last five or six years, going back five or six years. We have reviewed, our program manager has reviewed four specific proposals with the Louisville Water, involving the Louisville Water Company. No one has suggested that the Kentucky American Blue Grass Water Supply Plan for Pool 3 has a lower first cost than the Louisville Water Company proposal. I don't think that's ever been an issue. The issue there is that it's, the analogy is almost like owning versus renting. We're looking for an equity ownership arrangement with Kentucky American whereby we can own a part of that facility. The $100.71 per thousand figure that Mr. Heintzman has used and continues to use, we understand that. If and as the joint venture of the Blue Grass Water Supply Commission, Kentucky American proposal is consummated and we have a water treatment plant on Pool 3, we would own five million gallons of that, the BWSC would own five million gallons of that, and we can produce water. Our current numbers for producing water are $0.66 per thousand gallons. So you see that you have a higher cost going in, then you have a lower cost to produce the water once you have the facilities in place. Okay. I probably have, I'm not sure if I've answered your question, maybe I've over-answered it. No, you have. Thank you. I just wanted you to have an opportunity to speak while I was talking about Blue Grass Water Supply. And I find it interesting, your comment about owning water and where we've been over the last few years and that we're looking at a proposal that rents water and somehow that seems so good and it's interesting who in the community out there is asking to rent water and those folks just a few months ago were screaming about local ownership. So I find that very interesting. I appreciate it. Thank you, Mr. Hessel. As far as the financing of this project, Mr. Heisman, you were talking about envisioning, you know, the financing of this and how, you know, this might fit with grants and this and that and the other. And I think that what I find from just a brief historical perspective on this council is that over the last few years in condemnation talks in the Blue Grass Water Supply, we've had council members and community folks say that all these grants are going to be there and we can own it ourselves and so forth. And what we've found is that that's not really the case. We're at war at the national level. We have a governor who's just come out and said we have no money and they're cutting programs right and left and commitments that a previous administration made. So where do you exactly see the grant money? That was the number one on your slide. I'm just, I'm curious because I'd love to find out and I'd love to tap into it myself. What I will say, this is in the context from my membership, my board membership on the Kentucky Infrastructure Authority. And if you recall, Governor Patton put forth an effort back in the year 2000 to get water to all Kentuckians by the year 2020. Since 2000, there's been over $600 million of grants provided for water and sewer projects. The majority has been water for the benefit throughout the state of Kentucky. And that's for both public as well as private water systems that have benefited from that grant program. The funding for that grant program comes from tobacco settlement funds and from coal severance funds, not from raising taxes or general revenue. And my understanding is those sources will continue, even though the state has the current budget concerns. Those sources of monies will continue to be available. So I certainly can't speak for the legislature, but I've heard budget challenges in the past and what I would expect, they will continue to be available, whether it's this year or in future years, grant monies available for water and sewer projects throughout the state. And let me ask you real quick, I missed that. The $600 million figure that has been there, from what year to what year was that? Between 2000 up through 2007. Okay. So, all right. So for seven years, we've had $600 million available for water and for sewer. And we're looking at, you know, a situation where something costs $88 million or $100 million or whatever it's going to be. Again, I see that as a very iffy situation. I appreciate you saying it. I certainly don't want to misrepresent. I'm not proposing at all that the entire project be funded by grants. Certainly not. That would be a pipe dream. Exactly. But what I recognize is that there is grant money available, and I've, after sitting through dozens and dozens of meetings, I can tell you that a regional pipeline solution that connects the two largest cities in Kentucky will be very attractive for grants and will be very attractive for low-interest loans. And I see it time after time with various communities throughout the state of Kentucky for water projects and sewer projects get access to these grants and low-interest loans. And this project is just as worthy and, in many cases, more worthy because of the size and the impact that it has for central Kentucky. So I would not be discouraged by the current situation from a budget perspective because the sources of those funds, the tobacco settlement funds, as well as the coal severance sources may continue to be available in the future. That's good. And I think that if the PSC says no to Kentucky American's plan, then those types of things are, again, really worthy of discussion. I think as a council and as a community, I just, I want to ask some rhetorical questions. I want to ask some questions that cause us to think because, again, we have made this into something that it is not. It is not about a this plan versus this plan and this body deciding that. It is not that. And it is the PSC deciding yes or no to Kentucky American's proposal. And if no, then things like this are immense opportunities. But until they say no, that's not really an option. And so we have to start asking ourselves, you know, how long are we going to sit and study? We've studied for 20-some-odd years, and how long are we as a body going to study? We've heard numerous numbers since July. We've seen all kinds of things all over the place. And I find it interesting that we're going to somehow study all of this here in the next couple of few days and really, really get down to it. You know, how much time should we allow for other interested parties who have another suggestion to come in? Because, again, this is only one intervener. There's seven interveners. There's other parties. How long are we going to give those folks? Are we going to dismiss an LFGCG partially funded study in 2004 that rejected the pipeline idea? Are we just rejecting that outright since we paid for that? And then, lastly, I've been looking at that 2004 study, and what I find interesting is that there were 40 unique water supply alternatives that were suggested in that study. There were seven options on the Ohio River. Kentucky River had eight options. There were existing reservoirs with seven options and new reservoirs with 12 options and groundwater with six options. And at the end of the day, let's just say what it is. The PSC has to decide this case. For them to put it back on us is interesting to me. But what they actually put back on us was to talk about what Mr. Heisman is really saying, which is how can we creatively finance this option, not should we do this? So I was vehemently opposed to extending things 30 days and let's drag this out and so forth. But now that we're here, these are the types of questions that we as a body have to ask and as a community we have to ask. But make no mistake, make no mistake that what is in front of the PSC is not what is sitting here in front of us today. And all of this is all great food for thought if the Kentucky – if the PSC says no. If they say no to Kentucky American Solution, then this is certainly viable. And we've done a good job of our homework and so forth. But not until – and I think we as a body should send a strong message to the PSC, do your job, do the job that the taxpayers are paying you for, or let someone else do it. And what's in front of them is this decision. Thank you. Thank you, Mr. McCord. And Vice Mayor Gray has requested to speak. And I think that's the last request we have. Mr. Heisman. Yes, sir. Dr. Stevens. I heard him. Okay. Why don't you give us some – I'd like for you to give us some context for Louisville entering this competition, if you will. Why in the world would you have come in at what some would characterize as the 11th hour and proposed this deal? Now – and the reason I'm asking that is the context of where Louisville is right now with its capacity. And it's – one time I assumed that there was an overbuilt – an overbuilt capacity and those conditions. And so why is it that you want this business? First, the reason we're here, I mentioned earlier, I characterize it – we were pulled into the process by the Public Service Commission filing an open records request. And we felt in order to be able to defend our record that we needed to be part of the process. Our attorneys told us, you've got to intervene in order to be able to tell your story and be officially part of the record. Otherwise, we would be on the sidelines. So that's the real reason. Now, why are we looking to market or be able to sell water beyond our existing customer base? Which I think is really the main point you want me to make here is Louisville historically was a manufacturing economy – I've mentioned this before – up until 1978, we had very strong manufacturing or what we call industrial water sales. The fact that we had two Ford automobile plants, International Harvester, Philip Morris, and the list goes on. And what we have seen since 1978, we peaked out on our industrial water sales. Those industrial sales are 20 percent of what they were in 1978. So 30 years ago. So we've dropped 80 percent of our water sales for our industrial component of our market segment. We have industrial, commercial, and residential. Now, commercial water sales have made up a lot of that drop in water sales. And that's the reason why we have the reserve capacity. Because the decisions that were made back in the 1950s and 1960s made an assumption that Louisville would continue – the population would continue to grow, there would continue to be a strong manufacturing base, and between the population growth and the manufacturing base, that we would need 300 million gallons a day of capacity. But again, in 1978, that began to turn. And between conservation, between the shift from manufacturing to the service-oriented economy, our board has now made a strategic decision to be able to make that water available to the adjacent communities around Louisville, essentially share the resource that we have already built. Now, that's a win-win. The more water that we sell, it allows us to not have to increase water rates in our community as much. And the more water we sell to the neighboring communities where it's cost-effective, we save those communities for increased water rates as well. So it's really a win-win solution. Okay. And the grants that were being discussed earlier? Yes. Presumably, the same grants would be able to be secured for Blue Grass Water Supply Commission or for Louisville. So we would be chasing the same grant pools if they indeed do exist. Right? That is correct. Both Blue Grass Water Supply and Louisville. That is correct. Okay. But one advantage is by bringing in Shelby County and bringing in Louisville, that influence to our elected officials at the state level is a broader cast through a broader portion of the state of Kentucky. And there's more benefactors. So the larger you can make that pool, the more attractive it is for grant money. Okay. I want to taxi on a little bit of what Council Member Blevins said in his opening remarks. And it's when he was pushing back on you on sharpening your pencil and encouraging that dimension of your proposal. And I think that's an important one because that talks about the purchasing, I would describe maybe as purchasing management 101. But I would also suggest that your wholesale water price is one dimension only of a much larger dynamic in this value proposition. This value proposition is not limited to just the price of wholesale water. In my view, at least, the value proposition has a whole lot to do with two other pretty significant dimensions, attributes, and they both begin with alternative. One is alternative water supply, and the other is alternative water supplier. It's hard for me to escape the 35 years of being in business in this issue and believe that it doesn't really matter whether or not we have two vendors or two suppliers at the table. In my view, any time we can get two suppliers at the table for any activity that we're purchasing, any commodity, any product, any service, the community is going to be better served. The enterprise is going to be better served over the long term. And you said something else earlier when you were responding to Councilmember Blevins, and you were saying in the question, the context was the evaluation that Scott Rubin, the Attorney General's Office, offered, the present value analysis, your R.W. Beck analysis, and Kentucky Americans analysis. And your encouragement in that was that we, that is, Lexington, secure our own independent advisor to help make this analysis. And I think those of us who have been involved in this for the last six months, now in open session and in closed session, we have, some have been encouraging that. I see no way that we can do, as a Council, that we can do in the next 25 days, even close to our responsibility in dealing with the complexities of this issue, the financial complexities, the technical complexities, even the political complexities of it, the organizational complexities of it, absent that independent advisor. And I'm hopeful that, as the clock ticks, that we will look at that carefully. I'm going to be very open about this and say to my fellow Councilmembers and to the Mayor and to the Administration that that's what I'm going to be asking of us, that we do. And we do it just as quickly and effectively with a responsible agent as our advisor as we can. Thank you. Dr. Stevens. Thank you, Vice Mayor. And Mr. Myers. Thank you, Dr. Stevens. Thank you for coming today. And I just have a couple questions for you. The order that we got from the PSC, the Commonwealth of Kentucky, before the Public Service Commission in the matter of, so you know what I'm talking about, right? Although there's many orders, what is the date on that order? Okay, this is the last one that we... Just last week? Yes. It actually doesn't have a date on it. But it's the one we got that put us here today. I believe I'm on the same page with you. Okay. Proceed. On page four, it says, it is therefore ordered that, and if you go to page five, with respect to Louisville Water, number six, it says, no later than January 16, 2008, each party shall file with the Commission a written brief in this matter. These briefs shall, at a minimum, address the issues set forth in Appendix E of this order. So if we go to the last page of this document, we have Appendix E. Have you filed that yet? No, we have not. We received word on Friday from the Public Service Commission and all the interveners did that, in the legal term, is they put a stay, which means those briefs are now not due tomorrow. At least as of this morning, I am not aware of, have they made, have they told us when they will be due? I do not know if they're in 30 days, in 14 days, but all we know at this point is they are not due tomorrow. We have assembled a draft of our brief and we will submit that at the deadline. Okay. So you have answered the questions in Appendix E? Yes. We have answered all the questions that we're responsible for and the ones that were due on January 9th, I believe it was, those have all been submitted, really, by all the interveners and the responses are all now available. The next, the only final part is the briefs, or essentially the final arguments were originally due tomorrow and that has now been suspended and we're waiting to hear from the Public Service Commission of when they will be due. Okay. But you said you have answered them? Yes. We have a complete draft and I have, I don't have it with me, but we have a draft that is available and ready to submit. Okay. What I'd like to do is read to you the first question, realizing that you don't have your draft with you, if you could maybe summarize what, to the best of your ability, your response is. First question is for Appendix E, does the Louisville Water Company have the legal authority to make wholesale water sales in the counties other than Jefferson County and those counties that are contiguous to Jefferson County? First of all, I want to qualify, I'm not an attorney and it's asking, you know, a legal question. Certainly, we believe that we can serve into all the adjacent counties and beyond is our position and that's what we will provide. If we go back to this proposal, it's really an issue because we're not going to have ownership. Vince is pointing out a good point. Our proposal, that question came in, we were a little bit puzzled by it because it asked about our ability, our jurisdiction outside the adjacent counties. If you read the statute, clearly it mentions Louisville, Jefferson and the adjacent counties and our proposed delivery point and ownership is in Shelby County. So at this point, we're not proposing that we would own outside of Shelby County. It's something we can certainly pursue, we believe we have a right to do so, but it's really a moot point with respect to the proposal that's on the table. Does that make sense? No, it doesn't. Okay. Let's engage a little bit more in discussion then. So restate your concern. Okay, the question that the PSC asks you to answer is, does the Louisville Water Company have the legal authority to make wholesale water sales in counties other than Jefferson County and those counties that are contiguous? So it's not speaking about ownership, it's speaking about the legal right to wholesale. And we believe we do because of the statute that exists. And what we're doing is proposing that we deliver the water in Shelby County. And so that we think that sufficiently answers and is consistent with what the existing statute. So the answer to that is yes. Okay. The second question is, does the Louisville Water Company have the statutory authority to construct, own, and operate a water transmission main in counties other than Jefferson County and those counties that are contiguous to Jefferson County for the purpose of making wholesale water sales in counties other than Jefferson County and those counties that are contiguous to Jefferson County? Let me do this at this point. It sounds like what you're wanting us to do is go through each one of those answers. There's only two questions. That we're prepared to file. And rather than that be part because our testimony is not due until the PSC says it's due. So this time what I would do is respectfully decline to respond to each one of those. We will believe that will be part of the public record at the point that the PSC determines that it would be. But at this point, because I'm, first of all, I'm not an attorney and those are legally based questions, I don't feel real comfortable without my legal counsel present to be able to advise me. So I think the best thing to do would be to wait until those are all due and then the public and Lexington is an intervener in the process. You'll get copies of our responses using the legal process. Okay. That's fair enough. That's all I have for you, sir. Sure. Thank you. Mr. Barbary, could I have you come forward for a second, please? Thank you. I guess I have just a couple simple questions for you. I think you've already answered these before, but under the current condition, is the Louisville Water Company under the authority of the PSC with respect to rate increases? Under the current situation, my understanding is you all don't have the type of contracts with a regulated utility. My understanding from what was represented factually is the Public Service Commission does not currently regulate the rates of the Louisville Water Company, if that's what you're asking. That's what I'm asking. I think I want to clarify. The Public Service Commission does not regulate our retail rates, but they do regulate our wholesale rate that is sold to an entity that is regulated by the Public Service Commission. So if we would enter into a wholesale agreement with Kentucky American... But you don't currently have one, right? Yes, we do. And so what I want to relay is that we currently have wholesale arrangements with the West Shelby Water District, which is regulated, and we have a contract with the North Shelby Water Company, which is regulated, and also the Nelson County Water District, which is regulated. So we do have existing contracts that are regulated by the Public Service Commission on the wholesale rate. Okay. Thank you. So my second question would be, and you may have just answered it, if the PSC were to first reject Kentucky American's proposal that's before them today, and then they decided to adopt a proposal that Louisville Water put forth, who would the rate payers of Fayette County under Louisville Water Company's plan be beholden to when it comes to rate increases? I'll try to answer that as best I can. If you are to assume that the partner on the retail end is Kentucky American, what would happen is there would be an approval of the wholesale rate as part of a contract with Kentucky American and Louisville. With respect to how that gets passed on to the consumers, I don't know that there is a certain... That could potentially be addressed in a number of different ways, I think. I don't anticipate that it would necessarily be a flat fee increase on your water bill. It would likely be taken care of as part of a corresponding rate increase in a rate case that would reflect the wholesale rate contract. Okay, one more question. I'm trying to read what it says. Has Louisville Water Company had a talk with Kentucky American Water regarding that scenario? Thank you, Mr. Barbary. No, we have not had recent discussions. I can only relate discussions going back to 1997, 1998 about the process that would take place and essentially what we were proposing at that time, where we have a contract with Kentucky American. Kentucky American is regulated. The rate would be regulated and what we would do is get the process by which rates are increased, approved and blessed by the Public Service Commission as part of the deal. So essentially, the Public Service Commission would be the approving authority for those rates. And so that was a discussion in the context of 10 years ago and I would assume the same process would take place in the event we entered into a contract with Kentucky American. So to the best of your understanding of that process, would that then mean that you would go to the PSC for a rate increase? Yes. What would happen is the Public Service Commission would have to approve any contract between the Louisville Water Company and Kentucky American and then rate increases or the formula or the methods by which the rates are increased would also have to be approved. So your citizens would be protected as they are now through the Public Service Commission process. Okay. I think that's all I have. Thank you. Thank you, Mr. Myers. And thank you for coming today. We appreciate you. I know it was an effort to get away from your own board meeting and we appreciate it and I hope you've collected the questions that need to be answered. You're welcome. I want to make sure that a couple of follow-up items that we have with respect to some of the questions that the Councilmember asked earlier, I will go back and we'll look. I understand your concern about the current $1.71 rate and where the Attorney General's expert looked at and you're looking for is there a way to make our proposal more financially attractive. And so I understand that. We'll go back and see what we can do to make it more attractive. The other is I fully respect and understand that reserve concept about making sure that there's adequate capacity of water being able to be provided to Central Kentucky. So I want to make sure we will follow up on that and be responsive to the Council. And we look forward to continuing to work with you and work with the different entities for public financing and the Transportation Cabinet and we'll keep in contact with you relating to our findings. So thank you very much for our opportunity today. Thank you. All right. We'll get back to Council reports. Councilmember Gordon. Thank you, Mayor. I have two brief kudos I wanted to give. First I wanted to congratulate Melinda Milburn who finished the Disney Marathon. She is a great inspiration to those of us who don't run and I'm sure we'll hear more about it when she comes back to work tomorrow. And second I wanted to just publicly thank Councilmember Richard Maloney who has resigned from the Council and that was made public today. He served 14 years on our Council and I really appreciate that I had the opportunity to serve with him almost 10 of those years. I think his heart is always in the right place and he gets very passionate about things and is a unique character but I really wanted to publicly thank him for his service and tell him he won't be missed. Councilmember Blues. Thank you, Mayor. I think I have to say that Councilmember Gordon has probably run more races than Ms. Milburn and probably has won more of them but true enough Melinda is an inspiration to us and we'll see if she comes back limping tomorrow. And I also wanted to say a kind of farewell from Council to Richard Maloney. For several of the years when my Meadowthorpe neighborhood was in the 11th district Richard represented us ably and with great good will was always responsive to the concerns and was an inspiration I think to some of us who are here today. And I think that we will miss his quiet understated style around the horseshoe. And so Richard we wish you well in Frankfurt. And one thing more I do want to announce the second district neighborhood association president's meeting that will take place tomorrow night at the Meadowthorpe community center will be as is customary now from 630 to 7 a bit of a social hour with light refreshments. Seven o'clock the meeting will begin and we'll be meeting tomorrow night with Mayor Newberry. I know he'll be anxious to hear what the representatives of our neighborhoods have to say and I think he'll have some interesting things to say to them about how he sees northwest Lexington in the picture of the bigger city. So I look forward to meeting with all of the presidents tomorrow night. Thank you Mayor that's my report. Vice Mayor Gray. I will add to the tributes to retiring council member Maloney as well. I guess it's already been described so well as understated. Was that it? Tom has understated character. I don't know how if you decide to take up residence council member Blevins in that chair I believe you're going to have to start waving your arms a little bit more. But I think in seriousness Richard had a Richard has had an extraordinary impact clearly on the city, on his district, his constituents in his district. It's hard to go into his district and not discover people who have been the beneficiaries of his interventions, his support, his help wherever you go. I have to thank Richard for mentoring me and I suspect some others who are on the council as a first time members this year. I particularly have to thank him for introducing me to Maureen Watson. That was a big gift and I think Tom you got a little help there too from Richard didn't you? In any event I know that we all will miss him and wish him certainly well in his new role whatever that may be if it has in fact been announced. I have three other items to mention. One the town gown commission is meeting tomorrow, first meeting of the new year and consistent with council member James' suggestion earlier we will be distributing minutes of those meetings this one shortly to all council members. The student housing task force which planning committee recommended to be formed, the appointments for that will be made in the next week or so, been consulting with several of you all on that. Anyone who has any suggestions, Dr. Stephens has contributed to that significantly in making some suggestions so anyone who has any suggestions please let me know or let Dr. Stephens know. Council member Maloney will be retiring of course in his role as chair of intergovernment and I would like to welcome council member James who has been the vice chair into that role and she presided today. Fortunately we had a longer meeting than Richard usually would preside over and we would some kind of get after him about that. We got a lot of work done today. Thank you mayor. Council member Blevins. In honor of Mr. Maloney I move approval of the neighborhood development fund list for this week. So moved. I have a motion second to approve the NDF. Any discussion? Those in favor please vote aye. Aye. Opposed no. Motion carries unanimously. That's all I had mayor. Council member Crosby. Thank you mayor. First and foremost I want to thank you publicly, I have not done this yet, for doing a district tour in the 7th district right before the holiday. I really appreciate you coming out and touring the district and of course whenever you come to the 7th district I know between visiting Richmond Place and the schools they make you pretty much feel like a rock star. So thanks so much for coming. That was a lot of fun that day. And on January 25th I want to make an announcement that at the Eagle Creek library we'll be doing a 7th district parks and rec meeting with the neighborhood association presidents. This is going to be with our board representative from the 7th district, Mark Nicolay. So I would encourage all neighborhood association presidents to attend this meeting as well as anybody from the 7th district who's interested in just general things going on with parks and rec in this area. It will be at 4 o'clock again at the Eagle Creek library on January 25th. And last but not least, everybody's kind of beat me to the punch, but I too want to wish Richard the best of luck in his new position in Frankfort. Richard has been so much fun to serve with. He kind of took me under his wing as well. Sometimes he liked to give me a hard time, but he was so much fun and the only thing I can say is I really wish he would have been here tonight because we would have had cake. So Richard, if you're watching, you missed out. Thanks so much. Councilmember James. Thank you, Mayor. The Kulivan Apartment Association will meet on Thursday the 17th at 5 o'clock and we'll be meeting at Pilgrim Baptist Church. If you have any questions about the location of this meeting or would like to add agenda items, please call my office at 258-3216. Also, I'd like to move to place in the planning committee the final draft of the report of the long-term planning committee for the Eastern State Hospital property. Back when Vice Mayor Scanlon was on duty, he appointed a committee to look at some long-term plans for the Eastern State Hospital property and there is a final report out of that committee. So if I can get a second on that. Thank you. I have a motion to approve the long-term planning committee for the Eastern State Hospital to the planning committee. Any discussion? Those in favor, please vote aye. Aye. Opposed, no. Motion carries. Thank you. That's all that I have. Thank you. Councilmember McCord. Just real quickly, tonight at 7 o'clock, the Windham Downs Neighborhood Association will have their annual meeting. Thank you. Thank you. I have a, the bad news is I've got a Mayor's Report, the good news is it's shorter than Dr. Stevens. Commissioner Coe, if you would come up. We have recently compiled the financial data for the fiscal year to date through the end of December and I think it is worthwhile for the Council to be apprised as to where we stand halfway through the fiscal year. So I have asked Commissioner Coe to give you a real quick rundown on that and then I've asked Rama Dwaraha to also come up and participate with a little bit of an update on STARS, but quick one. Thank you. I think for the financial report, the first thing I'd like to point out is that this still says draft. Some of the minor things that we do at month-end closed still haven't been done, so while the numbers should not change materially, they may change a little bit. But I think it's important at this juncture that we kind of reflect on where we've been and where we need to go. You've probably noticed that we're halfway through the year and we're about 47 percent collected on revenue and there are some troubling signs in our revenue right now. The big three, the licenses and permits. If you look at the budgeted increase for withholding, which is the largest of the three that falls under license and permits, we're budgeted to increase 4.8 percent. Right now we're at 3 percent. The net profit is budgeted to increase by 5.5 percent. We're down 10 percent. Insurance is budgeted to increase 7.8 percent and it's flat. Everything you've been reading about the state and what's happening in Louisville, the figures seem to indicate that it's now hitting us. I think when the mayor spoke with you last about our financial condition, what we typically see is that we lag the state by several months on what happens there and then we're a little slower to come out of whatever slowdown we might see. I will say, though, that the past is not always a great predictor in our revenue. Bill O'Meara and I have worked long and hard over the numbers trying to figure out trends and patterns and that kind of thing. You know, while you can see a few things here and there, there's just not a consistent pattern among any of our revenue sources. But I do think that what we see right now, the fact that we're halfway through the year and that we're not meeting our budgeted projections on any of our revenue, is cause for us to consider a slowdown in spending. And speaking of spending, you'll notice that we are lagging a little bit in spending, too, which is a very good thing. There are a couple things I need to point out, though. Under personnel, one of the things that hits us in January, so that we can't really take a 50-50 snapshot here, is the checks that go out for sick payments. And that's about $4.5 to $4.8 million that will hit in January. So the second half of the year is really a little more, you would expect more of your personnel expenditures to be in the second half than in the first half. So if you actually moved that single expenditure back into the first six months, we'd be at about 48 percent in personnel. And that's a very good place for us to be, but that in and of itself can't keep us out of a year-end problem. Operating expenses are at about 39 percent, and those are things that we can slow down, that we can get a handle on. So we'll be working with the mayor to determine exactly what steps we will take to slow down expenditures consistent with our slowdown in revenue. And I'll have to speak, I guess, to the carry forward that's budgeted at $13,500,000. And I still don't know if that's a good number. And I'm sorry, I apologize, but we are still working through our problems in FY07. We have not yet closed. A number of the modules have already been turned over to the auditors, so the auditors are working. Our last component to get turned over is revenue, and I've spoken with each of you so that you know that we had a terrible revenue problem in the implementation of STARS. And we have actually reimplemented that module beginning in June. The numbers that we're seeing in 08 look fine. They're hitting the general ledger like they should. Everything seems to be fine. But we are still cleaning up the data transaction by transaction in FY07. We could have turned our back on that bad situation in 07 and said, we've got to have a number, we're moving forward. And I made a decision not to do that. I think the time that we're going to invest right now and the fact that we're definitely behind the eight ball right now, I think is time well spent for the future. I wanted FY07 to be a year that was representative of our revenue by month. And had we simply closed the books, we never would have been confident of where we actually were in FY07. That said, during the cleanup, we did not find anything that we would consider a major alarm. And at this point, I don't have any reason to believe that the $13,500,000 number will not hold. So we're moving forward, assuming that number is secure. By this time next month, we'll know for sure. The other thing is that when you look at last year, though, in operating, backing up to operating, and I should have said this a minute ago, I'm sorry. Our operating this time last year was at 35%, and we're at 39%. Now that could be a good thing. Because last year, early in the year, folks didn't really do a very good job of encumbering funds in the system because they were having so many problems in STARS. People were afraid to put things on. So we're seeing a lot of money encumbered, which on this report is an expenditure. So I don't think we're really that much ahead on operating as it might look like we are. I'd be glad to take any questions. Are there any questions anybody would like to raise with Commissioner Coe right now? I know it's late in the day, but I still thought, since this information was current as of Saturday, I think, I wanted to go ahead and try to get it to you so that you'd be aware of where things stand. I'd like to add one more thing because we are going to try to do this monthly with you. One of the processes that we're going through right now is cleaning up old purchase orders that have money encumbered on the system. So we might actually see our expenditures, if you were watching it on a daily basis, you might actually see our expenditures decreasing because there are some old purchase orders that were rolled from the old system and we're trying to clean those up. As we liquidate those, it reduces the expenditure column. So I don't want to come back, I don't know what the effect of that is going to be, but I don't want to come back next month and it look like we haven't spent any money because, and I'll try to separate that out for you, but we are going through that process of cleaning up some really old things that are on the system. That will reflect in the expenditures. Unless there are any questions, we'll let you off the hook. Thank you. We also wanted to give you an update on STARS, but given the hour, why don't we roll that into next week, if that's okay, unless somebody is dying to hear that right now. Let me also express my personal regret that I won't have the opportunity to work with Council Member Maloney quite so frequently in the future. He has been a delight and has contributed in a number of different ways to the success that we have enjoyed in the last year and I'll miss having him sitting here to my left. However, I tried to reach most of you this afternoon to let you know that I anticipate appointing Peggy Henson to serve the unexpired term of Richard and some of you may have some voicemail messages on your cell phones. I finally figured out several of you were in an Intergovernmental Committee meeting this afternoon, so I quit making phone calls when that finally became apparent, but I did want to give you a little bit of a heads up. Peggy is a native of the 11th District, has lived there all her life, has served as President of the Cardinal Valley Neighborhood Association, is currently an officer there and has been actively engaged in a lot of the issues in that neighborhood and for those of you who don't yet know her, I look forward to you having a chance to meet her. I believe that's all I have. That takes us down to public comment. Does anyone wish to address the Council on a matter that's not on the agenda? Seeing none, Council Member Blevins. Thank you, Mayor. I have to get my specs on here. I move pursuant to KRS 61.810 subsection 1C to go into closed session for the purpose of discussing pending litigation against the Lexington-Fed Urban County Government. Second. I have a second and a motion. Second is for Council Member Gordon. Any discussion? All those in favor, please vote aye. Opposed, no. Motion carries. I've been thinking about the things that we said late last night. But never for a word I'll say. Just didn't call my ride anew. So afraid that I found somebody new.