Wednesday, July 18, 2018

Council OKs paying off debt for sewage-treatment plant, saving money that will be used to lower customer bills

By Sarah Ladd
University of Kentucky School of Journalism and Media

The Midway City Council decided Monday to grant Mayor Grayson Vandegrift’s request to pay off the sewage-treatment plant’s bond issue and eventually lower sewer bills for Midway.

Vandegrift sent a letter to council members on Friday asking them to consider cashing in one of the city’s three certificates of deposit to pay off the $196,885 left on the wastewater plant. The city has been paying $30,000 on the debt twice a year, plus $9,000 in interest and fees to the Kentucky Infrastructure Authority, a state agency.

Paying off the bonds will use 42 percent of the city’s CD savings of $473,483. The city’s annual budget is about $1.1 million. The CD that the mayor plans to cash in is worth $285,490. The remaining $88,605 after paying off the treatment plant would be rolled into a new CD, he said.

The city’s three CDs are now worth a total of $473,483. With the council’s approval of paying off the wastewater plant, that number will decrease to $276,483. Vandegrift pointed out that the city is paying more in interest on the debt, 3.8 percent, than it is making on the CDs.  

Council member Bruce Southworth said, “Anytime we can avoid paying interest is a good thing.”

City Clerk-Treasurer Phyllis Hudson said after the meeting that the CD being cashed in is paying 0.6 percent. Based on CD interest payments Vandegrift mentioned at the meeting, the one for $125,000 is paying 0.3 percent; and one for $58,000 is paying no more than 0.5 percent.

With the plant debt paid off, the city will save at least $9,000 in sewer revenue each month, which, Vandegrift reiterated Monday, should lead to lowering sewer fees by “at least 25 percent . . . in a few months.” He said lowering these fees has been a goal for a long time, but “what I did not expect is it to be this soon; but it’s a great thing . . . something that literally affects every single person in the city in a positive way.” Sewer fees are based on the amount of water used.

“It’s the fiscally responsible thing to do,” Vandegrift added, noting the city’s “healthy” general fund, which has been boosted by payroll taxes from new business and industry.

Vandegrift thanked the council (member Sara Hicks was absent) for approving the motion and said that he has received many messages from the public thanking him for working to lower bills. “Some people have said ‘I never thought I’d see this day’,” he said. “It’s been a community effort. … Thank you all very much.”

Other Business: The council tabled a funding request from extension agent Elizabeth Coots and the Homemakers and 4-H clubs for their 13th annual backpack project, which provides Woodford County students with basic school supplies. The council has $1,100 remaining in its donations budget, and Council Member John McDaniel said, “We have two backpack programs in Midway through the Presbyterian church and the Baptist church, and I would rather that money go to the programs here in Midway.”

Christian Juckett, a bond attorney with Rubin & Hays in Lexington, and Amanda Hale, development director at The Lexington School, asked the city council to again issue tax-exempt municipal bonds on behalf of the school, this time to finance a new learning center. The city would not be responsible for the $5 million in bank qualified debt, Juckett explained, but would serve as the catalyst for issuing the debt.

The Lexington School uses Midway as a financing tool because state law allows such bonds to be issued only by local governments that issue less than $10 million in bonds in that year, and Lexington issues more than that, Juckett said. He said 19 of the 600 students at the private school, and 13 staff members, are from Woodford County, and Hale said she is a native of Midway.

Vandegrift invited Juckett and Hale to return at the council’s next meeting, July 30, for a formal vote on their request.

Midsummer Nights on Main: Following the June 29 Midsummer Nights in Midway traffic arrangement that allowed the closing of the north side of East Main Street, the council agreed to follow that precedent for the next event dates, July 27 and August 24.

“I think it went very well,” Vandegrift said of the arrangement. He said the crowd seemed bigger this year, and “people fit better.” 

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