Mayor Grayson Vandegrift told the City Council this evening that Midway should run a water line to the Duckers area so it can buy wholesale water much more cheaply from the Frankfort Electric and Water Plant Board instead of Kentucky American Water Co.
Following are Vandegrift's remarks, as prepared for delivery, followed by additional comments and a report on other action at the council meeting.
"As you know, I have been looking into our options as they pertain to our wholesale water supplier. In 1985 the city signed a 40-year contract with Kentucky American Water, meaning that this contract will expire in 2025.
"It is the opinion of our city attorney and his associates that the contract is, at least for now, a valid one. The Kentucky Supreme Court has a case before them which argues that such a contract shouldn’t be valid because Kentucky American should be considered a franchise, not a utility. That case is unlikely to be overturned, and even if it were, the planning for an endeavor such as switching water providers would be a process that could take that long time regardless.
"I have been in discussions with executives at the Frankfort Plant Board, including their chief engineer, and they have assured me that they are ready, willing, and able to sell us water at a wholesale rate. Their current rate for wholesale customers is $2.55 per 1,000 gallons. We currently pay Kentucky American $4.21 per 1,000 gallons. That means we could get water for 40 percent less than what we’re paying now, and we could conceivably cut water rates for our citizens and still flood our water fund with new revenue for infrastructure improvements. And this is before the Public Service Commission rules on the current rate increase Kentucky American has asked for. Who’s to say how many more increases they’ll have received by 2025?
"We owe it to our citizens to find a source of clean, potable water at a reasonable price, and this seems like a no-brainer. We will be responsible for running a water line to the Duckers area, less than two miles from Midway, to hook in with the Frankfort Plant Board’s 20-inch supply line.
"This is a large initiative but one that will have an immediate and long lasting impact on our city and its residents for many years after we’re gone. It is my firm resolve that we begin now the process of switching water suppliers so that come 2025 we’re ready to flip the switch and begin drawing our water from a local, municipal-minded utility as opposed to a publicly traded profit making entity. It has become abundantly clear that Kentucky American’s business model is going to continue to be based on frequent rate increases. To me, that is unacceptable, and we shouldn’t let ourselves be held for ransom every time they decide they’re not making their executives and shareholders enough money at the expense of the rest of us.
"Therefore, I’m asking that the Public Works and Services Committee, consisting of Council Members John Holloway, Kaye Nita Gallagher, and Bruce Southworth as chair, to begin the process of laying out a plan with logistics and probable costs so that on that day in 2025, we’re ready to sell good water at a greatly reduced price. I will be heavily involved with the committee’s work, but will also respect their autonomy as a committee of our legislative body. The committee should consult with the Frankfort Plant Board as well as our engineers and/or consultants we may hire to achieve our goals.
"When we lowered our sewer rates by 25 percent I told you that in my opinion, that was just the start. Significantly lower water bills in Midway, once thought by many to be a fairy tale is now underway, with this even bigger step firmly within our grasp. We have the money and the flexibility to finance this project in a cost-effective way, and one could argue the savings alone would finance the project to come within several years. I hope that the city council will enthusiastically join me in beginning this plan, while keeping all options on the table as we go, so that we can finally realize that long sought after dream, and conclusively turn a fairy tale into a reality."
Vandegrift added that he would "keep all options on the table," because construction of the supply line would require research and purchase of easements, and he said he does not believe eminent domain, or condemnation, should be used for the project.
"It would be a complete sea change in the way Midway utility bills work," Vandegrift said. He said he would welcome a counter-offer from Kentucky American, but "They don't care about Midway."
Budget nears approval: The council heard first reading of the budget for the fiscal year that begins July 1, which it had agreed on at three budget workshops (details here and here). It plans to hold a special meeting at 5 p.m. Thursday for second reading and passage.
Vandegrift thanked Assistant City Clerk Sonya Conner and former assistant clerk Diane Shepard for their work on the budget, which included "figuring out from scratch how to get into ordinance form," following the retirement of Phyllis Hudson as city clerk-treasurer.
For a PDF of the budget ordinance and the rest of the council's meeting packet, click here.
Sidewalk bids in: Vandegrift said the city had received two bids for sidewalk repairs, about $39,000 and $42,000, which he would present to the council at its July 1 meeting. He said he would ask the council to increase the city's maximum contribution to each job to $1,500 or $2,000, from the current $1,000. The city splits the costs with property owners, but its contribution is capped.
"When we set that one thousand, we didn't quite know what the scope of it was," he said. Even with a higher cap, he said, "It'll be more fair, but they'll still pay their share."
Events: The council approved event permits for the 45th annual Midway Fall Festival, to be held Sept. 21-22, and the Bourbon Country Burn bicycle tour, which is expected to bring 1,000 riders to town on Friday, Sept. 27, when riders will follow various courses from the Lexington base camp to distilleries in the Frankfort area.
Fall Festival coordinator Elisha Holt said the festival needs to hire off-duty police officers to direct traffic. Vandegrift said he would discuss that with the Versailles Police Department, which covers all of Woodford County. Holt said the festival's new partnership with the Iron Horse Half Marathon on Sunday, Sept. 22, will bring more portable toilets to the festival, a total of 28.
She said organizers of the foot race want to start music at 8 a.m., but Vandegrift said, "I wouldn't push it" because there are already some misgivings about combining the two events. All present went along with a suggestion by Council Member Sara Hicks that the music be acoustic, not amplified.
Following are Vandegrift's remarks, as prepared for delivery, followed by additional comments and a report on other action at the council meeting.
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| Kentucky American Water Co.'s connection to the Midway water system |
"It is the opinion of our city attorney and his associates that the contract is, at least for now, a valid one. The Kentucky Supreme Court has a case before them which argues that such a contract shouldn’t be valid because Kentucky American should be considered a franchise, not a utility. That case is unlikely to be overturned, and even if it were, the planning for an endeavor such as switching water providers would be a process that could take that long time regardless.
"I have been in discussions with executives at the Frankfort Plant Board, including their chief engineer, and they have assured me that they are ready, willing, and able to sell us water at a wholesale rate. Their current rate for wholesale customers is $2.55 per 1,000 gallons. We currently pay Kentucky American $4.21 per 1,000 gallons. That means we could get water for 40 percent less than what we’re paying now, and we could conceivably cut water rates for our citizens and still flood our water fund with new revenue for infrastructure improvements. And this is before the Public Service Commission rules on the current rate increase Kentucky American has asked for. Who’s to say how many more increases they’ll have received by 2025?
"We owe it to our citizens to find a source of clean, potable water at a reasonable price, and this seems like a no-brainer. We will be responsible for running a water line to the Duckers area, less than two miles from Midway, to hook in with the Frankfort Plant Board’s 20-inch supply line.
"This is a large initiative but one that will have an immediate and long lasting impact on our city and its residents for many years after we’re gone. It is my firm resolve that we begin now the process of switching water suppliers so that come 2025 we’re ready to flip the switch and begin drawing our water from a local, municipal-minded utility as opposed to a publicly traded profit making entity. It has become abundantly clear that Kentucky American’s business model is going to continue to be based on frequent rate increases. To me, that is unacceptable, and we shouldn’t let ourselves be held for ransom every time they decide they’re not making their executives and shareholders enough money at the expense of the rest of us.
"Therefore, I’m asking that the Public Works and Services Committee, consisting of Council Members John Holloway, Kaye Nita Gallagher, and Bruce Southworth as chair, to begin the process of laying out a plan with logistics and probable costs so that on that day in 2025, we’re ready to sell good water at a greatly reduced price. I will be heavily involved with the committee’s work, but will also respect their autonomy as a committee of our legislative body. The committee should consult with the Frankfort Plant Board as well as our engineers and/or consultants we may hire to achieve our goals.
"When we lowered our sewer rates by 25 percent I told you that in my opinion, that was just the start. Significantly lower water bills in Midway, once thought by many to be a fairy tale is now underway, with this even bigger step firmly within our grasp. We have the money and the flexibility to finance this project in a cost-effective way, and one could argue the savings alone would finance the project to come within several years. I hope that the city council will enthusiastically join me in beginning this plan, while keeping all options on the table as we go, so that we can finally realize that long sought after dream, and conclusively turn a fairy tale into a reality."
Vandegrift added that he would "keep all options on the table," because construction of the supply line would require research and purchase of easements, and he said he does not believe eminent domain, or condemnation, should be used for the project.
"It would be a complete sea change in the way Midway utility bills work," Vandegrift said. He said he would welcome a counter-offer from Kentucky American, but "They don't care about Midway."
Budget nears approval: The council heard first reading of the budget for the fiscal year that begins July 1, which it had agreed on at three budget workshops (details here and here). It plans to hold a special meeting at 5 p.m. Thursday for second reading and passage.
Vandegrift thanked Assistant City Clerk Sonya Conner and former assistant clerk Diane Shepard for their work on the budget, which included "figuring out from scratch how to get into ordinance form," following the retirement of Phyllis Hudson as city clerk-treasurer.
For a PDF of the budget ordinance and the rest of the council's meeting packet, click here.
Sidewalk bids in: Vandegrift said the city had received two bids for sidewalk repairs, about $39,000 and $42,000, which he would present to the council at its July 1 meeting. He said he would ask the council to increase the city's maximum contribution to each job to $1,500 or $2,000, from the current $1,000. The city splits the costs with property owners, but its contribution is capped.
"When we set that one thousand, we didn't quite know what the scope of it was," he said. Even with a higher cap, he said, "It'll be more fair, but they'll still pay their share."
Events: The council approved event permits for the 45th annual Midway Fall Festival, to be held Sept. 21-22, and the Bourbon Country Burn bicycle tour, which is expected to bring 1,000 riders to town on Friday, Sept. 27, when riders will follow various courses from the Lexington base camp to distilleries in the Frankfort area.
Fall Festival coordinator Elisha Holt said the festival needs to hire off-duty police officers to direct traffic. Vandegrift said he would discuss that with the Versailles Police Department, which covers all of Woodford County. Holt said the festival's new partnership with the Iron Horse Half Marathon on Sunday, Sept. 22, will bring more portable toilets to the festival, a total of 28.
She said organizers of the foot race want to start music at 8 a.m., but Vandegrift said, "I wouldn't push it" because there are already some misgivings about combining the two events. All present went along with a suggestion by Council Member Sara Hicks that the music be acoustic, not amplified.
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