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The Lane Report

Lexington's Water Issues
Need Immediate Attention

The Lexington-Fayette Urban County Council has been in a four-week recess through August 15th. The break in regularly scheduled council and committee meetings provides councilmembers with an opportunity to take a vacation and to ponder some of the major issues facing our city.

A few of my "summer recess" thoughts about water issues and local government are summarized below. Please keep in mind that my column is limited in length and these comments are by necessity brief and cannot elaborate on all of the factors impacting this issue.

Government Ownership of the Water Company

From my perspective, the pros and cons of private versus government ownership of the water company are just about equal - if the issue of condemnation (taking by eminent domain) is eliminated. Kentucky American Water Company is not for sale, so the opportunity to negotiate an "arms length" purchase/sale agreement for the business is obviously not an option.

I believe in the rights of private ownership. Government must have strong justification before invoking its right of eminent domain. KAWC provides quality water, responsive service and competitive prices. There seems to be no legal justification to condemn KAWC for the "public good".

A good manager will use every effort to resolve a business dispute before going to court. Good questions to ask before litigating include: Are the facts of the case solidly on your side? Is the probability of winning high (90% plus)? Can your business afford to invest its assets (cash) and the management time required to litigate the issue? Does your opponent have more money than you?

Not many competent business managers that I know would sue a large corporation, with billions in assets, in what is assured to be a long-term and highly contentious and litigious issue. Legal justification for taking the water company by eminent domain is uncertain. Even if Fayette County should win the right to take by eminent domain, the price (when established by the court) may be more than local government can afford to pay.

Lexington recently obtained title to the Lyric Theater after eight years of eminent domain proceedings. At the time this article was written, a court hearing was pending to determine the value of the property. According to court documents, the property value ranges between $125,000 and $300,000. The court will decide.

If it took eight years to acquire a deserted, broken down building by eminent domain, imagine how many years it will take and how much it will cost to condemn KAWC.

A Second Source of Water Supply

Your local government has already expended over one million dollars and thousands of LFUCG employee work hours to condemn KAWC. The cost to taxpayers in cash and wasted opportunities is staggering. Meanwhile, a second source of water supply for Fayette County has not been developed during the last two decades. Allowing the water supply deficiency to languish without resolution is a prime example of your local government's failure to address critical issues. A severe drought would have a devastating and long-range negative impact on the economy of Central Kentucky.

Fayette County has entered into a consortium of nine counties - the Blue Grass Water Supply (BGWS) Commission - to raise the level of dam #10 on the Kentucky River and to develop a new water pipeline between Frankfort and Lexington. The BGWS Commission reports that the least expensive source of a new water supply would be by pipeline from Louisville. It appears that political issues have obfuscated good business judgment. Without regard of the cost to water users, the least expensive plan has been discarded by the Commission.

Fayette County will consume and pay for an estimated 65 to 70 percent of the new water source. Yet, Fayette County only has one vote of nine on the water commission board. The citizens of Fayette County are not receiving equitable representation. The current commission structure is not in the best interest of our community.

Your comments and suggestions are always appreciated.




If you would like to contact Ed Lane he can be reached via at EdLane@LFUCG.com ; and by letter at 200 East Main Street, Lexington, KY 40507.

Councilman Ed Lane represents the 12 th District on Lexington Urban County Council. He is the owner of a commercial real estate services firm and publishes a statewide business magazine.

“I want to conservatively spend our tax dollars,
eliminate waste, and bring sound business ideas
to local government.”

To contact Ed Lane's 12th district council offices, e-mail him at edlane@lfucg.com.