LANCASTER — Discussion about a proposed new water treatment plant in Lancaster is continuing following a workshop Monday at city hall.
Attending were Lancaster City Council members, Mayor Brenda Powers, Garrard Fiscal Court members, engineers, community members and others. No one from the Garrard County Water Association was able to attend.
“The point of this meeting was to sit and talk about what we’re doing on the sidelines,” Councilwoman Maggie Mick said. She speculated there has been a great deal of discussion but none of it is being conducted in the confines of a meeting, so no one has been getting the full story. “It’s the blind leading the blind,” she said.
“There’s been a lot of unnecessary dialogue going on,” Councilman Chris Davis said, echoing Mick’s fears. “This meeting should have happened three months ago,” he said, explaining that he believes the City Council and Garrard County Water Association have both been dragging their feet on the issue.
Connie Allen, owner of Salt River Engineering from Harrodsburg, was hired as an unbiased third-party engineer to examine the different possibilities that the city can pursue for the water system and the water rates that accompanied each choice. She presented these at Monday’s meeting.
The plans consider variables, such as Lancaster losing Garrard County Water Association as a customer, partnering with GCWA, merging with GCWA, or connecting the county’s water system to Danville or another neighboring system. Currently, GCWA purchases up 70 percent of the water Lancaster produces.
If Lancaster and the GWCA forge a partnership, water customers in the city of Lancaster could see a 53 percent increase to their bills, from $25.61 to $39.31 per 4,000 gallons, which was used as average monthly volume of water for households and commercial properties. The rates for the GCWA customers could increase by 27 percent, from $23.82 to $30.41 per 4,000 gallons.
If the water associations decided instead to merge, it would mean the two entities would share the debt that was incurred when updates were made to the water systems. Lancaster customers could see a 46¿percent increase, with rates at $37.50 per 4,000 gallons, while GCWA customers could experience an 8 percent increase, paying $25.76 per 4,000 gallons. Rates for other Lancaster customers who are outside the city are not shown in Allen’s figures.
These numbers are not final, but preliminary estimations from Allen, who also gave examples of what could happen if GCWA¿opted, instead, to get water from outside the county. Allen said there are many variables, which would be reflected in the rates, depending on the type of agreement reached between the two organizations.
Allen expressed concerns that, while GCWA stopping all the service it gets from the city is highly unlikely, it is theoretically possible since there is not a written, long-term minimum purchase agreement. If that happened and the city pushed ahead with the project, it could result in major debt trouble for Lancaster.
“You grabbed all the money, but they’ve got the keys to the bus,” Allen said, referring to the $2.5 million grant the city was awarded by the Economic Development Administration.
Others disagreed that the situation is¿so dire. Magistrate Fred Simpson explained that the two water systems are so intricately connected that there is no way GCWA would stop buying water from the city.
“They have to buy from us,” Simpson said.
He and other magistrates attended the workshop because, according to Judge-Executive John Wilson, the Fiscal Court can’t vote on the issue, so it acted as the unbiased funding agent for Allen.
David Schrader, engineer from Bell Engineering in Lexington, which is also looking at the variables involved in the process, believes it would be in the best interest of GCWA to sign the minimum purchase agreement, as it would lock in a low rate for the assocation’s customers.
“For them to walk away is a big leap,” Schrader said.
The agreement is one of the major steps that could halt the process. According to Allen and Schrader, until a long-term minimum lease agreement of at least 20 years is signed between the city and GCWA, the U.S. Department of Agriculture will not approve a loan to the city.
“(The Dept. of Agriculture) did not make you get a long-term water purchase agreement in 2008,” Allen said, explaining that this was unusual, because without that agreement, there is no way of knowing for certain the city will be able to repay the debt. She explained GCWA might not want to sign the agreement, because the association would be limiting its freedom to “shop around” for the cheapest water rates.
Currently, the city has a year-to-year agreement with GCWA but not a long-term agreement, meaning that GCWA could choose to get water elsewhere and then the city would have trouble paying off its debt, according to Allen.
The city began examining the possibility of building a new plant in 2009, according to Powers. Last October, the council secured the $2.5-million grant from the EDA, which stipulates the city has until June 2015 to complete the project or lose the money. Powers remains optimistic the city will reach that goal.
Another deadline, one that is seemingly unattainable, has been set by the Bluegrass Water Supply Commission. The commission has about $700,000, which could be available if the city has a proposed plan by Nov. 15, according to Donna Powell, Lancaster’s representative on the commission.