Members of the Harlan Fiscal Court recently discussed the possibility of combining the county’s two largest water districts, Black Mountain Utility District (BMUD) and Cawood Water District (CWD) to form a Harlan County Utility District.
At a meeting held at the county courthouse, Adam Scott, a representative of the Kentucky Infrastructure Authority, asked why there is not a Harlan County Water District that oversees all of the county’s water system. He suggested this action would benefit the county and would establish one board over all the water districts in the county.
“I think one of the biggest things I hear when I talk across the state is, well, we don’t want to lose jobs,” said Scott. “The positions lost would just be board members. It would still have the same amount of water lines, water treatment plants and provide the same service they do now. You are not cutting people out, you’re just standardizing the system across the county.”
Scott said another county in the state had six separate water districts within their county and they recently combined them making one countywide utility district.
“They are very happy they did it,” said Scott.
Harlan County Judge-Executive Joe Grieshop told members of the court after establishing a countywide utility district, the county can then look at expanding more services in Harlan County, “given the proper structure.”
In a telephone interview with Public Service Commission Director of Communications Andrew Melnykovych, he said, “Procedurally, if BMUD absorbed CWD they would have to come to the PSC to accomplish that.”
“What you would do is create a new entity that would take over both water districts that are already regulated by the PSC,” said Melnykovych. “Any acquisition or merger of a utility regulated by the PSC requires PSC approval.”
Melnykovych added in general the PSC has been supportive of consolidation such as what is being discussed by the Harlan Fiscal Court.
“The benefits of those kind of consolidations is you reduce a lot of duplication in the administration of these districts and typically they are economies of scale and larger entities tend to operate more efficiently than smaller ones particularly in providing water and sewer service,” said Melnykovych. “In theory, what you could realize is some operational cost savings that would then allow you to do any number of things, among them keep rates down or extend service into areas that don’t have service now…”
Scott told the court an attempt was recently made to combine Cumberland, Benham and Lynch water districts into the Tri-City Utility District, but “it didn’t work.”
“Plain and simple they do not want to combine their services,” said Scott. “It will happen. I guarantee those three utilities will become one, one day. It’s because they have fallen apart and gotten in such disarray that someone will have to come in and take over all of them.”
Melnykovych said absorbing Cumberland, Benham and Lynch into a countywide utility district, in theory, could be accomplished. He added, “We’ve had a number of utility districts that have taken over municipal operations in the past years.”
Asking that the issue be tabled to their next meeting, Magistrate David Kennedy said he would like to have input from Magistrates Jim Roddy and Delbert Stephens before making a decision since they were absent during this meeting.
Grieshop continued to push the other magistrates for a decision by the court, saying the absent magistrates should have been present for the meeting. He added Stephens did call and say he couldn’t be there, but that Roddy didn’t “bother to call at all.”
“This is the business of the county not the district,” said Grieshop. “We can either sit here and try not to make progress or we can sit here and try to say whatever. Magistrates are being paid to be magistrates. They need to be here. We only have maybe 15 meetings a year. So, I will respect what you’re saying, but next month it will be brought up again and they better be here. You can give them fair warning because it will be brought up and it will be dealt with.
“Our job is to represent the people of Harlan County. It’s our jobs to move this county forward. Everybody I talk to that wants natural gas. Our county needs this system to come together to bring (natural) gas, plus the water benefits that will come from having a more efficient operation. I’m going to try to push our county forward. That’s why I’m pushing this. Opportunity is coming forward and we need to take advantage of it or we’ll never have gas available in our cities, towns and communities. Gas will bring in industry and future development.”
Stephens was later contacted and he said he was unable to attend the meeting because of a doctor’s appointment he could not reschedule. He added he did notify Grieshop he would not be able to attend the meeting.
“I take my job as magistrate serious and this is the first meeting I have ever missed,” said Stephens.
Roddy responded the reason he was not in attendance at the meeting was because he was on vacation. He added he notified Grieshop two weeks in advance he would not be able to attend the meeting.
“This vacation is taken the same time each year because my wife can only take off work at a certain time,” said Roddy. “Joe could have done a conference call if he wanted to. He could have gotten in touch with me if it was that important.”
When Melnykovych was asked about the process of forming a natural gas utility in Harlan County, he replied, “We don’t regulate government owned gas utilities except for safety. The only gas utilities regulated are the for-profits. We do regulate city or other non-profit gas utilities strictly for safety, but we don’t regulate for rates and service.”
Melnykovych added there is one utility, he is aware of, that is a combined water and natural gas distribution utility — West Lewis Rectorville in Lewis County.
“They are in the process of selling off their gas business, because it’s proven to be a drag on them rather than a benefit to them,” said Melnykovych. “That’s all going to be circumstance specific, so I can’t tell you whether a utility district in Harlan County would be a good idea or a bad idea.”
The issue was tabled until the court’s next scheduled meeting on Aug. 14 at 10 a.m.
Nola Sizemore may be reached at 606-573-4510 or on Twitter @Nola_hde