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LEBANON JUNCTION ee" A water rate increase seems to be inevitable for Lebanon Junction residents.
Just how much that increase might be is still a mystery, but city attorney Mark Edison informed council members in August that if rates weren’t increased quickly the city could risk losing its bonds which funded construction of the city’s existing sewer system.
Edison told the council that the past several years the city failed to comply with its bond issue by failing prove it could fund repayment.
He said there is language in the bond issue that states the city’s water and sewer companies must at least be breaking even.
For many years the water company has not been self-sufficient and has relied upon transfers from its occupational tax fund to finance operations.
Councilman Tim Sanders said in the last 10 years the city had transferred $537,000 from the occupational tax account to fund water operations.
Edison said the city has avoided any penalties for now possibly because of changes in leadership in Frankfort, but as long as it remained out of compliance, the state could pull the bonds any time.
Mayor James “Butch” Sweat appointed a committee to investigate the issue in July consisting of council members Tim Sanders, Larry Dangerfield and Dion Collins, as well as city clerk Susan Crady and Public Works Director Chaz Sullivan.
The committee reported at August meeting a 5 percent rate increase on monthly water usage, tap-on fees and hook-up fees was discussed, but not yet passed.
Sanders said it would take a 30 to 40 percent raise to make up the city’s losses, but the committee recognized it was impossible to ask that of residents during such difficult economic times.
“Everybody on this committee is sympathetic to that,” Sanders said.
Collins said the committee wanted the water and sewer operations to be self-sufficient but wasn’t interested in drawing a profit.
“We’re just looking to break even and get in compliance with the bonds,” Collins said.
The council is expected to pass some type of rate increase at its Sept. 8 meeting at 7 p.m.
Committee members said they would like to see language in the ordinance that automatically passed along rate increases from the Bardstown Water Company, which supplies most of the Lebanon Junction area. Several times in the past the city didn’t pass along such increases, Crady said.
A raise could take customers by surprise since rates have only been raised $2.90 since 1986, Crady said.