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MERGER? Shepherdsville, MSD holding sewer talks

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By Thomas Barr

 SHEPHERDSVILLE - The city of Shepherdsville struck up a deal with Louisville Water Co. about 10 years ago that was lauded as one of the best decisions ever made.

Now, in 2012, could the city leaders have the opportunity to make another landmark merger with another major service provider?

Shepherdsville is currently under negotiations with Metropolitan Sewer District in Louisville on some fashion of a merger.

Shepherdsville mayor Scott Ellis termed the talks “very early” but said there are some very attractive options available to the city.

Brian Bingham, regulatory services director for MSD, and Amber Halloran, vice president of finance for Louisville Water Co., spoke recently with members of the Shepherdsville City Council.

Bingham said that there are options for a partnership with the city and MSD. The Louisville entity, which is being merged with LWC, could provide wholesale sewer service or it could lease the system or it could acquire the entire system. The city could also have the possibility of privatizing its sewer operation.

Under a previous agreement with LWC, the city gave control of its entire water system, including maintenance.

Bingham said that MSD could undertake a similar agreement with the city, if that is the desired option.

He said forming an advisory board, similar to one undertaken when LWC merged with the Kentucky Turnpike Water District in Bullitt County, would be suggested. That board would bring forth issues or concerns of city customers.

Currently, Bingham said MSD handles customers in Jefferson County and in Crestwood. It system includes 17 treatment plants and six regional plants.

In the past, MSD has come under the eye of federal EPA officials, who imposed stiff penalties and requirements for system improvements. Bingham said those are being addressed.

From the city’s standpoint, the first question might be what would happen to the current employees if the sewer system were taken over by MSD. Bingham said there would be no plans to cut any staff.

When told that the city’s crew was already 3-4 employees short, Bingham said that was not uncommon with smaller facilities.

While the city has over $28 million in debt associated with the new sewer plant and construction of an interceptor line across Salt River, Bingham said that it not something that would scare MSD.

Councilman Larry Hatfield was concerned about rates, especially after Shepherdsville increased prices by an average of 66 percent.

Bingham said there might be a way that current rates could be dropped.

For a customer using 6,000 gallons a month in water, the current city bill would be $53.32. For MSD customers, that would be $37.91 and the national average would be $36.18.

Halloran said that when the 2000 merger with KTWD occurred, rates were frozen since they were already higher than LWC. Over the past 12 years, millions of dollars of line extensions were done and rates will eventually be lowered to meet those in Louisville.

Besides the costs, Halloran said LWC was able to provide reliable service with high customer satisfaction.

Hatfield hoped that Ellis would form a committee to have further discussions on the issue.

Robert Flaherty and Faith Portman offered to join Hatfield on the committee.

Flaherty, who served as deputy county judge/executive when the water merger with KTWD was undertaken, said it was an excellent process. That allowed hundreds of unserved residents to receive water in the county.

The city’s agreement in 2002 with LWC was also seen as a major step forward. Previously, the city was purchasing water from LWC.

But during the Joe Sohm administration it was decided to allow all of portions of the operations to be undertaken by LWC.

Currently, LWC is the billing agent for the city’s sewer bills.

Attorney Joseph Wantland said he would love to see LWC set up an office in city hall to allow customers an opportunity to pay their bills. Currently, LWC has an office on Burkland Boulevard in Hebron Estates.

Down the road, Bingham said that the talks of a regional plant might resurface.

Several years ago, talks of constructing a major treatment plant on the Salt River near Fort Knox were held. However, the idea later went on the back burner.