Lancaster council gives nod to water 'insurance'

February 10, 2004|JIM LOGAN

LANCASTER - The City Council took its first official step Monday night toward joining a group that hopes to bring water from the Ohio River to Central Kentucky.

In a unanimous vote, the council gave its initial approval to an ordinance backing the creation of the Bluegrass Water Supply Commission, a quasi-governmental group of 11 cities that would build a regional grid of pipes to move the drinkable water.

To this point the group pushing the formation of the commission has been referred to as a "consortium."

The brainchild of the Bluegrass Area Development District, the commission is billed as insurance against future drought or other disruption of water supply.

"How much is an insurance policy worth?" Vernon Azevedo, general manager of the Winchester Municipal Utilities, asked the board.

The pipeline, which would cost at least $200 million, would be financed by bonds and, officials hope, state and federal grants. The commission would pay off the bonds through fees paid by cities for the water.


Lancaster, the smallest of the cities in the commission, would be committed to 500,000 gallons of water daily from the pipeline. Financially, the city would be required to pay for at least 20 percent of its commitment. On a sliding scale based on usage, the council was told that 20 percent is expected to cost about $6 per 1,000 gallons, while using the full commitment would run about $1.83 per 1,000 gallons. The city would be able to sell its water to other agencies.

The commission's other cities would be committed to 1 million gallons a day.

In presentations by Azevedo and Don Hassall, assistant executive director of Bluegrass ADD, joining the commission was sold as a ground-floor investment opportunity for Lancaster. By acting now, they said, the city would ensure itself a voting seat on the commission's board.

"Your continued relationship ensures Lancaster gets equal representation and an equal vote," Hassall told the council. "By sitting at the table today you get the same representation as Lexington."

Hassall sought to assure the council that voting to join the commission would not immediately obligate the city to buying any water. That will come later, he said.

"What is the point of no return?" he said. "I'll just tell you: You're not there."

The city, which gave Bluegrass ADD $2,500 recently for administrative costs associated with creating the commission, will hold a final vote on joining the commission in March.

If the commission succeeds in building the pipeline, it likely won't get to Lancaster for another five years at the earliest, Hassall said.

"You don't have to pay until that water is at the door," he said.

As an insurance policy, Hassall said, the water grid is tapping the ideal source.

"The Ohio River is an inexhaustible supply," Hassall said.

Lancaster is the first city to hold a vote on joining the commission, Hassall said. The other cities considering joining are: Lexington, Cynthiana, Georgetown, Frankfort, Versailles, Winchester, Nicholasville, Dan-ville, Berea and Mount Sterling.

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