The reason it gave was that regional efforts were moving too slowly. But we believe Kentucky American saw a golden opportunity to expand its empire by building its plant and then selling the treated water to other communities.
Rural water districts in Clark County get their water from Kentucky American, and the company has tried to buy up other public systems. A decade ago, for example, Wilmore rejected a proposal by the company to buy its water system because council members knew that if distribution were privately owned, the city would lose its ability to control growth.
But land use isn't the only environmental issue at stake. A for-profit company wants to sell as much water as it can to maximize margins. Yet the shallow Kentucky River is a finite resource that must be managed carefully. We would rather trust Lexington's government, with its good environmental record, than an international conglomerate like RWE AG with its bad one.
Those who say a city-owned utility can't be managed efficiently may be unaware of many facts. First, some of the investors in RWE AG are German cities. Second, 95 percent of big city water companies in the U.S. are public utilities. Many, like Louisville's water company, are operated by professional managers to keep politics out. They can operate at a lower cost because there are no shareholders to pay, and cities can borrow money at lower interest rates than private buyers can.
Advocates of a city purchase say that public ownership would result in a savings of $20 million a year, which could be used to pay off the bond without having to raise rates.
We believe condemnation should be used only sparingly, and never to get private property for less than its worth. But in this case, condemnation is the only way citizens can buy what should be publicly owned because water is an essential natural resource and the company is a monopoly.
Kentucky American is for sale. RWE, which recently purchased the company as part of American Water Works, is trying to spin off its American holdings. Lexington has tried to buy the company, but the company wouldn't negotiate because senior corporate managers stand to gain more from a private purchase.
The city council voted three years ago to begin condemnation proceedings to determine the company's fair market value. But a group led by Vice Mayor Mike Scanlon and Kentucky American negotiators then met secretly and struck a deal to end the lawsuit. Fayette County's citizens later garnered 23,000 signatures to have the issue put on the ballot, and next Tuesday, they will decide whether to restart the eminent domain process.
We believe it is in Clark County's interests, and the interests of all communities in the region, for the utility to be owned by neighbors we know and can influence, rather than for it to be a commodity traded by giant multinational corporations that are not as committed to the Bluegrass and its people.
