Friday, July 31, 2015

Pendery Rips Sanitation District Spending Priorities

Story & photo by Bryan Burke, associate editor The River City News 



During the Campbell County Mayor’s Meeting in the Fiscal Court Chambers at the County Administration Building in Newport on Tuesday, Judge/Executive Steve Pendery criticized Sanitation District 1's board of directors for its refusal to increase its rates which he says prevents necessary growth to overcome the utility's financial woes.

Pendery said that SD1 is actually losing more money by refusing to increase its customers' rates.
“There are several hundred million dollars worth of projects in Northern Kentucky that would not have been served by the Sanitation Board had the judges/executive not come out to complain about it, because they're focused on never doing a rate increase,” Pendery said. “They are drawing down reserves, there haven't been rate increases and this is in the face of inflation and the fact that they're actually getting less money each year by about one percent in each of the last six years because people are using less water. Water is metered, you pay depending on how much you use, and water consumption is going down, so you would expect there would have been a six percent rate increase just to offset the decrease in water use and that has not happened.”

He said that Northern Kentucky has become the fastest growing job market in the state thanks to intelligent investment in the infrastructure necessary to facilitate that growth, and not because of austerity measures of tightening its belt.


“Who among us wants to have an austerity as a solution to our problems compared to growth?,” he asked. “You have the choice of investing and growing out of your problem and develop more revenue to pay for things or hunker down and cut everything around you to cover the debt. My vote is for growth, and I think everybody else's would be too if you stop and think about it, and the fact of the matter is that the Sanitation District right now is not doing what it needs to do in order to supply the capacity necessary for Northern Kentucky to grow. That's on a region-wide basis.”

Pendery went on to indicate that because Campbell County has less money overall than some of its neighboring counties and is unable to create incentives for SD1 projects there as a result, it has been ignored or passed over by SD1 concerning necessary projects there.
 
“(SD1) has a couple of things that sound good on the surface that they have under consideration. One is that we shouldn't spend any money unless it offers us a gain for our customers. I really like that idea, but I want to talk about the practice here in a minute. The other idea is that we don't have a lot of money so if other governments are willing to put money into a project to incent it, then we will go back, that sounds like a great idea. The problem with that last one is that first of all, for those of you who were around here when we consolidated agencies and gave the collection systems to SD1 in the first place, we told them, 'You're the public agency now that's going to raise the money and deal with the sanitation problem. We're are out of this. We're not looking for more things to spend money on. I'm not looking for the Sanitation District to come and ask me for money out of the general fund in order to do economic development; we don't have the money, but they do in Boone County. They do in Boone County. You ought to keep that in mind. That's where projects are going to go when you have that kind of philosophy. If you're looking for a government incentive, they have the money to do it there, and if you're looking for large-scale projects, they have them in Boone County. So with those two things as drivers, the last place in Northern Kentucky to see a project is Campbell County. And guess what? It's already happening.”

Because of this, Pendery says that major sanitation projects are in jeopardy within Campbell County because the SD1 budget under its current structure cannot grow financially enough to pay for the planned improvements like the proposed pipeline in Silver Grove.

“We went in and told the board that they needed to find money for growth and even though I knew they didn't have the money, they voted to spend money on Boone County projects,” he said. “They're not planning on raising the rates. I felt like that would put them in a situation where they needed to do that, but what they're going to do instead is cut projects here like the $20 million on the project that goes through four-mile valley and it cleans up 30 million gallon a year problem in Silver Grove. I'm just giving it to you as straight as I can. That's the way I see it because that's the way it is and I am going to do everything in my power to avoid these outcomes. Again, coming back to the place that is most productive, if you want to grow as a community, you have got to provide the infrastructure generally in a broad community and not just in one place. We're going to need to discipline ourselves to invest in this infrastructure and it cannot in the face of inflation and declining consumption be done without a rate increase. There need to be a series of rate increases at the Sanitation District.”

Pendery pointed to the $1 million SD1 removed from its budget earmarked to conduct a study of Campbell County's capacity.

Campbell County Director of Planning and Zoning Cindy Minter said that there are over 150 acres worth of parcels where developers have backed off in the last two months because they did not have sanitation on the sites. She also said there were two subdivisions in the County that had failed septic tanks.

Other notes:
In August of 2014, Tyson Foods Inc. completed its merger with Hillshire Brands Company. In connection with the merger, shares of Hillshire Brands common stock were de-listed and ceased in trading on the New York Stock Exchange and Chicago Stock Exchange. Hillshire Brands was listed last year as Campbell County’s top employer.

In the Campbell County Mayors Meeting in Newport on Tuesday night, Kentucky State Representative Joe Fischer asked Campbell County Economic Development Officer Seth Cutter if Tyson would keep the former Hillshire Brands plant in Campbell County.

“The latest that we have heard is that they are staying put,” Cutter said. “It was actually Sanitation District 1 that met with them to discuss a variety of issues and it was in that meeting that Hillshire indicated to them that this is one of their more profitable plants in the country, that they’ve made a sizable capital investment in that location.  That’s one that we’re still trying to have direct conversations with but the intelligence we’re hearing that they’re here to stay put.”

This story was republished with permission from The River City News

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