La Grange Utilities mulling deal with OC Water District

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By Kenny Colston

A search for a new director for the La Grange Utilities Commission has broadened to the consideration of a management takeover by another utility company.

At a special meeting of the LUC last week, the commission’s members heard several scenarios for the future of the utilities from the commission’s chairman, Roy Horton.

Those include hiring a new director, going into a partial management partnership with an outside agency, a full management partnership and/or a full merger with another utility company.

A partial or full management partnership could save the utilities money, both in the short-term and the long-term, Horton said.

Those two options received the most attention at the special meeting, with the commission’s five members receiving a presentation from Russ Rose, the superintendent of the Oldham County Water District.

The commission and the water district already have a close working relationship, Rose said, because the commission buys water wholesale from the district. The commission is already the largest customer for OCWD, and the commission’s service area is the only eastern portion of the county OCWD doesn’t current serve.

Rose pitched commission members on the service and quality OCWD provides to its customers, noting there hasn’t been a rate increase since 2009 and there are no plans for an increase in 2014.

“I always say we don’t just sell water,” Rose said. “We build relationships.”

Rose said a management partnership between the commission and OCWD would help reduce costs for both agencies and not just in personnel.

A partnership would eventually allow LUC to sell off duplication in equipment and get rid of its office just east of downtown La Grange, Rose said, as well as reduce software and maintenance costs since the two utilities use many of the same programs and software.

Also, if a partnership occurred, Rose promised staff reductions would be slow, happening through attrition and retirements, not layoffs.

“But there would be an immediate savings in the director’s salary,” he said.

If a partnership between LUC and OCWD occurred, Rose would act as a liaison between the commission and the board of the water district and would attend the board meetings of both entities.

“I would act like your director,” Rose said. “And you would be able to tell us what to do and we’ll do it.”

Under that scenario, any funds the LUC has would remain in the commission’s control, not the water district’s, Rose said. The commission would also still control rates for the commission’s service area, the infrastructure and policies for the commission’s area of service.

“Oldham County Water District has no preconceived plan on how this would work,” Rose said. “But it’s an opportunity to start talking.

“We’re willing to listen and talk about any option. But working together we can accomplish a lot. I don’t want to do anything to make you or my board uncomfortable.”

Commission members seemed receptive to the idea of a partnership between the two utilities, but Horton cautioned a partnership between OCWD and LUC wasn’t close to being finalized.

“This has not been deeply talked about,” he said.

Commission member Dan Powers said the commission is finally in a position to consider a lot of options for the first time in a while, but didn’t tip his hand on whether he would support a partnership between the two or not.

“Most impactful position we’ve had in my three years on the board,” Powers said. “It’s sort of a mini-blank slate for us right now. With any of these scenarios for me, while I want to help the guys, my job is to safeguard the citizens of La Grange.”

La Grange Mayor Bill Lammlein and Councilman Tom Goldsmith also attended the special meeting, in addition to the council’s sitting member on the commission, Joe Davenport.

Horton said whatever path the commission takes approval would have to go through the La Grange City Council. And Lammlein said a management partnership could be difficult to get through the council.

“I think it will take one heck of a presentation,” Lammlein told the commission. “There are control issues there. But if you put together a package that makes sense, they’ll go for it. But it will be one hell of a sell job.”

Davenport and Goldsmith agreed, although the latter said he is considering the idea of LUC and OCWD partnering.

“I’m open to it,” Goldsmith said. “I appreciate the commission and everything you all do. A partnership wouldn’t be bad. I’ll take your direction, you’re the experts and if it’s saving money, it may be the right thing to do, but I don’t represent all council members.”

Davenport, a member of the commission and the council, said he was more open to a partnership of all the scenarios.

“I’m open to looking at that before looking for a new director,” he said.

The commission debated the potential response of the council, as well as their own concerns on a management partnership, for an additional hour after hearing Rose’s presentation. But several commission members said they had not yet made a decision or wanted more information before proceeding.

“I’ve not made a decision, it’s too early,” John Glauber said. “I appreciate what everyone said but we can’t rush to judgment on this.”

Commission members also expressed confidence in interim director Ted Chisholm, which could help give needed time to decide which direction to move.

The commission took no official actions at the special meeting, instead deciding informally to weigh the current standing of the commission to other utilities before making a decision.

The ability to gather that information in a timely manner will be the difference in whether the commission calls another special meeting or makes a decision at their regular meeting on March 10.

“That should be plenty of time,” Horton said. “We probably need to digest this a little.”

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