Utilities merger could boost efficiency, cut costs

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By Elizabeth Troutman

A marriage between the La Grange Utilities Commission and Oldham County Sewer District may result in less competition for grant funding and fewer treatment plants across the county. But while Oldham County magistrates are calling for the regional services, La Grange Utilities officials see a benefit to keeping services local.A committee that researched questions put forth by the Vision Council, a group of residents appointed by Oldham County Judge-Executive Duane Murner to create a vision for the county’s future, submitted a report to fiscal court on Jan. 2. At the top of their list was a recommendation to merge La Grange Utilities and OCSD to prevent competition for grant funding and reduce administrative costs. Oldham County Deputy Judge-Executive Paula Gish, who chaired fiscal court’s Vision Council committee, said she and three magistrates, including Steve Church, Iva Davis and Steve Greenwell, met with officials from OCSD to discuss the option of merging last fall. “The underlining theme of that report was, ‘How can county and other agencies be the most efficient or serve the community best?’” Gish said. Gish and magistrates on the committee concluded the two agencies should discuss a merger. “The utilities need to sit down and look at their budgets and see if they are seeking the same grants,” Gish said. Vince Bowlin, chief engineer for OCSD, said he believes there would be several benefits to combining the services, including the consolidation of sewage treatment plants and an assurance both companies weren’t pursuing the same grants. “When there is more of a need for funds than there are funds, everyone wants a piece of the pie,” Bowlin said. OCSD owns 13 sewage treatment plants in the county, and another 12 plants are privately owned. La Grange Utilities owns one treatment plant. OCSD collected about $1.25 million in grants last year. The two agencies apply for grants provided by the state and the EPA. Bowlin said most utilities companies rely on grant funding to operate. OCSD applied for one grant in 2007. John Bennett, chief engineer for La Grange Utilities, said he fears rates would rise if the company merged with OCSD. La Grange Utilities’ rates are lower than OCSD, and Bennett said he also values the ability of a localized utilities company to cater to customers. “The city of La Grange has the ability to make sure their customers are protected and rates don’t increase to take care of somebody else’s problems,” Bennett said. La Grange Utilities provides service to households within La Grange city limits, and has 2,495 sewer customers. La Grange Utilities charges $29.20 for 6,000 gallons of sewage water, which is a standard measurement for sewage companies, he said. Most LUC customers use less than 6,000 gallons of water, so he said the average sewage bill for a La Grange customer is lower. OCSD bills customers a flat fee of $8.50 per month plus a volume charge of $3.45 per 1,000 gallons. Rates were restructured in October to reward customers who use less water. Prior to October, OCSD hadn’t raised rates in two years.For 6,000 gallons of usage, OCSD and La Grange Utilities charge the same rate. Bennett said La Grange Utilities sewer rates are monitored by La Grange City Council, and are restricted to a 2.5 percent increase every year. Dennis Deibel, chairman of OCSD Board, said he thinks La Grange Utilities’ rates will catch up with OCSD rates within a few years. He said an immediate merge might mean a slight increase for La Grange Utilities’ customers, but the rates would end up about the same long-term. “I think our treatment costs at this time may be higher, but I think with EPA regulations getting stricter there’s a possibility La Grange’s cost of treatment could increase,” Deibel said. Deibel said officials from both utilities companies have met several times during the past 18 months to discuss consolidating services. He added that La Grange Utilities officials and La Grange City Council members must be open to the idea of a merge for the agencies to move forward with a consolidation. Mayor Elsie Carter said city officials have been willing to talk about a merger, but council members want the ability to control the costs of utilities. By keeping utilities local, council members can ensure residents are charged low rates. “We’re not opposed to talking, but it’s a matter of economics,” Carter said.

E-mail us about this story at: elizabeth@oldhamera.com.