Utility professionals say borrowing money to update systems may raise customer rates

Wednesday, February 16, 2005

With federal grants fading and the lack of a state budget interrupting other funding, water and sewer systems of Kentucky are struggling to keep ahead, said Andy Lange, assistant director of the Kentucky Rural Water Association.

The association gathered for the Kentucky Rural Water Associations Management Conference this week at the Sloan Convention Center in Bowling Green.

Lange said the gathering is one way utility professionals earn the education credits necessary to keep their licenses to operate water and sewer plants around the commonwealth, in addition to being a time for them to share ideas and problems.

We get a lot of useful information we can take back to the plant with us, said Jeffery Sexton, water treatment plant operator for the Scottsville Water District. Sexton is among the nearly 325 people attending the conference, according to officials.

He said the meetings have provided information on things such as security issues, insurance and what he and his staff can do to keep the operations from spending money improperly.

Financing issues and cost versus the value of the services provided are some of the hot topics at the meeting, according to Phillip East, education services director for the group.

Compared to bottled water, the product coming out of any tap connected to a licensed water system in Kentucky is a great value, East said.

Keeping it a great value is the challenge, Lange said. With grant funding falling since the mid-80s, the water and sewer systems around the state are having to borrow money to expand and upgrade their services.

They continue to tell us there will be less and less grant money, Lange said.

In the past, his members were funding those projects 45 percent of the time with grant money. Now, that is down to 25 percent.

That means that 75 percent of the money they get to improve or expand is borrowed with interest, which drives up the cost to consumers.

Were hoping to put some more money into the rural water programs, said House Speaker Jody Richards, D-Bowling Green, in a phone interview from Frankfort. Federal grants are drying up.

Lange said there are bright spots, though. Ninety percent of Kentucky homes are served by a water company, which is well above the national average.

Richards added that the focus for state funding support has been on water systems, but as they near 100 percent of service, the general assembly may shift its focus to fund more sewer programs.

Then there is water quality, which has been forced to improve at the tap by federal regulations, but Lange said the water coming in to the systems from lakes and rivers around Kentucky is also improving.

Lots of the industrial pollution from the past has been reduced, Lange said. Farmers are more aware of the affects their processes have on the environment as well.

Availability of usable water is not the challenge here that it is in the Western states, Lange said. But, he cautioned, as Kentuckys population grows, especially in urban areas, the search for water could become a concern, as it did in Logan and Todd counties.

They had to go to Tennessee to get water out of the Cumberland River and pipe it back to Kentucky for treatment, he said.

That unusual solution, coupled with the more technologically advanced filtration in that system, has made their water 45 percent more costly than the state wholesale average.

The filtration system installed, he said, was in anticipation of tightening federal requirements.

On the sewage side, Lange said the biggest challenge is keeping stormwater and groundwater out of sewage pipes. He said the added volume caused by heavy rains is overwhelming some sewage plants and forcing them to allow raw sewage to escape into lakes and streams in Kentucky.

The solution, though, is not larger treatment plants, but better sewage collection systems that dont take in the extra water.  Daily News ·813 College St. ·PO Box 90012 ·Bowling Green, KY ·42102 ·270-781-1700