The Whitesburg City Council received an unwelcome reminder of cost overruns associated with the city’s water plant and its arrangement with Veolia Water at its January meeting when John Stallard of Veolia presented the council with a letter which he said dealt with the “issue of $250,000.” He said the amount was the initial installment of an arrangement to repay $500,000 in cost overruns on chemicals, lab fees, and maintenance costs incurred in a two-year period before the negotiation of the current contract with Veolia in October.
Stallard told the council that he was in an uncomfortable position between it and his supervisors at Veolia. He said he receives constant reminders of the outstanding debt whenever he speaks with them.
“It was supposed to be paid November 1,” said Stallard. “They wonder where we are here. I need to tell my bosses when we will get payment. It’s a big issue. I get hit with it once a week, from Tampa to New England.”
City Clerk Garnett Sexton told Stallard she is working to put together a package of information requested by the bank where Mayor James Wiley Craft applied for the loan. She said the information requested is very involved and comprehensive and the other duties associated with her job prevent her from spending all her time putting it together. She said she has been asked to provide general ledgers from the water department and financial records from the city as well as a full financial report.
“If I could just do that (put together the information), it would have been done,” said Sexton. “But I don’t just do that. You have been here 10 years and we’ve paid you for 10 years. It’s not a question of if you will get your money, but when.”
Councilman John Williams weighed in as well, asking Stallard what he expected. Williams said he understood that Stallard was responding to orders from above, but he reminded him of the long-term business relationship between the city and Veolia.
“You see the situation,” said Williams. “For 10 years we’ve paid you. We’ve had you before you were Veolia, for 16 years altogether, and the city has paid. We’ve just taken some real hard hits lately. We’re paying you $92,000 a month.”
“I’m caught in the middle,” replied Stallard. “From the top, they say you haven’t paid the amount you agreed to pay up front, $250,000.”
Mayor Craft told Williams he understood that Stallard was just following the instructions of his superiors. However, Craft added that until the bank loan is approved, there is nothing the city can or will do to address the $250,000.
“The only thing I can say to that is they will get it when we get it. That $92,000 a month is good money and should show that we will pay it. If they want to do something else, they will have to do what they need to. The information is being put together to get the loan.”
In other business, the council voted unanimously to approve a request from Annette Napier of Kentucky River Area Development District to apply for an Appalachian Regional Commission grant to extend city sewer lines into Craft’s Colly. In Napier’s absence, Kevin Howard of Summitt Engineering made the request. Howard said the grant would cost the city nothing and the city would need to approve it before the filing deadline of February 1. Howard also reported that the carbon filtration project for the city water plant has been delayed by the weather. He said as soon as the roof is built on the building housing the filtration unit, work will get underway again.
Howard also reported that the one-year warranty period on the new wastewater plant would be up on Friday, January 22. He said that so far as anyone knows, all the issues have been identified and noted by Summitt and the contractors and will be addressed. He added that the pumps for a new lift station at the site of the old nursing home station will be shipped in March.
The council voted to authorize a request made by Todd Adams, manager of Whitesburg’s Veolia facility, to have one of the two high-volume pumps at the water plant rebuilt. Adams told the council that water is still being pumped even though the pump failed because there are two pumps. He added that both have been in service for 12 years and were installed new when the plant went on line. He said the rebuilt pump will have the same warranty as a new one and recommended it be rebuilt immediately in order to guarantee the water supply. He said the rebuild will be finished within the week. Mayor Craft told Adams to go ahead and make sure the other pump is ready as soon as possible.
“I sure don’t want to get a midnight call saying we don’t have any water,” said Craft.
The council also voted unani- mously to contract with Sam Adams on a preservation grant proposal concerning work to restore the Daniel Boone Hotel. Adams has written several grant proposals for the city and participated with the Letcher County Tourism Commission on historical preservation projects. He will act as liaison between the city and the Kentucky Heritage Council and administer a grant for federal tax credits that are available to the owners of historic buildings who are restoring them according to proper historical guidelines. Adams said the Daniel Boone Hotel, which was given to the city by the Dawahare family, is eligible for the tax credits and the city, which pays no taxes, can sell them to other parties such as banks or other concerns. Mayor Craft said he has been well satisfied with the work Adams has done for the city and added that the Daniel Boone Hotel is a very important piece of restoration with tremendous potential for the city. Adams will receive between one and seven percent of the amount of the tax credits, which he said will probably be around $2,500.
Mayor Craft told the council the Dawahares have turned the keys to the building over to the city and the city will receive the deed as soon as everything is finalized. He said he has spoken to a company about doing an environmental assessment on the building and he has been informed that a number of the rooms on all three floors still have the original tin ceilings. Adams told the council he has obtained photos of the Daniel Boone Hotel that were taken when the city’s streets were still made of dirt and a barbed wire fence marked the end of Main Street.