A hearing will be held in Frankfort next week to determine whether the City of Whitesburg will have a say in how state government must spend $240,000 in fine money the city believed it would be getting.
The city’s “motion to intervene” in a case involving the state Energy and Environment Cabinet and Mountain Rail Properties Inc. of Letcher County is scheduled to be heard in Franklin Circuit Court next Wednesday (January 19) at 9 a.m.
Whitesburg attorney James D. Asher filed the motion on the city’s behalf after learning late last week that money the city thought it would have available for water and sewer projects was instead being spent on a similar project in the City of Jenkins.
The money in question is part of a $500,000 sum that Mountain Rail Properties, a sister corporation to Childers Oil Company of Whitesburg, agreed to pay to settle a lawsuit the state filed after the North Fork of the Kentucky River was contaminated by diesel fuel spills in late 2008 and early 2009.
In a “consent judgment” entered September 23 in Franklin Circuit Court, Mountain Rail Properties agreed to pay $240,000 to “be used by the local government for sanitary line extension and or rehabilitation projects.”
In the motion filed in Frankfort January 7, Asher says the City of Whitesburg “believed and contin- ues to believe that it was ‘the local government’ referenced” in the settlement approved by Franklin Circuit Judge Phillip Shepherd.
Whitesburg Mayor James W. Craft said that after waiting for more than three months to hear from state officials regarding the $240,000, he “had a feeling in my stomach” that something was wrong and authorized Asher to contact the Division of Water to ask about accessing the money.
Asher quickly found out the money had already been promised to Jenkins, where new Mayor G.C. Kincer said it would be used to help finance a sewer project in Dairy Hollow. Craft said Whitesburg has been planning to use about $100,000 of the money to replace water lines in Solomon Branch, where customers often have little or no water pressure.
Kincer said he had “been hours on the phone” in a conference working out final details of the grant last Thursday when he was presented with a letter from Asher asking that Jenkins place a hold on the project until Whitesburg is given the chance to have its day in court.
“’Give us the money’ is what it said,” Kincer said of the letter.
Kincer said he wants to be a good neighbor to Whitesburg, but that he is not planning to give the money up unless he is ordered to do so.
“ The good thing is Letcher County wins either way,” Kincer said.
Asher’s motion acknowledges that Jenkins is also in Letcher County, but says Jenkins “was not impacted by the allegations” contained in the state’s suit against Mountain Rail Properties. In fact, says the motion, Jenkins is not even “situated within the (Kentucky River) watershed impacted” by the fuel tank spills.
“The City of Jenkins is approximately 11 miles up river from the spill area and located on a separate watershed (Big Sandy), and to the best of Whitesburg’s knowledge suffered no damage or loss,” the motion says.
An official with the Division of Water told the Lexington Herald- Leader that the agency holds the position that “the local government” could mean any town or county in the region with a proper need for the $240,000.
“The money was not tied to Whitesburg,” said Allison Fleck, spokeswoman for the agency. “That’s not the way it was settled in the circuit court.”
Asher also sent a letter to State Auditor Crit Luallen asking that her office “review this matter as to the movement of the funds and compliance with the court’s orders and intent.”
Kincer said he was told the availability of the fine money was first mentioned to former Jenkins Mayor D. Charles Dixon during a meeting of the Kentucky River Area Development District’s Board of Directors in early fall.
“Ours was the perfect fit,” Kincer said. “It was a small request for a small project that has to do with sewer.”