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County can’t use severance funds to pay for tap fees



The Letcher County Fiscal Court will not be able to use coal severance tax funds to pay hook-up fees for all county water customers.

The plan, which was initiated by District Five Magistrate Wayne Fleming at the court’s March meeting, would violate the law, said Kim Padgett of the Rural Community Assistance Project. Padgett, who works with the Letcher County Water and Sewer District on compliance issues and serves as a bridge to the state Public Service Commission, told the court at its April meeting Monday that while she agrees with Fleming in principle, the law prohibits the court from spending public money to pay the fees.

Padgett said the Water and Sewer District’s tariff, a set of rules and procedures developed by the District and approved by the PSC, forbids the use of public funds to pay the tap fee and added that changes to the tariff would have to be approved by the PSC. She said it is highly unlikely the PSC would OK such a change because that agency already wants the Water and Sewer District to raise rates to a point where the district can break even and have a surplus for emergencies.

Fleming told Padgett the rule doesn’t make sense because the Water and Sewer District would benefit more from the additional customers it could gain by doing away with tap fees. Padgett cautioned that if the county pays for tap fees in the future the Water and Sewer District would have to give the fees back to the nearly 3,000 customers who have already paid them and would cost more than $1 million.

Padgett said the Kentucky Department for Local Government, which controls the dispersion of coal severance tax funds to counties, will not allow the funds to be used for paying tap fees. Fleming said in that case he believes the law is wrong and said he feels the legislature should be more interested in helping poor people get clean drinking water.

Letcher Judge/Executive Jim Ward told the court the controversy caused by the plan to pay tap fees has already led to the resignation of one member of Water and Sewer District’s Board of Directors, former Letcher Schools superintendent Bernard Watts. Ward added that Board Chairman Phillip “Pee Wee” Back has said he will submit his resignation as soon as some paperwork matters are complete.

“ I don’t see why they resigned because we tried to help somebody,” Fleming replied.

Ward said the resignations were occurring because board members have been inundated with angry telephone calls from people who have already paid tap fees and are now demanding their fees be refunded. Ward said he has also received a number of similar calls.

“Let them resign,” said District Four Magistrate Keith Adams. “I wish there was a way to oust the board members and do it ourselves.”

Adams was vocal in his opposition to the tap fees and said he was offered water when the Blackey Water Treatment Plant was built several years ago, but that no lines were extended to Blacksmith Drive, where he lives. When the Water and Sewer District hired contractors to extend the lines to serve Blacksmith Drive, Adams said the tap fee of $650 was too high. The usual fee is $350 during construction, except for those line extension projects funded by the Division of Abandoned Mine Lands which budgets tap fees into funding packages.

The Water and Sewer District paid the contractors out of funds it had on hand to do the work, which cost $6,200 to serve five potential customers. Padgett explained the original work was not done by the Letcher County Water and Sewer District, but instead by the City of Blackey, which had run out of funds before lines could be installed along Blacksmith Drive. She said the District had no role in the Blackey operation until it was turned over to the county in 2005 after it became apparent that Blackey could no longer manage its own water system.

Adams also said he is dissatisfied with the performance of the Water and Sewer District and the district board. He complained about work done on the Red Star Water Project along Route 7 in his district. He said the area along Route 7 was “a mess” and said he doesn’t think the engineers (Bell Engineering of Lexington) did a good job in supervising the contractor, Cumberland Pipeline of Russellville, Ky. However, at the March meeting of the Water and Sewer District Board of Directors, Steve Caudill of Bell Engineering said Bell had expressed its concern to Cumberland Pipeline about the slow pace of clean-up and sent the company notice that the district reserves its rights pertaining to liquidated damages. The District currently holds $133,091 from the contractor. Caudill said Cumberland Pipeline replied that as soon as Mountain Enterprises opens its asphalt plant for the season, probably this month, the company would do the paving and finish the cleanup.

Padgett reminded the court that contractors are selected through a competitive bidding process that is firmly set in Kentucky procurement law. She said the District has to follow the law in picking contractors and the board members have no leeway.

“The board can’t hand pick contractors,” said Padgett.

Ward praised the board for its hard work. Padgett reminded the court that members of the water and sewer board serve for no salary and pay their own expenses for travel and other requirements of the position. Ward added that Back and Watts would stay on the board until after its April 19 meeting.

After Ward told the court a motion to rescind the action from the March meeting to pay the tap fees would be necessary, District Two Magistrate Terry Adams made the motion but added that if the District acquires the funding in the future and it becomes legal to do so, the tap fees will be repaid to everyone who has paid them. The motion passed five to one with Fleming casting the lone no vote. Ward also said the tap fees do not have to be paid in full immediately, but can be added to monthly water bills in affordable segments.

In other business, Fleming questioned Little Shepherd of Kingdom Come outdoor drama director Don Amburgey about the status of a Cavalier mural that was painted over near the entrance to the amphitheater where the drama is staged in Jenkins.

The mural was painted over by Jenkins City Councilman Terry Braddock, who said he did it at Amburgey’s request.

“Why haven’t you painted that sign back?” Fleming asked as Amburgey approached the court to talk about a funding matter. “You promised to paint it back.”

Amburgey said he had spoken with the Jenkins School Board in December to determine where and how they want the Cavalier replaced but had not talked with them since. Amburgey told the court he has been ill and has just returned to work.

“I don’t know what they want (either),” said Fleming, “but that has caused more conflict. All the good you have done was wiped out by one dumb thing. You need to go to the office and get it done. It needs to be done. It was the dumbest thing ever. Some of the people up there (at the amphitheater) had been told not to do it, but they did.”

”I went to Whitesburg (High School),” said District Three Magistrate Codell Gibson, “and I’d like to see it back.”

Fleming also asked Judge Ward if the Whitesburg Appalachian Regional Hospital could provide the court with financial records for the $ 100,000 allocation made each biennium from the county’s coal severance funds. Fleming said he would like to compare the records from the period before the allocations went into effect with those after the court began to provide the allocation to see differences in indigent care. Ward said the hospital provides some records when the funds are drawn down. Fleming said if the hospital isn’t forthcoming with the request the court should file a Freedom of Information request to get the information. Fleming also said he is disappointed with the state legislature for restoring the $100,000 allocation to ARH after the court voted no.

“I think the court has a better grasp on what’s going on in Letcher County,” said Fleming.

Nesbitt Engineering owner Paul Nesbitt said work on the first phase of the Payne Gap water project is within 60 days of being complete, and that he expects construction on the second phase to begin in July. Nesbitt said Phase II will run through Bottom Fork and along US Highway 119. He said if funding is adequate, the lines will connect with water lines serviced by the City of Whitesburg at Mayking.

The Payne Gap Project is being administered by the City of Jenkins and will be turned over entirely to the Letcher County Water and Sewer District when complete. Jenkins will supply water to as many as 500 customers through a master meter located near the junction of US 119 and US 23.

Nesbitt said the project’s third phase will supply the community of Millstone with water as well. The plan calls for all the water lines in the Letcher County Water and Sewer District to be interconnected so water can be supplied to every part of the county even in an emergency when one or more sources is down.

Letcher County Tourism Commission Chairman Dr. David Narramore, a Whitesburg dentist, presented the court with a $ 500 check from Rhino Energy of Lexington as a donation for the Whitesburg Streetscapes Project. Narramore also said the Center for Rural Development in Somerset has approved a $ 10,000 grant for a heritage center for the proposed Monument Park, which will include permanent exhibits from the county’s original founding families (1804-1919) and space for rotating exhibits as well. Narramore said the Tourism Commission is seeking items from the founding families. He said that with the funding, the Commission will be able to computer-generate the manner in which the items will be displayed.

Narramore also asked the court to name the access road to Raven Rock at Pound Gap “Lincoln/Davis Drive” in honor of the two presidents who served during the Civil War — U.S. President Abraham Lincoln and President of the Confederacy Jefferson Davis. Both men were born in Kentucky. Letcher County Attorney Jamie Hatton said he needs to look into the matter before the court takes action. The request came from Ben Caudill Camp Number 1629 of the Sons of Confederate Veterans.

The court also voted to close the Letcher County portion of Little Shepherd Trail to vehicle traffic on April 28 from 9 a.m. until noon for the Red Bud Bicycle Ride. The Harlan County portion will be closed as well.

In other business:

• The court voted unanimously to accept the first reading of a proposed $10.7 million budget for Fiscal Year 2012-13. County Treasurer Philip Hampton submitted the budget and asked the court to examine it and recommend changes at the May meeting.

• The court voted unanimously to amend the county personnel policy to accommodate a price increase in health insurance coverage for county employees. The court voted to pay up to $377.46 per employee for health insurance coverage, an increase of $56 per worker. Ward said he is pleased that the court could shoulder the increase and still give an across the board two-percent raise to all county employees in the FY 2012-13 budget at the same time a number of nearby counties are cutting benefits and laying off employees.

• The court voted unanimously to name KY Highway 805 from the bridge at Number One Bottom in Burdine for one mile going toward Jenkins for Sergeant First Class Frank Fleming, U.S. Army, Vietnam.

• The court voted unanimously to approve a motion from Magistrate Keith Adams authorizing the court to buy cell phones for each magistrate. Ward said the phones can only be used while conducting county business.

• Magistrate Fleming asked County Treasurer Hampton to provide the court with a comprehensive financial statement for the Letcher County Recreation Center with his other financial reports for county agencies each month. Fleming said he would like to see how the center stands on a monthly basis.



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