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Debate Over SD1 Rate Increase Involves Two Meetings in Two Buildings

The Judges-Executive of Boone, Kenton, and Campbell Counties will vote on Monday morning whether to accept a 5% rate increase from Sanitation District 1. The utility's board of directors on Tuesday voted in favor of the increase despite public disagreement among its members that not only dominated its own meeting but also the Kenton County Fiscal Court.

SD1's proposed budget for the next fiscal year does not leave much in the way of new development or addressing of flooding concerns in the urban core. Because the rate increase is 5% and not a tenth of a percent more, state law allows approval to come from the judges-executive instead of the full fiscal courts. These issues were among many that left the board members and other local leaders unsatisfied with where things ended up.

"If there's going to be a rate increase vote, it should be by the full fiscal courts," said board member Rick Wessels at the Kenton County Fiscal Court meeting where the issue was brought up as part of general discussion. He reiterated his point at the SD1 meeting hours later. Wessels and fellow members Garth Kuhnein were on the losing end of a 4-2 vote that moved the budget and rate increase forward. An alternative proposal by Wessels, to make the increase 5.1% to force a full fiscal court vote, was defeated 5-1.

Board president Jay Weber said the proposed budget maintains SD1's credit rating and doesn't require the utility to return the bond market, accumulating even more debt which could force it to suffer a downgrade at the hands of Moody's or S&P. SD1 will also complete projects underway mandated by the 2007 consent decree from the Environmental Protection Agency (EPA) that requires it to address its combined sewer overflows and sanitary sewer overflows which can degrade the quality of streams and rivers and are regulated through the federal Clean Water Act, according to SD1's website.

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"We informed the EPA that we are not starting any new consent decree projects that we don't the funds to do," Weber said. There are also no funds for system expansion as requested by the Northern Kentucky Home Builders Association which has developers ready to put new housing in the suburban and rural parts of the three Northern Kentucky counties. Requests in Boone amount to $20 million, in Kenton, $64 million, and another $20 million in Campbell, Weber said.
 
"We don't have any dollars in the budget for that at all," Weber said. "We are going to spend some money on some capital projects to fix issues in the system but the bulk of what we're going to be spending dollars on is ways to extend life of an asset we already have, not go in and replace it, but extend the life of it."
 
Other funds in the budget will be dedicated to improving customer service such as updating what Weber called antiquated systems in the office dealing with phone calls as well as computer software. There will be $20 million available for capital projects, most of which will be dedicated to the consent decree projects in progress. The utility will implement a 1% asset replacement schedule, meaning that as the system sits today, it could last another hundred years with 1% of it being replaced each year.
 
Kuhnein said it's time "to stop feeding the beast of SD1". "You have excess cash, you find a place for it. Reduce the amount of cash coming into it," he said. He said staffing could be cut as the utility has averaged an increase of five new workers a year. "We need to cut our staff, contract that out," he said. 
 
Kuhnein also pointed out a $1.3 million grant that SD1 had not claimed from the state that did not arrive at the utility until State Senator Chris McDaniel claimed contacted the board. He also said other grants should be pursued, though he is not a fan of that kind of money either. A creek was retored in Ft. Thomas, a golf course in Florence, and area salamanders have all been helped by a program at Northern Kentucky University.
 
"We need to be helping the people of Covington instead of the salamanders," Kuhnein said. "The people of Covington need it better. We get endless letters from retired people saying they can't afford more bills, yet there's these monies out there going to salamanders."
 
"Only when we stop feeding the beasts will those changes occur."
 
Back at the SD1 meeting, board member Jeffrey Schlosser said he would have a hard time supporting a budget that does not move towards expansion of the system t aid developers. Weber said that while the budget does not reflect such funds, conversations to that effect continue. Schlosser ultimately joined Weber, Greg Schrand, and Chuck Heilman in approving the budget and rate increase.
 
Covington City Manager Larry Klein attended both meetings. The Covington City Commission recently adopted a resolution that asks SD1, that if a rate increase is adopted, to allocate that money towards improving Covington's flooding plight. Klein said the increase amounts to an additional $1.98 a month. "I understand the need for growth and development, but when you have sewage in people's basements, that should be job one," he said.
 
Story & photos by Michael Monks, editor & publisher of The River City News