Change certainly appears to be on the horizon for people who are customers of the Oldham County Sewer District (OCSD). The OCSD was allegedly formed under KRS 220 for the purpose of having uniform sewage service for the residents of Oldham County. At the time of its formation, the district took control and purchased several small sewage treatment plants. Additionally, also existing in the county was the LaGrange Utilities Commission (LUC) which provides sewage service for the residents of LaGrange. Subsequently, the city of Crestwood put in a sewage system and was tied to the Metropolitan Sewer District (MSD) out of Louisville. Later, Crestwood decided to join forces with the OCSD and a Joint Sewer Agency was formed under KRS 76 which makes up the OCSD as it is known today, where the LUC continues to operate as a separate entity. The board of directors of the OCSD is currently appointed from a two-fold approach. First, the County Judge-Executive, with the approval of the Fiscal Court appoints three members. Secondly, the City of Crestwood appoints two members. It should also be noted that the OCSD Board is separate from the Fiscal Court and operates independently of the court with one big exception, that being the fact that OCSD must receive approval from the Fiscal Court for rate increases.
Within the last few months it has been determined that the OCSD was in a financial crisis. Allegedly, the OCSD has requested rate increases that have been denied by the Fiscal Court in order to offset their deficit. In any event, the County Judge and the Fiscal Court gave the OCSD a few months to reduce their expenditures with the ultimatum that if the expenditures were not reduced, the court would take some action. The OCSD failed to meet that ultimatum.
However, prior to the OCSD's failure, work was already being done behind the scenes to find a new operator to manage the sewage system in Oldham County. The city of LaGrange offered to operate the OCSD and guaranteed the county that it could operate the OCSD for several hundred thousand dollars less than current expenses. Their fee was to be $400,000 annually. However, that proposal was never presented or allowed to be considered by the to the Fiscal Court by Judge Murner.
At some point in time, Judge Duane Murner took it upon himself to decide that the sewer district would be turned over to a private sector operator. Please keep in mind that he has NO authority to enter into a contract with anybody as that authority lies with the OCSD Board. On one occasion, Murner stated in open court that he was considering two different providers. However, he apparently decided on one private company of HIS choice to run the OSCD. How he selected the provider is unknown. From discussion that was held at the meeting of the OCSD Board on October 14, 2008, it appeared that the proposed contract was not put out for bid. In other words this was/is another one of Judge Murner's autocratic decisions even though the authority to enter into a contract lies with the OCSD Board.
The OCSD held a public meeting to discuss the proposed contract with the private operator. I was in attendance at the meeting and I left with the impression that Murner was attempting to force the OCSD Board to accept his decree that a private company operate the sewer district. Murner's representative, Stan Clark, was in attendance at the meeting and wanted the OCSD to reach a decision on the contract even though he admitted that all of the details of the contract had not been worked out. The OCSD Board would not make a decision on the matter nor would they make a decision on any recommendation for a rate increase for OCSD customers.
There are many unanswered questions at the present time. The city of Crestwood is considering whether to withdraw from the OCSD or remain. That decision will likely affect any rate increase and the amount that the private vendor receives.
Also of interest is the fact that when Murner started his behind the scenes chicanery, he appointed his County CFO Shawn Boyle, to the OCSD Board. To me, that is an apparent "conflict of interest" although I am sure that Murner would argue that it isn't.
There are some certainties in the whole situation. First, no contract can be approved by the Fiscal Court with a private entity as long as there is a OCSD in existence. That authority rests solely with the OCSD Board. Therefore, if they choose, they can tell Murner to mind his own business. Second, the sewer district cannot get any rate increases to help them with their financial crisis without the approval of the Fiscal Court. Without financial help, the sewer district could default on its loans in which case the banks would take over the assets of the district. If that were to happen the banks would likely hire someone to run the district or sell the assets at auction. Also, the members of the sewer district board of directors could just resign in which case new members would have to appointed. Finally, the Fiscal Court could decide to dissolve the sewer district. However, this could very well result in a lawsuit by the sewer district to prevent the Fiscal Court from doing that.
I have heard that rate increases for the customers of OCSD could range anywhere from 25% to 60%. It has not been disclosed to the public why the large variance in rates is possible. As a matter of fact, there has been a cloud of secrecy around this entire matter on the part of Judge Murner. One has to wonder what his motives are but I would look to the developers, especially those who strongly back Murner’s efforts to create additional sewer capacity for new development in the Crestwood area, being involved in some fashion.
Appearing at the OCSD meeting yesterday (10/14/08) was Tom Davis, former chairman of the OCSD. Some excerpts from his public comment to the board of directors appear below. Although they are lengthy they are worthy of reading.
"As to the relationship with Fiscal Court and how decisions are made, it is known that the following events have taken place as a part of the bail out effort.
- County representatives contacted the OCSD's lending agency and renegotiated their loan arrangements without the involvement or knowledge of the district.
- County representatives conducted a meeting with the DOW to discuss issues in the OCSD without the participation of the sewer agency.
- A backdoor effort was made in an attempt to get the Kentucky Attorney General to render an opinion that the JSA created by the merger of the CSS and the OCSD was an illegal act. I don't believe this effort was successful.
Recently a new proposal began to surface that is super secret. In spite of all my efforts, it has been virtually impossible to find out details of the proposal. Everyone that I spoke with told me that they did not know the details and this continued through the end of last week. As a result, I have classified this proposal as Oldham County's version of the Manhattan project."
Davis went on to tell the board that a reasonable person would believe that control was being exercised somewhere else (Not by the board). Frankly, he is correct.
No decision was reached on the matter at the October 14th meeting. The next OCSD meeting is scheduled for November 12, 2008, but I suspect that there will be a special meeting before that date.
