Tuesday, May 22, 2001

Water rates might jump in Newport




By Terry Flynn
The Cincinnati Enquirer

        NEWPORT — Water rates will rise sharply for Newport customers as of Oct. 1, unless the city is able to sell its water system in the meantime and eliminate its debt.

        City commissioners voted Monday night to increase domestic water rates, and City Manager Phil Ciafardini said the increase probably would be about 55 percent. That would raise the quarterly water bill for an average household now paying $58 to $90.

        But the City Commission and a water advisory board are preparing to issue a request for proposals, expected to be publicized in about two weeks, seeking bids for purchase of the water system.

        The city tried in 1999 to sell the system, which carries a debt of at least $9 million and is due for extensive updates and replacement of mains. By law, the city had to place the issue on the ballot and it was defeated by voters.

        “The sale (of the water system) is the best solution to our water problems,” said Chuck Melville, the mayor of neighboring Southgate and a member of the water advisory board. “Southgate comprises only 13 percent of Newport's water business, but this is very important to us. We're looking at a rate increase of over 50 percent.”

        Newport commissioners now can vote to sell the water system without seeking approval from voters, thanks to a change in state law last year.

        Prospective buyers for the water system will have until Aug. 7 to send in bids.

        Brent Tippey, a consultant for Quest Engineers of Lexington, which is preparing the request for proposals, said he has already heard from several possi ble bidders from outside the state of Kentucky, as well as some from within the state.

        In 1999, the city had a firm offer from the Northern Kentucky Water Service District that would have given the city $7 million in cash in addition to the district assuming the entire waterworks debt. The Water Service District is expected to be a prime bidder once again.

        About one year after the sale was voted down, the city experienced a serious setback when a main ruptured under the parking lot of the Newport Shopping Center, pumping water into a Cinergy gas main and shutting down gas service to much of the city for several days.

        There still is no official establishment of fault or demands for payment as a result of the incident, which Cinergy attorneys said cost the utility between $4 million and $5 million in labor and parts costs. But a purchaser of the water system would not assume that responsibility.

        Mr. Ciafardini said the city also will send a mailing to all city water customers, including por tions of Southgate and Woodlawn.

        In other action, commissioners unanimously approved the issuance of up to $2.2 million in state industrial building revenue bonds for I. B. Goodman Manufacturing Co., of Cincinnati, to move its jewelry manufacturing business to the former Zimmerman Printing Co. building at 120 E. Third St.

       



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