Wednesday, August 08, 2001

Newport water offer: $17.1M

By Terry Flynn
The Cincinnati Enquirer

        NEWPORT — The Northern Kentucky Water District submitted the highest bid Tuesday for purchase of the Newport water system — more than $5 million higher than the only other bidder, Kentucky American Water.

        If city commissioners vote to accept the offer, Newport water users would not face a proposed 55 percent increase in water rates that officials have said would be necessary for the city to maintain the system and provide maintainance and upgrades.

        NKWD offered a lump sum of $17.1 million, compared with Kentucky American's lump-sum offer of $11.75 million. No other bids were received at city hall by the 3 p.m. Tuesday deadline.

        “We're reviewing the proposals now, and hope to meet with the water advisory board on Thursday,” City Manager Phil Ciafardini said. “We think we can make a recommendation to the City Commission at the Monday regular meeting.”

        He said he expected a favorable review of the NKWD bid and a favorable recommendation to city commissioners.

        The $17.1 million offer is nearly the same as a proposal from the NKWD to buy the Newport system two years ago. That offer, however, was contingent on voter approval and was soundly defeated at the polls.

        State law was changed the following year, eliminating the need to present the sale of a municipal water system to city voters. The city can now decide to sell with a simple majority vote of commissioners.

        “This was a very detailed process, a detailed application, because we wanted to ensure that the bids were the best we could get,” Mr. Ciafardini said. “We only received two bids, but we can say this is certainly the best deal we can get for our system.”

        NKWD president and chief executive Ron Lovan said the district staff “spent a lot of time evaluating our future needs and how Newport would help us face those needs. That's how we came to the figure we presented.”

        He said the proposal included the understanding that the city would retain all existing liabilities and obligations connected to the water system.

        Although no definite liability has been established, the city faces the possibility of paying for damage to Cinergy gas meters throughout Newport as the result of a water main break that pumped water into gas pipes and gas meters last winter. Cinergy officials have said the company's costs could run as high as $5 million.

        Mr. Lovan said the proposal to buy the water system is also contingent upon approval by the Kentucky Public Service Commission.


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