Tuesday, August 14, 2001

Newport's water sale hits a snag

Commissioners unable to agree on NKWD deal

By Terry Flynn
The Cincinnati Enquirer

        NEWPORT — City commissioners were unable to agree on how best to proceed with the proposed sale of the water works, despite nearly four hours of discussion and argument Monday.

        City manager Phil Ciafardini and his staff had recommended that the commissioners and Mayor Tom Guidugli approve the next step in the process, opening final negotiations with the Northern Kentucky Water District and conducting a series of public hearings to inform the public of what the city planned.

        NKWD was the top bidder for the city's water system, offering a lump sum of $17.1 million.

        Mr. Ciafardini said that when the water system's various financial liabilities were deducted, the city would realize between $8.5-$9 million net from the purchase.

        However, when he called for the commissioners to pass a resolution that would authorize final negotiations with NKWD on a purchase agreement, three commissioners — Beth Fennell, Jerry Peluso and Jan Knepshield — voted no, stalling the process until there is agreement on how the proposed sale will be presented to the public.

        “We must present the pros and cons of selling the water system,” Ms. Fennell said. “I want to have both sides of the issue presented at the public hearings. There is a perception in the community that we are rushing this sale.”

        Mr. Ciafardini said he would take suggestions from the commissioners as to what should be presented. While some of the commissioners made suggestions at the meeting, Ms. Fennell said she would put her ideas in writing and send them to the city manager.

        Mr. Knepshield said he didn't understand why the final negotiations were necessary, and felt the public hearings should be held first to obtain input from the community before a purchase agreement was signed.

        The city attempted to sell the water works two years ago, but when the issue was placed on the November 1999 ballot it was defeated. During the 2000 General Assembly, legislators changed the state law requiring a referendum on sale of a city utility and gave city commissions and councils the power to make the decision.

        The proposal from NKWD included a paragraph stating that the district would not raise Newport water rates for one year, or until a plan to stabilize all water rates in the district — which includes Campbell and Kenton counties — was completed, whichever came last.

        City officials had previously said that if the city retained the 100-year-old water system, water customers could expect a 55 percent rate hike in October, bringing the quarterly cost of water for an average user to about $90.


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