Wednesday, September 1, 2010

MSD RATE HIKES ILLEGAL

Many of you know I have been following MSD for quite some time. Years in fact. You also know that STOP I.T. led by President Ray Pierce, and operations manager Paul Holliger, formally sued MSD over what they say are illegal rate increases.

FOX 41 covered that story tonight here:
COUNCIL MEMBERS: MSD rate increases are illegal - FOX41.com Louisville News Kentucky Indiana News Weather Sports

According to State Senator Dan Seum, who helped draft KRS 76.090 which essentially says metro council and the mayor must approve all rate increases, the MSD rate increases are indeed illegal.

"The Kentucky statute clearly states that the local elected body will approve all rate increases and the mayor will sign off on it," said Seum.

Councilman Doug Hawkins agrees and sent a letter to the County Attorney's Office on Wednesday asking whether MSD had the required consent of Metro Council to impose the increase.

Councilman Hawkins went on to state "If we are not signing off on those rate increases and we are not following state law, there are no checks and balances in place," Hawkins said.


Most of us would agree. With the exception of the astronomical 2006 MSD rate increase of 32% NO increases have been approved by Metro Council period.

When asked by Fox 41's Stephan Johnson "What do you have that trumps this statute that's on the books?" Schardein's pat response is the same as always: "There are local ordinances -- ordinances that were passed that gave MSD's board the authority under the law to set rates at seven percent or less."

MSD's Bud Schardein continues to push the false notion that there are local ordinances that have been passed that allow MSD to raise rates up to 7% each year without approval. And of course this is exactly what MSD has been doing. Raising rates each year but staying at 6.5% to avoid any questioning by the Council.

Oh yeah Schardein has never referred to the supposed ordinance number or anything else to back up his erroneous claims. Gee I wonder why.

Bottom line?

MSD has much to answer for thanks to the boys at STOP I.T., State Senator Dan Seum, and Metro Councilman Doug Hawkins.

Stay tuned for what surely will be more to come............

3 comments:

  1. Your right but your wrong......sorta.

    § 50.24 DEBT SERVICE ADJUSTMENTS.

    (A) Whenever the Metropolitan Sewer District’s (MSD’s) net revenues are less than 1.10 times the debt service on MSD’s outstanding revenue bonds for any consecutive six-month period, by order of the Board of MSD, the schedule of wastewater and stormwater service charges shall be amended in order to maintain a 1.10 debt service coverage required by MSD’s 1971 bond authorizing resolution which was approved by the City of Louisville Ordinance Number 86, series 1971, and by Ordinance No. 25, Series 1979 as amended by Ordinance No. 32, Series 1986, and Ordinance No. 152, Series 1979 as amended by Ordinance No. 388, Series 1986, provided that the aggregate of such adjustments for any 12-month period shall not generate additional revenue from wastewater service charges in excess of 7%. An explanation of proposed rate increases in excess of 4% shall be delivered to the Metro Council at least 60 days prior to MSD Board approval.

    ReplyDelete
  2. lol why is it that everything in government ends up being "sorta." I have been through all of the above and still maintain I am right. Metro has no authority to override or make any ordinance that would violate state law. 2 interesting things to note here though I probably should have added in earlier posts:

    1. MSD rate increases are not tied solely to debt service adjustments as outlined above. MSD can raise rates for practially anything they want but must meet the criteria of law. In this case KRS 76.090 makes it clear that ANY rate increase must be approved by the local governing body. They have failed to do that.

    2. The statement An explanation of proposed rate increases in excess of 4% shall be delivered to the Metro Council at least 60 days prior to MSD Board approval. is one other misdirection in their logic.

    MSD board has approved every rate increase with no regard to this supposed requirement in the ordinance. Why submit something to the Metro Council where they have no input or say so based on the remarks by Schardein?

    This lawsuit will be very telling.

    By the way Metro welcome back!

    ReplyDelete
  3. In my opinion, anytime a utility company is allowed to collect money for a service that is not being used should be made illegal. I own a piece of property in Jefferson County that has been sitting unoccupied. I still get charged for nonusage by The Louisville Water Company and MSD. I just received a bill for almost $60.00 and no one lived there. It was for this fee and that fee, this added charge, this drainage fee and let's not forget our uncles taxes. It's like paying school taxes when you have no kids in JCPS. Thats another tax scam that needs to be investigated. Just my opinion...Thanks

    ReplyDelete

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