By JULIA ROBERTS GOAD
PIKEVILLE, Ky. - The Kentucky legislature is considering a budget that will allocate funds derived from coal severance taxes in Pike County.
The allocation of that money has been subject of some debate within the count.
As the budget is written, the City of Pikeville would receive $3.28 million in coal severance, while Pike County will receive more than $4 million.
Using population to determine the per capita amounts, the city would get $475.16 per person, while Pike County will receive $62.28 per person.
At a meeting of the Pike County Fiscal Court, District Six Magistrate Chris Harris spoke about what he called an example of some of the funds that may be allocated to Pikeville.
Under the pending legislation, the City would receive $1,120,000 for various water and sewage projects.
According to Pikeville City Manager Donovan Blackburn, recent development in the city has created the need for upgrades to the current system.
“The city’s plant is operating at 90 percent capacity,” Blackburn said. “In 2004, the system was at half capacity, but now we need to upgrade it.”
Mountain Water District owned a wastewater treatment plant at the Mossy Bottom Business Park in Coal Run. Documents from the Kentucky Public Service Commission show that in during 2005, the system operated with a net income of $61,063. In July 2006, the City of Pikeville entered into an agreement to purchase parts of that plant to expand its sewage services.
Under the terms of the contract, Pikeville purchased the system, with the exception of the wastewater treatment plant.
The agreement that was approved by the PSC stated the transfer would “permit Mountain Water District to relocate its Mossy Bottom Treatment Plant to another area that does not currently have sewage treatment facilities and thus avoid the expense of purchasing a new sewage treatment plant.”
Blackburn said the transfer of the sewer plant at Mossy Bottom, while leaving the wastewater system to the County, seemed like a win-win. The County would avoid the cost of a new system for Pond Creek, and the City would be able to reverse the flow of its sewage to take advantage the Mossy Bottom system.
However, that plant was never used and was subsequently sold for scrap.
Rhonda James, finance officer for the Pike County Fiscal Court and the Chairperson of Mountain Water, said that after the City purchased the sewer plant and left the wastewater equipment, that equipment remained unused, and deteriorated.
“While MWD was securing the funding and finding the land (for the Pond Creek plant) the system was just sitting,” James said. “After a while it broke down, it would not have been cost effective to move it to the new location.”
James said she did not know how long the equipment stayed unused before the County decided to sell it for scrap.
Magistrate Harris said although the purchase of the Mossy Bottom plant by the City of Pikeville was supposed to solve the city’s sewage issues and give much needed equipment to MWD, the transfer was not successful.
“The bottom line is we scrapped a 200,000 gallon per day sewage treatment plant at Mossy Bottom to better utilize the excess capacity at the Pikeville plant, and now we are spending $1 million to expand the Pikeville Plant because it doesn’t have enough capacity,” Harris said. “It makes no sense. The Mossy Bottom plant was going to be relocated to an area of the county that wasn’t served. Obviously that didn’t happen and we still doesn’t have a wastewater system at Belfry.”
But Donovan Blackburn said expansion within the city will create the need for additional capacity.
“We have new hotels, the medical school, a new judicial center,” Blackburn said. “The city is having an economic boom. Not having a new system would stifle us.”
Harris has led a fight to investigate the finances of Mountain Water District, which would receive $375,000 under the pending budget to cover debt service.
“I’m all in favor of new water and sewer projects for Pike County, but there is so little accountability at Mountain Water,” Harris said. “Waste and mismanagement shouldn’t be rewarded with coal severance tax.”