TheTimesTribune.com, Corbin, KY

December 12, 2013

Corbin Utilities caps earnings shared with city


TheTimesTribune.com, Corbin, KY

CORBIN — By LeeAnn Cain / Staff Writer

An increase in the cost of electricity prompted the Corbin Utilities to cap the amount of its earnings it shares with the City of Corbin.

For many years, the Corbin Utilities Commission (CUC) has given 3 percent of its gross earnings to the city, and the city includes this money in its budget. At Tuesday’s commission meeting, General Manager Ron Herd requested a cap on this contribution, and commissioner Wendell Mitchell made a motion to set a cap on the amount to contribute monthly to the city, expressing concern over an increase in the cost of electricity.

Chairman Terry Joe Martin emphasized it was the goal of the proposed cap to protect the utilities commission from rising costs of KU, from which the CUC buys its electricity wholesale, without giving less money to the city. The initial proposal by Martin was a maximum contribution of $25,000 per month or 3 percent of the utility commission’s gross income, whichever was less.

Commissioner Mark Daniel pointed out that there were many instances where the 3 percent contribution exceeded $25,000 and so the amount contributed to the city would be reduced.

Martin then revised the number to $30,000 as a maximum contribution, and the commission decided after reviewing contributions over the past several years that 3 percent contributions exceeding $30,000 were rare. Mitchell asked if the CUC was setting a max, and Martin replied that even with the cap the contribution is still “more than they’ve [the city of Corbin] ever gotten.”

Mitchell stated that $30,000 would minimize the impact to the city’s budget while protecting the utilities commission from large spikes in utility prices. Though these spikes wouldn’t affect the ability of the CUC to pay its expenses, they would like to limit the amount of money they give to the city as their revenues rise. Herd stated that the amount of money given to the city of Corbin would rise as utility prices rose.

Herd said that the CUC does not need to “contribute” this money, but it was something they had done for decades and as their revenues rise they wanted to continue contributing money to Corbin while keeping more money for use on projects and other expenses. Though it is affiliated with the city, the CUC is operated like a business and aims to make a profit. Herd said that it would be several years before the cap would make any kind of impact on the money Corbin receives from the CUC.

“I personally think $30,000 is better than $25,000,” Martin said. He then stated that the commission could always revisit the amount of the cap. Mitchell moved to amend the original motion from a cap of $25,000 to a cap of $30,000  and Daniel seconded the motion. The motion passed unanimously.

In other business

—The commission approved the annual renewal of a $15 gift card from Kroger’s for all of the city’s employees.

—There was an annual renewal of a Christmas gift of $200 to CUC employees

— The General Manager’s report gave the total contributions to the City of Corbin from the utilities commission as more than $675,000 for the year and more than $57,000 for the month of November.

—The General Manager’s report gave updates on the Wastewater Treatment Plan Flow Upgrade project, the Knox County sewer extension project, and two bridge replacement projects.

—The Wastewater Treatment Plan Flow Upgrade project is a study to expand sewers in order to pump more water during heavy rains. The report announced that GRW has furnished the design technical memorandum for review, and a meeting with GRW personnel is scheduled for Dec. 11 to review the project.

An application for a State Revolving Fund, administered by a state for low-interest loans to invest in water and sanitation, is being submitted. If approved the funds will be available in 2015. The Wastewater Treatment Plan Flow Upgrade project is built with $1 million in CUC funds.

—The Knox County sewer expansion, funded by grant money to expand the city’s sewer system to Old Barbourville Highway, has a current contract amount of over $937,000 and the contractor has submitted a pay request with the total work completed at roughly $269,000. The contractor has been paid $256,000 to date with approximately $13,000 held in retainage.

A property owner signed the easement which was holding up construction of a portion of the project that was bid as an additive alternate.

—The contracts for the replacement projects on KY 6 and KY 3437 have been executed. The Department of Highways is replacing bridges along those roads and as a result has to relocate water lines along those roads. The CUC will be refunded for the costs of these relocations.