KY voters reject take-over of American Water of KY
Lexington voters have decided to leave their water utility in
By a 20-point margin, people voted "no" in
yesterday's water company condemnation referendum, which means
the city won't be going back to court to try to acquire Kentucky
The vote spelled a probable end for an issue that has gripped
the city for five years, cost well over $1 million in tax
dollars and an unknown amount of corporate money, and played a
role in the last three city elections.
"It means we can move on," Kentucky American
President Nick Rowe said. "I'm happy for the employees who
have worked so hard under the microscope for the last 58
With the issue out of the way, Rowe said, it was time to move
on to other things. The company wants to talk with the city's
new mayor, vice mayor and council members about "possibly
doing something to help solve the sewer issues" in
Lexington, he said.
Former Mayor H. Foster Pettit, the chairman of Bluegrass FLOW
(For Local Ownership of Water), acknowledged defeat, but said
"I don't think the last chapter in this has been
Pettit said there was a chance that a majority of the new
Urban County Council elected yesterday would favor the city
owning the water utility. But he said it was unlikely to act
"in the face of this vote."
Warren Rogers, a leading water company supporter, said the
condemnation issue is dead "for our lifetime."
"We told the community that this was a 60-40
issue," Rogers said. "FLOW didn't believe us. They
Pettit said he expected Kentucky American to soon ask the
Kentucky Public Service Commission for a large rate increase. He
said the company had avoided such a request while the
condemnation campaign raged.
Rowe said rate-increase requests are determined by the
company's "investments in the community," not by
political considerations. He said the company had made
A "yes" vote yesterday would have directed the city
to try to acquire the company "by the most effective and
reasonable means, including by the exercise of the right of
The city tried for two years to condemn the company, but the
Urban County Council ended that effort last year. Because water
company officials consistently said Kentucky American was not
for sale by itself, another attempt probably would have meant
more years of court filings, rulings and appeals.
Talk of the city taking over the company started in September
2001, when RWE AG, a German utility giant, made an offer to buy
American Water Works, the parent company of Kentucky American
Water. (RWE now is in the process of spinning off American Water
in an initial public offering, or IPO, of stock. That means the
company will again be traded on the New York Stock Exchange, as
it was before the condemnation issue arose. FLOW used the
impending IPO in the recent campaign, saying no one knew who
would own the company next year.)
The condemnation effort picked up momentum on Feb. 10, 2002,
when former Gov. Edward T. "Ned" Breathitt wrote an
opinion piece in the Herald-Leader that said the looming change
did not bode well for Kentucky American's role in the community.
The city should decide "whether to buy Kentucky-American
through negotiation or, if necessary, condemnation," he
Kentucky American, in its long fight against condemnation,
marked the days since that article appeared as "The
Takeover of Kentucky American Water." Yesterday was Day No.
In April 2002, supporters of municipal control of the utility
formed Bluegrass FLOW, with Breathitt as chairman. (Breathitt
died in 2003 and was replaced by Pettit.)
That fall of 2002, the condemnation issue helped put Mayor
Teresa Isaac in office, and by the summer of 2003, the city
filed suit in Fayette Circuit Court, seeking to acquire the
company through eminent domain.
In 2004, voters turned out 12th District Councilwoman Gloria
Martin, one of the architects of the condemnation effort, and
installed a council majority that set about undoing the legal
court case. By the spring of 2005, after the city had spent more
than $1.2 million on legal and consulting fees, the new council
stopped the legal case.
But the pro-condemnation side wasn't finished.
A group called Let Us Vote Lexington proposed putting the
question to the public, then surprised water company supporters
by collecting the signatures of more than 23,000 registered
The vote was scheduled for last November, when it would have
been the only item on the ballot. But the water company sued,
and the Kentucky Supreme Court ruled that there could be no vote
in 2005 because it wasn't a regular election year. That ruling
probably ended the pro-condemnation side's best chance for a
victory at the polls.
250 of 250 Precincts Reporting
||Yes or No