GEORGETOWN, Ky. (LEX 18) — Outgoing Georgetown City Council member, David Lusby is trying to score one last win for his constituents. He’s good with numbers, and he’s always cared about working for this city’s residents. Now he’s trying to combine the two, to try to head off a proposed massive rate increase to the water and sewer services in this town.
“The original plan was a good one, municipalities always use bonds with fixed rates,” he said of the city’s desire to fund an $86 million project with a loan.
The problem is interest rates have moved against them, and all consumers, so now that loan could cost almost twice as much as originally planned.
“When you borrow $96 million and calculate the new payment based on the interest rate, that’s over $600,000 a month,” he explained. (The extra $10,000,000 he noted is to cover closing costs and other fees.)
Mr. Lusby sat on the dais late last month and heard, in no uncertain terms, from several of the city’s residents who are not okay with a rate increase that would jump 39% in year one before ballooning to 61% in year two.
“In my plan, at the top end, it would be 19%, and on the bottom end, as low as 15%,” he stated.
Lusby would like to take out an interest-only construction loan and have it run parallel to the current $31 million loan the city using. Doing so, he feels, would be the most cost-effective, even if the rate moves again.
“Some (investors) have reached out to me and said, ‘we’d be willing to participate, or take a look at doing the loan ourselves.’”
If he can get such a loan underwritten and funded, he knows it would cost much less than the $600,000 per month price tag the Georgetown Municipal Water and Sewer Service needs to do its treatment plant and other projects.
“We need to be proactive and move as fast as we can,” Mr. Lusby said.
A meeting to unveil his proposal on Wednesday night was canceled, but Mr. Lusby has been told it’ll be discussed on Monday night.
