A proposed $425,000 fine in Lexington's federal Clean Water Act settlement with the Environmental Protection Agency should be paid to the government instead of being spent on sewer and environmental projects, the Sixth Circuit Court of Appeals ruled Thursday.
The appeals court sent the matter back to U.S. District Judge Karl Forester, who had rejected the settlement because of the fine.
Forester had ruled that "present day taxpayers and sewer service users should not be severely penalized for longstanding neglect" of the storm and sanitary systems by the city.
The appeals judges said Forester got it wrong.
"If Congress had thought a violator's money would be better spent that way, Congress would hardly have provided for civil penalties," they wrote.
The action means that Forester will approve the settlement that was reached in February 2008. The city has been carrying out requirements of the settlement as if it had been approved.
The settlement, also called a consent decree, calls for Lexington to spend $250 million to $300 million over the next decade to repair the sewer systems that have been polluting creeks.
Mayor Jim Newberry said he was pleased with the appeals court ruling "as it brings us one step closer to resolving the EPA lawsuit."