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Lexington council rejects option of legal action against water company

The Urban County Council narrowly rejected a resolution Thursday that would have allowed the mayor to take legal action to force Kentucky American Water to appear before the council about a proposed rate increase.

The council voted 8-7 — apparently after getting advice from a city lawyer in closed session that the city does not have grounds for such a lawsuit.

The resolution "is not legally enforceable," said Councilman Ed Lane. "That's more or less the opinion of our legal department."

Kentucky American has filed a request with the state Public Service Commission asking for a rate increase of almost 37 percent. That follows an 18 percent increase approved by the PSC last year.

In March, the company rejected the council's request to send a representative to discuss its proposal.

On April 6, the council voted 9-5 to include the resolution on its agenda.

Councilman Kevin Stinnett said four council members submitted questions that Kentucky American would have to answer under oath at a PSC hearing. The city is a party to the PSC case.

"Our legal counsel will have the ability to cross-examine them in depositions about those questions and their answers," Councilman Doug Martin said.

Vice mayor and mayoral candidate Jim Gray introduced the resolution. He said Thursday that the council had the chance to question the company in 2007 about its plan for a $162 million water treatment plant and pipeline, but failed to do so. The rate increase is being sought to pay for the project.

"We have an opportunity to ask questions again," Gray said.

Mayor Jim Newberry, who is running for re-election, asked how any legal action would be paid for if the resolution passed. He suggested that outside attorneys would be needed because the city's lawyers did not support legal action.

All of the council members who spoke said they opposed the rate increase.

Gray, Diane Lawless, Julian Beard, Chuck Ellinger, Andrea James, K.C. Crosbie and Linda Gorton voted for the resolution. Jay McChord, George Myers, Tom Blues, Cheryl Blanton Feigel and Peggy Henson joined Stinnett, Martin and Lane in voting against it.