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Louisville Water and MSD to pursue consolidation

Process to take 4 to 5 years, Mayor Fischer says

LOUISVILLE, Ky. (July 24, 2012) — After reviewing the Public Utilities Task Force report and having gathered input from a wide range of citizens, Mayor Greg Fischer announced today that the city will pursue a phased consolidation of Louisville Water and the Metropolitan Sewer District.

A combined utility will bring greater efficiencies, improve customer service and create a coordinated effort to provide clean water to Louisville.

“The ultimate goal is to deliver to our citizens stronger, leaner and more efficient public utilities,” Fischer said at a joint meeting of the MSD and Louisville Water boards. The meeting was conducted at the Waterfront Development Corporation, overlooking the Ohio River.

“Our city exists because of the river,” Fischer said. “Even before Louisville was officially settled in 1778, people migrated to this region because of the Ohio River and its nearly-endless source of clean water. So, here we are today — 234 years later — as we look for ways to strengthen and improve our water and continue to be good stewards of the environment.”

The mayor is asking both boards to conduct the necessary due diligence especially in the areas of financial, legal and environmental issues. “We need to fully understand the potential liabilities associated with consolidation,” Fischer said.

Pending the due diligence, the phased consolidation will occur over the next four to five years. The future structure is yet to be determined (two separate agencies in a holding company; one company, etc).

“The goal is to have no employee layoffs or downsizing, but natural attrition could help if any workforce reductions are needed,” Fischer said.

Greg Heitzman, president of Louisville Water and interim director of MSD, will remain leader of both organizations. The two boards, working with Fischer, will develop a plan for the future leadership structure.

The Public Utilities Task Force, appointed in January by Fischer, concluded that after consolidation, savings could range from $14 million to $24 million annually.

For ratepayers, the phased merger will mean no interruption in service. The goal is that, with increased efficiencies, MSD and Louisville Water can contain costs.

“I believe that bright days are ahead for both MSD and Louisville Water and the agencies will emerge from this consolidation stronger and leaner,” Fischer said.