Georgetown utility plans $72 million revenue bond to finish plant work; council approves related contracts

Residents pressed the City Council on recurring water problems and unexplained spikes in bills before utility officials described a financing plan to finish wastewater treatment work and fund other capital needs.

Bill Abernathy, a resident who moved to Georgetown about a year and a half ago, told the council he has seen recurring episodes when the water developed a “significant odor and taste” and that the utility’s explanations have varied: “When I called the water department, they blamed it on all the rain in the spring,” he said. Abernathy asked the council to require a public accounting of overcharges and create a transparent appeals process for customers who receive unusually high bills. Dan Holman, another resident, said efforts to obtain reports via an open-records request were unsuccessful and urged council members to press the utility for answers on residents’ behalf.

Utility staff then briefed the council on a planned sale of the City’s water-and-sewer revenue bonds, series 2025A, to refinance short-term notes and fund outstanding plant costs and capital projects. The presentation laid out estimated sources and uses: a par amount of $72,030,000 (with an estimated premium), roughly $14 million in internal cash and grant sources including a $5 million federal grant for the south-side storage-tank project, and uses that include completion of the wastewater treatment plant, about $15.5 million of other capital projects, redemption of prior bond anticipation notes, a debt-service reserve fund, and estimated issuance costs. Utility staff said the bond sale is scheduled for Nov. 18 with a planned closing on Dec. 9.

Presenters cautioned some figures were estimates. Municipal-adviser Chip Sullivan (Baird) and bond counsel Mark Franklin joined utility staff for the discussion. Staff estimated an all-in borrowing cost around 4.85 percent (an estimate that will be fixed when the bonds sell). Staff also said the amount being borrowed now is materially smaller than the original 2022–23 rate model: the earlier model assumed about $95 million in par borrowing and a $187 million principal-and-interest payback; the current package would borrow about $72 million with an estimated $139 million total payback.

Council members pressed staff on rate impacts. Utility staff said there are no immediate plans to change customer rates and that the smaller borrowing reduces annual debt-service pressure by roughly $1 million–$1.5 million compared with the larger bond program modeled in 2023; that reduction, staff said, frees capacity to address previously unfunded capital needs such as a Burton pressure zone and advanced metering infrastructure.

Council action: Council approved three procurement items tied to utility operations. A purchase order to Lobo Incorporated for $27,550 to upgrade granular-activated-carbon system controls at Wastewater Treatment Plant No. 2 was approved by voice vote. Council approved a $167,380 professional-services award to Kentucky Engineering Group for design, bidding and related engineering for screens, clarifiers and a post-aeration building cover at WWTP No. 2. The council also accepted the recommended awards for the city’s annual materials bid used across departments. At the meeting staff also read ordinances related to the first reading of the city’s first-amended general bond ordinance and the Series 2025A bond ordinance; the bond ordinance was presented for first reading and discussion, with second reading and potential adoption scheduled for Nov. 10.

Staff said part of the capital program includes a roughly $3 million advanced-metering-infrastructure (AMI) implementation to replace existing meters over time and provide more frequent readings to customers. Utility staff noted a federal grant for the Pains Depot (south-side) storage-tank project requires Davis-Bacon wage compliance and that construction-cost estimates reflect that requirement.

Utility staff also told council the FY25 audit was completed with an unmodified opinion and offered to distribute the final audit report to council.

Why it matters: The bond sale would substitute long-term revenue bonds for short-term borrowings, affect the utility’s capital plan for the next several years, and—through debt sizing and cash contributions—affect how quickly the utility can address system repairs and meter modernization that residents asked about during public comment.

What’s next: Staff said the bond sale is Nov. 18 and closing Dec. 9; the city council is scheduled to consider second reading and possible adoption of the bond ordinance on Nov. 10. Utility staff agreed to provide additional project lists and follow-up data requested by council about complaint volumes and meter-inspection practices.