Press Release from Ed Hatchett, Release Date: October 24, 2001 Audit online at: http://www.auditor.ky.gov/Public/Audit_Reports/Archive/2001CampbellsvilleW&S.pdf |
Commonwealth of Kentucky |
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(Frankfort - October 24, 2001)
Campbellsville's water and sewer department transferred over $657,000 in cash, real estate, and services to the City despite the fact that the department's statutory reserves were inadequate. So says Auditor of Public Accounts Ed Hatchett in a report released today.
Hatchett Says Problems Have Been Corrected By providing free water and sewer services to the City, the water and sewer department also violated agreements governing loans to the City from both the Kentucky League of Cities and the Kentucky Infrastructure Authority. "It is always tempting for a city to fund other general services by tapping into accumulated utilities fees," said Hatchett. "But our statutes make clear that adequate reserves and proper maintenance must be assured for a municipal utility before fees are appropriated by the city. Fortunately, Campbellsville stopped the water and sewer fee transfers last June." The City realized numerous inappropriate subsidies from the water and sewer department, including the following:
Kentucky courts have long held that a city utility must meet all reserve and maintenance requirements before withdrawing cash. At the time of the withdrawals, the department's reserves failed to meet statutory requirements by some $1.9 million. The City, which was presented the report's findings in advance of publication, responded by saying it had or will correct all the noted deficiencies. |
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