Kentucky American Water Cancels Contract to Collect City Fees

LEXINGTON, Ky. – Lexington residents will likely have another bill to keep track of starting next spring. Kentucky American Water informed local government officials this month that its billing contract with the city will not be renewed.

The water company handles the calculation and collection of Lexington's sanitary sewer fee, the water quality fee, and the landfill fee, and includes those items on a single customer water bill. The fees generate about $65 million annually. Lexington pays Kentucky American $1.6 million a year for the service, but the company has canceled its contract.

"Well we're under a lot of pressure right now," says Lexington Revenue Director Bill O'Mara.

Officials were expecting Kentucky American to give the city more time to make the transition. The company will stop its all-inclusive service by March 31, 2012.

What that means for about 106,000 local residents and businesses is that in addition to their water bill, there will be a separate bill just for the environmental fees. O'Mara says the city is drafting a request for proposals, and hopes to hear from interested companies by the end of November.

"We're trying to find a full-service provider that maintains the total customer record, makes the calculation, produces the bill, takes in the collections, does the delinquents, and does the customer service."