You are on page 1of 2

Source: MSD The Courier-Journal

MSD’s monthly rates
Projected increases
20
30
40
0
10
50
60
$70
ojected increases oj Pr Proj oj oj ojec ecte tedd cr crea ea ss
2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25
$29.58 $29.58
$33.55 $33.55*
$31.50 $31.50
$67.53
*Goes into effect Aug. 1
The Metropolitan Sew-
er District is carrying its
highest level of debt ever —
$2.7 billion with interest
payments — and its bor-
rowing for a court-imposed
$850 million rehabilitation
program has just begun.
For decades, MSD cus-
tomers likely will be reach-
ing for their checkbooks to
pay for the19-year program,
which breaks down to
$3,800 for each Louisville
resident. And customers
who have already seen their
rates rise 5 to 7 percent a
year since the mid-1990s —
and 33 percent in 2007 —
can expect more of the
same.
By 2024, the estimated
annual rate for a typical
Louisville householdis pro-
jected to go from $402 in
2010 to $810 — and it could
rise even higher if the dis-
trict has to borrow more
money for other capital
construction needs, or if
federal regulators follow
through with promises to
make cities do more to curb
polluted storm water run-
off.
Further, the debt and fu-
ture obligations raise ques-
tions about how MSD will
pay for other big-ticket
projects, suchas renovating
aging flood pumping sta-
tions that protect Louisville
from the Ohio River, build-
ing new flood storage ba-
sins and covering MSD’s
share in a possible new
multi-county sewage treat-
ment plant on the Salt Riv-
er.
Jeff Frank, executive di-
rector of Future Fund, a
conservationgroupthat has
tracked MSD finances,
called its debt “staggering”
and said the agency should
pay more up front, to re-
duce borrowing costs.
Across the country, sew-
er rates have gone upfor the
last several years at double
the inflation rate, and they
are up 8.5 percent this year
nationally, said Adam
Krantz, government and
public affairs manager for
the National Associa-
By Michael Hayman, The Courier-Journal
Expanding sewage treatment plants and upgrading flood pumping stations are among the projects the Metropolitan Sewer
District is working on. Here, a crew prepares a site at the Derek R. Guthrie Water Quality Treatment Center on Lower River Road.
Record liability of $2.7 billion
to help fuel decades of rate hikes
By James Bruggers
jbruggers@courier-journal.com
The Courier-Journal
See MSD, A6, col. 1
As MSD debt builds,
residents feel pinch
New columnist
offers sales advice
BUSINESS | D1
Blame wins the
Stephen Foster
at Churchill Downs
SPORTS | C1
Winebrenner Capital Partners, LLC
10602TimberwoodCircle, Ste. 13
Louisville, KY 40223
502-671-0015
lINRA
MSRB
SIP(
Earl G. Winebrenner, III
President
Over20YearsExperience
BritishPetroleum Yield To Maturity
Offered at j6.±8
1.1 Year Corporate Bond
®
Matures - Auq. ±±, zo±±
Non Ca||ab|e
Yield To Maturity IordMotor

Offered at ±oL.j)¡
2.1 Year Corporate Bond
®
Non Ca||ab|e
Matures - Auq. ±, zo±z

1hese announcements don`t constitute a solicitation oí an oííer, nor do thev constitute an oííer in anv jurisdiction in which, or to anv person to whom, it wouldn't be lawíul to make such oííers. 1he British Petroleum securitv is a BP (apital Markets 1.55° coupon rate
corporate note and interest is paid semi-annuallv, and the lord securitv is a lord Motor (redit ¯.5° coupon rate corporate note and interest is paid semi-annuallv. Prices and vield to maturities \1M, are as oí June 11, 2010. Minimum: >25,000. Subject to a·ailabilitv.
METRO EDITION L O U I S V I L L E , K E N T U C K Y
courier-journal.com
S U N D AY , J U N E 1 3 , 2 0 1 0 USPS 564607
$1.75
$2, outlying
areas
A
G
A
N
N
E
T
T
N
E
W
S
P
A
P
E
R
MT SUN
Louisville area: Very
hot and humid today
and tonight, with
possible storms. Hot
and humid tomorrow.
WEATHER | B2
93 76 93
36-HOUR FORECAST
TODAY TOMORROW
Arts I-1
Business D1
Class. F1, G1, J1
Deaths B7
Features E1
Forum H1
Lottery A2
Metro B1
Movies I-5
Racing C14
Sports C1
TV TVWeek
108 PAGES
INDEX
THE ART OF
WARHOL
ARTS | I-1
U.S. Senate candidate Rand Paul says he is a
“board-certified” ophthalmologist —eventhoughthe
national clearinghouse for such certifications says he
hasn’t been for the past five years.
Paul, who practices in Bowling
Green, says he is certified by the
National Board of Ophthalmology,
a group that he incorporated in
1999 and that he heads.
But that entityis not recognized
by the American Board of Medical
Specialties, which works with the
American Medical Association to
approve such specialty boards.
Lori Boukas, a spokeswoman
for the AmericanBoard of Medical
Specialties, said her organization
considers certifications to be valid
only if they are done by the 24
groups that have its approval and
that of the AMA.
“He is not board-certified,” she
said of Paul.
The specialties board recognizes the American
Board of Ophthalmology, the nation’s main ophthal-
mological certification group. Paul had certification
from that organization before he let it lapse after he
started his National Board of Ophthalmology.
The American Board of Medical Specialties said
board certification is important because it enables
“patients to determine whether their physicians were
appropriatelytrainedandknowledgeableintheir spe-
Panel doesn’t
recognize Paul
certification
Still, Senate candidate qualified
to practice as ophthalmologist
By Joseph Gerth
jgerth@courier-journal.com
The Courier-Journal
By Scott Utterback, The Courier-Journal
Republican Senate nominee Rand Paul declined to
comment on his medical certification Saturday. “What
does this have to do with our election?” he asked.
See PAUL, A7, col. 1
GUN RIGHTS
Paul tells gun
enthusiasts he’s
“a proud defend-
er of the Second
Amendment.” B1
prison.
But there is a major legal road-
block.
Kentucky’s hate-crimes law
does not include homicide as a
qualifying offense — meaning
Stone’s actions could only be con-
sidered a hate crime if his victim
had lived.
“If you hurt someone, it’s a hate
crime. If youkill them, it’s not,” Van
De Rostyne told Morris last week.
“It seems inconceivable and ab-
surd.”
The lack of a homicide provi-
sion in the state law surprised not
saying during the hearing that the
fact that five white men attacked
one black teen could by itself be
enough to classify Stone’s convic-
tions for second-degree man-
slaughter andtamperingwithphys-
ical evidence as a hate crime, which
could lead to a lengthier stay in
other white men had hurled racial
slurs while attacking 17-year-old
Lamartez Griffin in July 2004, As-
sistant Commonwealth’s Attorney
Tom Van De Rostyne told Senior
Judge Geoffrey Morris during a
hearing earlier this month.
And Morris seemed to agree,
When Michael Stone was con-
victed in April of fatally stabbing a
black Louisville teenager, Jefferson
County prosecutors felt confident
they could persuade the judge that
the slaying was a hate crime.
Stone —with a shaved head and
tattoos of a Confederate flag and a
white-power symbol — and four See HATE, A6, col. 1
WHAT THE LAW SAYS
A sentencing judge must find by
a preponderance of the evidence
presented at trial that a hate
crime was a primary factor in
the commission of the crime by
the defendant. The crime must
have been committed because of
race, color, religion, sexual ori-
entation or national origin. The
judge can use the hate crime as
the sole factor for denial of
probation, shock probation or
conditional discharge. And the
finding can be used by the state
Parole Board in delaying or
denying parole.
Michael Stone
was convicted of
second-degree
manslaughter
and tampering
with physical
evidence.
Lamartez Griffin,
14 years old in
this photo, was
stabbed to death
six years ago at
age 17.
Homicides absent from Kentucky hate-crime law
Deficiency surfaces
in black teen’s death
By Jason Riley
jriley@courier-journal.com
The Courier-Journal
SUNDAY
PRINT
EXCLUSIVE
Available only
in your print
edition today.
$248 OF COUPONS IN TODAY’S PAPER
Love UofL and hate Big Blue?
Or can’t stand Big Red? Go to
RedNBlueFans.com and let
everyone know.
BREAKING NEWS
ON YOUR CELL PHONE
Text CJNEWS to 44636 (4INFO)
for the local news alerts
Time: 06-12-2010 23:50 User: mmatherly PubDate: 06-13-2010 Zone: MT Edition: 1 Page Name: A1 Color: Cyan Magenta Yellow Black
KY- A6 | SUNDAY, JUNE 13, 2010 | THE COURIER-JOURNAL NATION & FROM PAGE ONE | courier-journal.com
tion of Clean Water Agencies, a
lobby group.
“It’s becoming a very tricky is-
sue at the local level,” he said.
MSD Executive Director Bud
Schardein said the agency
doesn’t have cashreserves tocov-
er the work, so paying up front
would require much bigger cus-
tomer rate increases. Borrowing
with a 30-year pay back is de-
signed to keep customers’ bills
from exploding, he said.
“You can bludgeon people up
front with higher annual rate in-
creases, and a lot of your custom-
ers become bad debt because
they can’t afford to pay their rates
and we can’t afford to extract it
from them,” Schardein said. “My
bottom line is keeping this as af-
fordable as I can and still meet
our regulatory requirements. I
am trying to do the balancing
act.”
So far, bond rating services are
generally looking favorably on
MSD. For example, Moody’s re-
cently upgraded the agency from
a negative outlook, scoring it in
its fourthhighest rung, Aa3, inthe
“adequate” range, said Robyn
Rosenblatt, an analyst with
Moody’s Public Finance Group.
Rosenblatt said MSD officials
have demonstrated they can
manage their debt. “To their
credit,” she added, “they do have
a history of raising rates,” which
Moody’s sees as a sign of finan-
cial stability.
Even so, there remains some
criticism and push-back locally.
“Obviously, we have to have a
sewer system,” said state Sen.
Dan Seum, R-Louisville, and an
MSDcritic. “But youkindof won-
der where (the debt) is going.”
Council approval
Last month, Seumlent his sup-
port to a lawsuit by the group
Stop Invisible Taxes, which seeks
to force Metro Council approval
of MSDrate increases. MSDcites
a city ordinance that says it only
needs approval of rate increases
greater than 7 percent.
“People aren’t making much
money,” said Helen Jupin, an
MSDcustomer, noting the effects
of economic recession. “You have
to wonder …howmuch more can
people afford to pay.”
It used to be that the federal
government helped cities comply
with the Clean Water Act, but
those monies evaporated with
Ronald Reagan’s presidency in
the 1980s, said Gordon Garner, a
retired MSD executive director
who now works as a consultant.
And Robert Steuer, a spokes-
man for U.S. Sen. Mitch McCon-
nell, said that federal funding
isn’t likely to happen. “It’s prima-
rily the responsibility of local
governments to maintain their
sewer systems, and given the cur-
rent fiscal crisis faced by the fed-
eral government, this is unlikely
to change,” he said in an e-mail.
Louisville’s financing jam is
mirrored across the country. In-
dianapolis plans tospend$3.5 bil-
lion on its sewer system; Cincin-
nati, $3.1 billion; and Atlanta,
$3 billion. In Kentucky, Lexing-
ton will have to spend between
$250 million and $300 million,
and Sanitation District No. 1 of
Northern Kentucky could spend
between $1.2 billion and $3 bil-
lion.
All this is coming as the Envi-
ronmental Protection Agency
has been suing cities, alleging il-
legal sewage overflows, then set-
tling through agreements known
as consent decrees.
Louisville’s consent decree
was signed in 2005 and amended
in 2008. It followed a lawsuit by
the Kentucky environmental cab-
inet and the U.S. Environmental
Protection Agency over massive
sewage overflows into local
creeks and the Ohio River, a
drinking water source for 5 mil-
lion people.
The goal is to reduce the over-
flows dramatically, andMSDoffi-
cials said they have already cut
them by about 25 percent.
An MSD survey shows its
monthlyrate for a typical home of
about $33 is competitive. Schar-
dein told Metro Council in May
that it compares with a typical In-
dianapolis sewer bill of about $24
a month; Nashville, $37; Cincin-
nati, $54; and Atlanta, $96.
Schardein said Louisville’s
consent decree was less than
some of the other cities’, in part,
because of projects the agency
undertook in the 1990s and early
2000s. And that past spending, he
said, explains most of the current
debt.
MSD eliminated 44,000 often-
polluting septic tanks; got rid of
more than 300 small, private
treatment plants that routinely
spilled raw sewage; built two
sewage treatment plants and ex-
panded four others; and built 11
flood storage basins capable of
holding 1 billion gallons of flood-
waters.
“The Ohio River is getting bil-
lions of gallons less of sewer
overflows,” Garner said.
MSD paying as it goes
But of the $1.4 billioninprinci-
ple that MSD still owes, only
about $180 million is fromspend-
ing on the 2005 consent decree,
said Marion Gee, MSD’s finance
director. Later this year, the agen-
cy plans to borrow $300 million
more, largely to fund consent-de-
cree projects, he said.
The goal is for MSDto pay as it
goes for 25 percent of the
$850 million, andborrowthe rest,
Gee said. That creates a large
debt service — $96 million in
2009, or 49 percent of the agen-
cy’s operating revenues and its
largest expense.
MSDis doing what it has to do,
saidStevenG. Kovan, who directs
the University of Louisville’s
master of public administration
program and teaches classes in
public sector budgeting. He re-
viewed MSD’s most recent an-
nual financial report and said the
agency has little choice but to
borrow to pay for the EPA man-
dates.
But there are potential conse-
quences, Kovansaid, since paying
back the debt comes first.
“They’ll just have less money
for other things,” he said.
Schardein said he wishes he
had more money to build more
storm water retention basins in
low areas of Louisville. And
looming, there is talk in Frankfort
of the need for a regional sewage
treatment plant in Bullitt County,
which could cost tens of millions
of dollars.
He said anticipated tighter
rules on controlling pollution
from storm water also could af-
fect customers’ rates.
“When I knowwhat it means, I
will take it … to everyone in the
community, andsay this is what is
going to be required to raise wa-
ter quality inthis community, and
this is where we see the budget,”
Schardein said.
Weighing the need
But perhaps the biggest MSD
need not yet funded is for reno-
vation of the city’s aging Ohio
River flood-protection system.
Schardein says Louisville is at
risk of “being another New Or-
leans,” referring to the deadly
floods around Hurricane Katrina
in 2005, when that city’s flood-
protection system was over-
whelmed.
The Louisville system was
built after the1937 flood, and nine
of its pumping stations designed
to push water to the Ohio River
are more than 50 years old. MSD
is spending $17.5 million to re-
build the one Schardein said is in
greatest disrepair — the 57-year-
old Western flood pumping sta-
tion, which protects 137,000 west
Louisville homes. Congress allo-
cated $5 million in federal stimu-
lus money to help.
But Schardein said eight
others also need major renova-
tions at an estimated cost of
$50 million to $70 million — and
he argues that the federal govern-
ment should help cover more of
the cost.
“They will inspect them,” he
said of federal agencies. “They
will give you a passing or failing
grade. But for whatever reason,
they will not participate finan-
cially. I think that needs to be ad-
dressed.”
McConnell, the Republican
from Louisville and the Senate
minority leader, declined to com-
ment on whether the federal gov-
ernment should help pay for ren-
ovating the pumping stations.
U.S. Rep. John Yarmuth, D-
Louisville, said failing infrastruc-
ture is a national problem and
that the House Ways and Means
Committee, of which he’s a mem-
ber, is exploring howto funda na-
tional infrastructure bank tohelp.
“We’re looking at all sorts of
options,” he said.
Garner, who said MSD bor-
rowed about $1 billion under his
watch, saidthe spending is neces-
sary if Louisville residents want
clean water.
“It’s an investment,” he said.
“Louisville had a lot of (sewage)
problems, and it still has a lot of
problems, but it has come a long
way in the last 30 years. People
who don’t want to pay for clean
water should go to a country that
doesn’t have it, and then decide
what it’s worth.”
Reporter James Bruggers can be
reached at (502) 582-4645.
MSD | Debt
reaches record
$2.7 billion
Continued from A1
By Michael Hayman, The Courier-Journal
Along with work at sewage treatment plants such as the Derek R. Guthrie Water Quality Treatment Center on Lower
River Road, the Metropolitan Sewer District plans to renovate pumping stations and build new flood storage basins.
only prosecutors, but also Judge
Morris and even Stone’s attorney,
Sheila Seadler.
After Seadler argued that the
law doesn’t allow Morris to find
Stone guilty of a hate crime, the
judgeaskedher whylegislatorshad
not includedmurder, first- andsec-
ond-degree manslaughter or reck-
less homicide in the statute.
“I thinkthat possiblythe Gener-
al Assembly, in their infinite wis-
dom, didn’t realize exactly the ex-
tent of what they were doing,” she
said.
Kentucky’s hate-crime law,
passed in 1998, allows a judge at
sentencing to refuse motions for
early release, probation and shock
probation.
More importantly in the Stone
case, the state Parole Board may
denyearlyreleasetothosefoundto
havecommittedahatecrime—de-
fined as an offense motivated by
race, color, religion, sexual orienta-
tion or national origin.
VanDe Rostyne saidStone is al-
ready eligible for parole because of
the time he has served. Stone was
initially convicted in March 2005
and sentenced to18 years in prison
after a jury found him guilty of
first-degree manslaughter and
tampering.
Conviction overturned
That conviction was over-
turned last year when the Ken-
tucky Supreme Court affirmed a
2007 Kentucky Court of Appeals
ruling that Stone should be tried
again because of prejudicial testi-
mony heard by the jury.
Former state Rep. Mike Bowl-
ing, who sponsored the hate-
crimes bill, said in an interview
that he couldn’t recall why homi-
cides weren’t included in the law.
He said legislators may have
thought that someone charged
with a murder would not be eligi-
ble for probation or early parole.
But Van De Rostyne noted that
juveniles charged with murder can
receive probation when they turn
18 — and homicide convictions
other than murder can also lead to
probation.
More than likely, Bowling said,
there was much legislative wran-
gling in trying to get a hate-crimes
law passed, and if homicides were
not included, “they were probably
just overlooked.
“If someone commits those
crimes for hate reasons, they
shouldbeapart of it,”Bowlingsaid.
Sen. Kathy Stein, D-Lexington,
who in 1998 was a member of the
judiciary committee and helped
pass the hate crime lawas part of a
massive crime bill, agreed that leg-
islators didn’t think about lesser
homicide charges.
“We overlooked it, and I’m sor-
ry that we did,” Stein said, noting
that legislators were concentrating
mostly on assaults.
Stein said she has not heard of
the problem coming up before the
Stone case, and Van De Rostyne
said it was the first time the issue
arose for him.
That may be in part because,
prosecutors said, it is relatively
rare to try andget a defendant con-
victed of a hate crime, because it is
so difficult to prove that a defen-
dant’s motivation involved the vic-
tim’s race or sexual orientation.
Allen Trimble, common-
wealth’s attorney for Whitley and
McCreary counties and president
of the Kentucky Commonwealth’s
Attorney’s Association, said he
didn’t remember having one hate
crime case in the last decade.
A spokesperson for Attorney
General Jack Conway said his of-
fice does not keep records on how
often defendants are charged with
violating the hate-crimes statute.
Report on hate crimes
The Kentucky Justice and Pub-
lic Safety Cabinet releaseda report
last year that Kentuckyreported56
hate crimes in 2007, none of which
involved a murder. The report did
not note howmany of these defen-
dants were actually convicted of a
hate crime.
Regardless, it’s still a loophole
that needstobeclosed, saidVanDe
Rostyne, who has written his own
revision to the lawto include mur-
der, manslaughter and reckless
homicide. He hopes to have some-
one sponsor the amendment inthe
January legislative session.
And he has asked Judge Morris
to find Stone guilty of a hate crime
regardless, arguing that the law
also doesn’t specifically prohibit a
homicide being deemed a hate
crime.
“If strict interpretation of the
law leads to absurd results, that is
not true justice,” Van De Rostyne
said in an interview. “This would
be an absurd result.”
MonaFlippins, Griffin’smother,
saidshehas never doubtedthat her
son was killed because he was
black.
“It’s not fair and it’s not right,”
saidFlippins. “That lawneeds tobe
investigated.”
But Seadler, who argues that
Stone was acting in self-defense
and denies that he hurled racial
slurs, says Morris is obligated to
follow the law.
Morris is expected to rule in a
few weeks.
Reporter Jason Riley can be reached at
(502) 584-2197.
HATE | Legislative shortcoming dates to 1998
Continued from A1
PHILADELPHIA — Even as fi-
nancially strapped Catholic
schools closed across the country,
no one in Philadelphia ever
thought the church would shutter
Cardinal Dougherty High School.
Not the flagship campus that
once boasted 6,000 students and
billed itself as the biggest Catholic
school inthe world. Not the school
whose marching band once played
for a pope, a princess and a presi-
dential inauguration.
Not Cardinal Dougherty.
But the unthinkable came to
pass inOctober whenthe Philadel-
phia archdiocese announced2009-
10 would be Dougherty’s last
school year. The school, a victimof
decliningenrollment andchanging
demographics, will close this
monthafter 54years andmorethan
40,000 graduates.
“My head understands it, but it
really hurts your heart,” said 1966
alumnus Tony Conti. “This is
where I went to high school; this is
where I met my wife.”
Nationwide, 174 Catholic
schools have closed in the past
year, compared with 24 opening,
according to the National Catholic
Education Association. Catholic
school enrollment in the U.S. has
declined 20 percent in the past
decade.
Dougherty opened in 1956 with
more than 2,600 freshmen and
sophomores.
The students —nearly all white
and nearly all Catholic — paid no
tuition, because local parishes
could afford to subsidize the cost.
A wall divided the boys’ and girls’
sides of the building.
“The only thing the males and
the females shared was the chap-
el,” said Jack Seydow, a member of
Dougherty’s first graduating class
in 1959. “So I went to chapel a lot.”
By 1965, the school reached its
peak enrollment of 5,944. Church
officials today can’t say how they
verified Dougherty’s title of the
world’s largest Catholicschool, but
the claimgave students “a tremen-
dous sense of pride,” Conti said.
Pride also stemmed from
Dougherty’s renowned marching
band. Dougherty performed for
Pope Paul VI at the Vatican, Presi-
dent Lyndon Johnson’s 1965 inaug-
uration and for Princess Grace of
Monaco, a Philadelphia native.
Though an alumni group still
performs, the school has not field-
ed a marching band in about 20
years. Dougherty’s enrollment —
about 600 this year — fell 43 per-
cent in the past decade, and was
projectedtofall another 34percent
inthenext threeyears, officials say.
Urban Catholic schools have
been hard hit by dwindling enroll-
ment. Neighborhoods once filled
withlargefamilies haveemptiedas
parishioners move to the suburbs.
Some dioceses paying settle-
ments to priest-abuse victims have
less money to subsidize school op-
erations. Fewer subsidies leads to
higher tuition, which fewer fami-
lies can afford in a recession.
“We are faced with rising costs
to maintain the overhead of large,
older schools that simply are not
operatingclosetotheir capacities,”
Richard McCarron, the archdio-
cese’s secretary for Catholic edu-
cation, said in announcing Dough-
erty’s closing.
Joseph Caruso, a1967 alumwho
returned to teach for 39 years,
blasted church officials for the de-
cision. The closing will end family
traditions of attending Dougherty
and leave inner-city students with
one less alternative to the troubled
public schools, he said. “You can’t
measure success all the time bythe
bottom line,” he said. “I just don’t
think that they understand how
many lives this is affecting. I really
don’t think they care.”
Administrators have refrained
from using the word “last” — last
prom, last graduation — to keep
the year as normal as possible,
principal Thomas Rooney said.
But it hasn’t change the facts.
The last classes at Dougherty
will be held Thursday.
High-profile Philadelphia Catholic school closing
Falling enrollment
doomed Dougherty
By Kathy Matheson
Associated Press
Time: 06-12-2010 21:15 User: mmatherly PubDate: 06-13-2010 Zone: KY Edition: 1 Page Name: A 6 Color: Cyan Magenta Yellow Black