In a special meeting held Thursday, the Metro Revenue Commission authorized the city to borrow $10 million from the Louisville Water Company to help pay a hefty settlement owed to a group of retired firefighters.
Later today, the Metro Council is expected to pass an emergency ordinance that gives the city final permission to borrow that money from the utility company at 2 percent interest in order to pay part of a $14 million debt owed to the group of 140 retirees.
The other part of the settlement will be paid by tapping into the city’s $65 million reserve fund, which the council is also expected to approve at tonight’s meeting.
The city owns the water company and receives annual dividends of about $18 million from its profits, but the loan isn’t expected to affect customers according to a water company spokesperson.
The settlement stems from a court ruling three years ago that the city miscalculated overtime pay for over 800 former and current firefighters going back 15 years that resulted in Metro government paying out a $45 million settlement using cash reserves and selling bonds.
However, during those negotiations a smaller group of retirees rejected the city’s offer and went ahead with their own lawsuit.
Last year, the Kentucky Supreme Court turned down Metro government’s request for an appeal in that case, marking another legal fight with public safety employees that former Mayor Jerry Abramson’s administration lost.
Since taking office, Mayor Greg Fischer — who was endorsed by the firefighters union — has entered negotiations with that group, and promised to avoid further litigation.
UPDATE: In a 21-0 vote, the council passed an emergency ordinance approving the appropriation of a $14.3 million to pay the 123 retired firefighters, authorizing the city’s $10 million loan agreement with the water company and tapping $4.3 million from the city’s rainy-day fund.
“The council’s approval of this settlement signals a new spirit of cooperation in Metro Louisville. We on the council suggested a way to settle this case and Mayor Fischer worked to make it a reality,” says Council President Jim King, D-10. “By settling this case now, we are saving tax dollars and not incurring more debt in the process. More importantly, this litigation is now behind us and all parties can move forward with the goal of keeping the public safe.”
Three council members were not present and two — Councilwoman Marianne Butler, D-15, and Councilman Stuart Benson, R-20 — abstained.