Gov. Beshear responds to questions of cronyism protecting owners - WDRB 41 Louisville News

Gov. Beshear responds to questions of cronyism protecting owners of failing sewage companies

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LOUISVILLE, Ky. (WDRB) -- The owner of a failing sewer company who polluted public water and then left the mess is trying to do it again, and now new communities are scrambling for a fix.

It's being called the worse case of deja-vu: Two months after Bullitt Utilities left raw sewage dumping into a public creek in Hunters Hollow, the same scenario might play out 60 miles away for neighbors in Franklin County.  

"It is mind boggling that someone could just construct a facility, operate it, make their money and then walk away," said Robert Hewitt, director of Franklin County Planning and Building Codes.

Hewitt said the owner of Bullitt Utilities and one of his sons are among a group of five failing utilities trying to abandon sewer plants in Franklin County. "Their attorneys first sent a letter asking for a meeting and then notified us in person of the intent." Bullitt Utilities is owned by Carroll Cogan who also owns Farmdale Utilities in Franklin County. His son Martin Cogan owns Coolbrook utilities which is also in Franklin County.

According to the Kentucky Public Service Commission Farmdale and Coolbrook serve approximately 640 customers. Last summer a WDRB investigation exposed Farmdale, Coolbrook and several other utility companies owned by Carroll or Martin Cogan mounting environmental violations, more than 200 over the course of 10 years. State inspectors cited everything from high E.Coli levels to sewage treatment plants rusting, overgrown and not being maintained--even failures to report raw sewage spills into public waters. 

"I just can't believe the state allows this," Hewitt said. "That's where the ball got dropped. There ought to be some responsibility on those private owners."

A provision in Kentucky law allows a utility provider to abandon its assets to the Public Service Commission if the company is no longer profitable. The PSC typically appoints a receiver to carry on the service for the impacted residents. When the matter played out with Bullitt Utilities last summer, the Bullitt County Sanitation District took over operation of the failing Hunters Hollow sewage treatment site. 

Hewitt said Franklin County leaders are scrambling to figure out a way to take over the five utilities. In addition to Farmdale and Coolbrook the other three are owned by Ridgelea Investments Inc. Hewitt said the first priority is bringing the equipment up to code, and it could cost millions. 

"And it doesn't seem fair to the customers...in that jurisdiction who have to bear that burden," Hewitt said.

It's a burden for customers like William Thompson, who live in the shadow of the Coolbrook plant near Creekside Lane and Clearwater Lane in Frankfort. 

"I don't understand," Thompson said. "They (Coolbrook Utilities) doubled the rates, so they should have the money."

But the people who lived have through this turnover before believe the problem runs deeper. 

Shepherdsville resident David McMullan wrote to the Environmental Protection Agency and Kentucky Governor Steve Beshear complaining about the sewage in the creek behind his home from the Hunters Hollow sewage treatment plant. He said there was always slow response -- or no response at all. 

"I think it's because that family is connected to the state somehow -- to the politicians or somebody," he said.

A public record search shows Carroll Cogan and his kids have donated nearly $50,000 to some of Kentucky's highest ranking democrats including the attorney general and the governor. Also, the Louisville Office of the Division of Water is in a building owned by Carroll Cogan's other son, Kevin Cogan. This office is tasked with inspecting and enforcing regulations on many of Carroll and Martin Cogan's failing sewer sites. 

Kevin Cogan is a developer in Louisville and does not own any of the troubled utility companies. Still, the questions of political favors exist, and WDRB took them directly to the governor

"I don't have any knowledge of anything like that, and, for my eight years, we have responded to peoples' problems and we don't let personalities or who-knows-who get in the way doing our job," Kentucky Governor Steve Beshear said. 

The state has moved forward with greater sanctions against Carroll Cogan and Martin Cogan's utility companies. Recently, Kentucky revoked the license of the business partner who operates all of the Cogan owned utility companies, Larry Smither.  There's also a lingering $125,000 dollar fine. Both matters are under appeal. But Governor Beshear admits, "It's complicated." The family patriarch is seriously ill and another son Chris Cogan who lives in Florida holds the power of attorney for his personal and business affairs. 

The PSC would have the final say on any abandonment but a spokesperson says representatives for Farmdale and Coolbrook utilities have not contacted the agency to begin the process. 

Copyright 2015 by WDRB News. All rights reserved.

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