ONE-ON-ONE
- July 2002
by Ed G. Lane
'For Lexington to be a Great Community
Everybody has to Work Together'
As a business and chamber leader, Nick Rowe measures Central Kentucky's
potential
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Nick O. Rowe
Nick Rowe has served as vice president of operations for Kentucky-American
Water Co. since 1998 and is widely considered one of America’s
foremost experts on operational/finance issues pertaining to
utility companies. In addition to managing finance, information
systems and engineering improvements for the company, Rowe also
provides direction in safety, risk management, water quality,
production and distribution operations.
Prior to working with
Kentucky-American, Rowe was manager of eastern operations with
Pennsylvania-American Water Co., a sister firm. He has also
worked with the Virginia-American and West Virginia-American
water companies and CSX Railroad.
A 1981 civil engineering
graduate of Western Kentucky University, Rowe has served as
chair of the Governor’s Higher Education Nomination Committee
and is the current chair of the Greater Lexington Chamber of
Commerce.
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Ed Lane: What are the two top missions of the Greater Lexington Chamber
of Commerce?
Nick Rowe: The Chamber wants
to promote the quality of life that we enjoy in Lexington by engaging
businesses into the day-to-day facets of our community. The Chamber
also wants to reinforce efforts to unite Lexington into a community
of one, under one umbrella. Another issue that is important to me
personally is the effort this year to close the achievement gap in
the education arena. The Chamber has worked hard this and last year
in attempting to facilitate discussions among different educational
leaders. Members of our school board, teachers, principals, educators,
folks on the Pritchard Committee, our state commissioner of education,
are trying to bring focus on working together as one, instead of working
in opposing viewpoints.
EL: Could you be a little
more specific about the education issue?
NR: One of the reasons Raleigh,
N.C. was selected this year for our chamber trip was because of how
successful that community has been with public education initiatives.
Raleigh leaders made it very clear that in order to continue to make
improvements in public school systems, you have got to have community
buy-in – everybody pulling on the rope at the same time. In Lexington,
there have been various viewpoints from the equity council, the school
board, the superintendent, teachers and parents on different issues.
I hope, the Raleigh trip helped increase our sensitivity on how Lexington
can improve its public system by seeing the success stories of others.
When a family moves to Lexington and asks, “where should my kids
go to school?” I hope the answer will be, “it doesn’t
matter; they’re all good schools.”
EL: Economic development is
not one of the top missions you mentioned. Do you foresee a time in
the future when economic development efforts would be consolidated into
one entity – similar to the organizational structure of Greater
Louisville, Inc.?
NR: That’s a real good
question. As we have visited various chambers, in Raleigh for instance,
economic development was part of their chamber. Here in Lexington
there are two separate entities (The Lexington Chamber and Lexington
United). They have worked very closely together, which is good. I
envision, because the Lexington Chamber and Lexington United are located
in the same building, there will be a time and place that both will
work even closer together.
EL: How would you rate the
effectiveness of Greater Louisville, Inc.
NR: Well, you’ve got
to admit that Greater Louisville, Inc. has made some pretty tough
decisions – and moved forward with the merged government. I’m
sure they’ve had their hurdles, bumps and bruises. Popular decisions
are not always the best decisions. Leaders have to make tough decisions
that are best for the community.
EL: One of the hot areas in
the state is Northern Kentucky. What factors seem to be stimulating
economic development in this region?
NR: Northern Kentucky is a
part of the Greater Cincinnati area, a major metropolitan area. The
transportation system is excellent. The international airport is actually
located in Northern Kentucky and is a major economic development attraction
for corporations. The counties and cities have done a lot of downtown
and riverfront redevelopment on the Northern Kentucky side.
EL: Over the last few years,
the Lexington Chamber has been taking more public positions on important
issues facing the community – with the exception of endorsing political
candidates. What type of feedback has the Chamber received in this regard?
NR: It’s been very positive.
In fact, I was at a Chamber business trade show last week, and received
several unsolicited comments from attendees that they were glad to
see our chamber becoming stronger and getting involved in the issues
facing our community.
EL: Most recently, The Lexington
Chamber’s position paper opposed a “public taking or condemnation”
of the Kentucky-American Water Company by local government. As chairman
of the Chamber and vice-president of Kentucky-American Water, how did
you personally deal with this issue?
NR: When the discussion of
the takeover of the water company first came up, the Chamber had a
board meeting and I made it very clear that I would excuse myself
from those discussions, and that anyone associated with Kentucky-American
would excuse themselves. After Bill Lear (of Stoll, Keenon & Park
and a past chairman of the Chamber) became our lead attorney in that
case, I asked Bill to do the same and he was gracious and stepped
totally away from that process. I also asked Darby Turner (Greenebaum,
Doll, McDonald), who is the new chair-elect of the Chamber, to take
the lead role in any matter relating to this issue because I did not
want to impose any undue stress on the Chamber. I don’t apologize
for the fact that I just happened to be chairman of the Chamber this
year; this issue could have easily come up last year. I thought it
was prudent for me and Bill to remove ourselves from the public policy
committee. So, when the takeover issue started at the public policy
committee level, I even did not attend those meetings. And actually,
did not know the committee’s position on this issue until after
the Chamber’s Raleigh trip.
EL: How would you summarize
the stance that the Chamber took?
NR: I think Bob Quick’s
(President of the Chamber) words were the best. He said in his newsletter
column that, “When government takes a private enterprise, especially
in the case of an unwilling seller – this is a heart and soul
issue that the business community cannot endorse.”
EL: In your capacity as vice-president
of Kentucky-American, why do you think Bluegrass FLOW (For Local Ownership
of Water) filed a lawsuit in the Fayette Circuit Court to have the franchise
agreement between Kentucky-American and Fayette County to be held invalid,
and opposed approval by the PSC of acquisition of Kentucky-American
by RWE/Thames (a German corporation)?
NR: I’m not really sure,
I’ll be speculative. I would say that first of all, a lot of
the members of FLOW are members of the NOPE (no pipeline between Louisville
and Lexington) group. The lawsuit was a frivolous attempt to delay
the approval process at the PSC. That suit was dismissed by Fayette
Circuit Judge Sheila Isaac. In the intervention into the RWE hearing
at the PSC, again, I think it was an attempt just to delay the approval
process. I’m sure there are different agendas underlying that
process based on different individuals. The thing that bothered me
more than anything, initially was the xenophobia that surrounded the
issue. Some have dismissed that issue, but I would challenge that
position because some of the original comments were indirectly at
folks of German nationality. Xenophobia sends a very bad message.
The Lexington community depends on diversity, new ideas, new thought
processes, and foreign investment. And at my last check, there are
235 foreign companies in the state of Kentucky that employ over 80,000
people. That’s a large economic driver for this state.
EL: The local newspaper seems
to have endorsed or encouraged acquisition of the water company.
NR: It’s very clear that
the newspaper’s editorial board has taken a pretty strong position
regarding a takeover. One that Kentucky-American disagrees with. Kentucky-American
has asked all the media outlets to report factual information on both
sides of the issue so the community can make an informed decision.
EL: American Water Works is
a S&P 400 company that was founded in 1886 and is the largest U.S.
publicly traded utility in water and wastewater. Why did the company
elect to be acquired by RWE/Thames?
NR: First of all the sale
is a stock transaction. Consolidation in water and wastewater business
is nothing new to American Water Works. So, the consolidation of American
Water Works with Thames Water under the RWE umbrella is no surprise.
This is capital intensive business. For instance here in Lexington
Kentucky-American has invested $60 million in capital improvements
over the last five years. You have to replace aging pipes, add new
infrastructure, and make improvements in water treatment facilities
as well. New EPA regulations are coming, regarding water quality.
Due to the required capital investments, consolidation is something
you’re going to see a lot more of. Especially small systems into
larger water systems where you can gain economies of scale. Consolidation
is a normal, natural process. It’s been happening for years.
EL: Kentucky-American serves
290,000 persons in ten counties in Central Kentucky. How would Fayette
County be able to “take” Kentucky-American’s operations
and services that are provided to clients outside of Fayette County?
NR: That would be another
legal issue that we would challenge. First of all, Kentucky-American
would challenge the right that the government has to condemn in Fayette
County. And second of all, does Fayette County have the right of condemnation
for those facilities in the outlying county areas. I’ve also
heard concerns from some of the leaders outside of Fayette County
about the availability of water for economic development uses. Kentucky-American
works hard to create jobs in our service area. We can do that as a
private entity. If a political entity controls the water service area
hub, maybe outlying counties won’t get the economic prosperity
they are looking for. Corporate ownership takes those political issues
out of the equation. Our job, as Kentucky-American is charged by the
Public Service Commission, is to serve the whole region.
EL: What is Mayor Pam Miller’s
position regarding purchase of the water company?
NR: That would probably be
a better question to ask the Mayor. With the budget issues of the
city, I think the Mayor has been focusing on getting an approved budget
and attending to other priorities in this community. We have a good
working relationship with Mayor Miller and she’s very pleased,
I believe, with the quality service Kentucky-American has provided.
We hope that she would like for Kentucky-American to continue to do
business in this community. We’ve been a good corporate citizen
and supported a lot of initiatives from the city. And we pay some
big taxes to her (laughs). Over $2 million a year.
EL: Another issue that has
been pending and unresolved since the late 1980s is an alternate or
additional source of water to meet Central Kentucky’s needs during
a future drought. When will a final decision on this issue be made?
NR: That’s still an unknown,
today. I will say that the consortium, which is made up of Kentucky-American
and many of the surrounding counties and their utilities, are undertaking
a study now to look at what is best to solve this water supply deficit
– from a regional perspective. We’re hopeful that getting
everyone engaged will expedite the process. Time is of the essence.
Lexington and surrounding areas is one of the few communities of its
size on an inland water supply, not on a major water supply. In 1999,
Kentucky-American made a decision to support the Lexington Fayette
County Urban County Council’s recommendation that we continue
to pursue expanding the water supply from the Kentucky River. The
decision process could take some time, but we’re hoping the consortium’s
study will look at all avenues on the Kentucky River as a primary
source.
EL: How concerned are you
that in the near future a drought condition may curtail water service
to the region?
NR: That’s going to be
by the grace of God. Drought is something that could happen any summer,
at any point in time. Kentucky-American has made and continues to
make necessary changes at our plant facilities to add additional treatment
capacity. As far as being ready from a treatment stand point, Kentucky-American
can meet those treatment needs. The real concern is that during a
drought the water supply from the Kentucky River will be inadequate.
EL: If a final decision were
made on where to obtain a second source or additional reserve of water,
how long would it take Kentucky-American to implement the new service?
NR: That depends on where
the water source is located. No matter what the solution, it is going
to take capital to solve the problem. And I can tell you, Kentucky-American
will be ready on a moments notice to provide that capital to expedite
that process. Thames and RWE provide an additional source of capital
at rates that are competitive and even better, at times, than any
government entity can attain.
EL: A number of decisions
have been delayed relating to infrastructure and economic development
in Fayette County; roadways, storm sewers, sanitary sewers, airport
expansion, schools. How serious are these delays to the economic viability
of the community?
NR: As a citizen of Lexington,
I’ll speak from that perspective. When you talk about the public
schools, Fayette County will need over $200 million for new schools.
Roads, streets, and traffic, they are all high priorities for this
community. A lot of people in the community are saying, “why
are we dealing with the water issue when we’ve got schools and
sewers and roads and other things to worry about.”
EL: The Chamber recruited
Bob Quick as its new president about 18 months ago. How is he performing
in this capacity?
NR: The Chamber went through
a thorough due-diligence in selecting Bob. The folks that have interacted
with Bob are very pleased. He is so good with names and remembering
people and making contacts. One of the reasons we recruited Bob was
because we thought he had the personality to engage people and facilitate
and lead this Chamber. He has brought a lot of new ideas.
EL: Lee Todd, president of
the University of Kentucky, has been very supportive of blending part
of downtown Lexington and the UK campus together. Is the Lexington Chamber
in agreement with this development strategy?
NR: The Chamber is very excited
about Lee Todd. We very much support the partnership with the Downtown
Development Authority. How he worked very closely with Mayor Miller
and others to try to get the community and the University engaged
on one accord. Lee has been a really good friend to the Chamber. He’s
been on both Chamber trips, and it’s hard to get two or three
days of his time. He’s got a lot of ideas. He still talks about
things he saw at the University of Michigan campus and how well it
blended with Ann Arbor. This year, I spent some time with him walking
the research campus in Raleigh. The Chamber truly supports his initiatives
to improve Lexington.
EL: How closely does the Lexington
Chamber work with the Lexington Visitors & Convention Bureau?
NR: The Chamber has a real
good working relationship with David Lord (president of the LVCB);
his offices are right next door. Again, I think that’s what Bob
Quick brings to the table as well.
EL: How has the Chamber helped
the Convention Bureau in obtaining the funds needed to complete the
expansion/renovation of the Convention Center and Rupp Arena?
NR: Yes, as a matter of fact
during this last legislative session, Mike Ridenour, the Chamber’s
vice-president, Public Affairs, and I have spent a lot of time on
the Convention Center and Rupp Arena issue. All of us in this community
have spent a lot of time in Frankfort asking for support. I don’t
know what’s going to happen with the budget process but we’re
hoping that between the Chamber, the city, the Visitor’s Bureau,
that we can get the funding and complete the work at Rupp.
EL: Will the failure of Gov.
Paul Patton and the Kentucky Legislature to finalize the biennium budget
on a timely basis have a negative impact on Kentucky’s economy?
NR: I’m optimistic and
hopeful that the budget will be finalized in the near future even
though a compromise has been elusive. I hope that process does not
take long. I’m hopeful that both sides of the aisle will come
together with the Governor, so we can move forward as a state.
EL: Are you concerned that
freezing substantial portions of the state’s budgets may cause
Kentucky’s economy to go into recession?
NR: I agree it could. I’m
still hoping that there’s something that will break loose between
the parties.
EL: How has your family adapted
to the Lexington market?
NR: My wife Tyra is a nurse
at Central Baptist, we will have been married 20 years in December.
We’ve enjoyed Lexington. We’re both Bowling Green, Kentucky
natives and have moved around the country with the American Water
System. I’ve worked in four different states. Dominique, my older
daughter, is 15, she goes to school at Dunbar. My other daughter is
Ebony. She’s ten years old and is at Rosa Parks Elementary School.
A big part of my family life is involved in basketball and soccer.
That’s my get-away from the “rat race” of day-to-day
business issues.
Ed G. Lane is chief executive of Lane Consultants Inc. and publisher
of The Lane Report.
edlane@lanereport.com
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