3 historic Kentucky coal towns may merge to survive
By BILL ESTEP
Oct. 29, 2017
BENHAM, Ky. (AP) — Three small cities in Eastern Kentucky are feeling their way toward a possible historic merger as they try to cope with aging infrastructure, scant tax bases and revenue lost because of the sharp downturn in the coal industry.
In the process, the merger study for Cumberland, Benham and Lynch could provide ideas for other cities and counties struggling with similar issues in the state's eastern coalfield.
The study will examine the potential for the three towns in Harlan County to save money by sharing services, equipment and administration, which could apply other places as well.
The likelihood of the towns merging is not clear. The study will not be done until early next year; city councils in the three cities will decide after that whether to put the question of merging on the ballot for a vote by residents.
Other Kentucky cities have discussed merging, but few here or elsewhere in the country have done it, said Tad Long, community development manager for the Kentucky League of Cities.
"What they're doing is really something historic," Long said of the three towns. "It takes a lot of strong leadership to even have the discussion."
A merger would be a new chapter in a rich history.
International Harvester began building Benham in 1909 in what was then a remote valley at the foot of the state's highest peak, Black Mountain. The company wanted coal to make steel for its manufacturing operations.
The company created a wholly-owned town from scratch to serve its mines, building stores, churches, a theater, schools, a hospital and about 500 houses, according to local histories.
Less than a decade later in 1917, U.S. Steel, which needed coal for its manufacturing operations during World War I, built its own company coal town just up the valley along Looney Creek from Benham, naming it Lynch.
It was the biggest company-owned coal town in the world, with a company commissary reputed to be the best in Eastern Kentucky, hundreds of houses, striking buildings that Italian immigrants built from sandstone quarried from the surrounding hills, and a population that peaked at about 10,000.
Nearby on the Poor Fork of the Cumberland River, the city of Cumberland grew up as a retail center serving the area.
It's less than seven miles by road from the golf course at the upper end of Lynch to downtown Cumberland, with Benham in the middle, but the towns have spent their lives as distinct places in the narrow valley.
For decades, each had its own schools and sports teams and places to work, shop, worship and play.
Those separate identities continued even after U.S. Steel and International Harvester sold off their houses more than 50 years ago and the high schools were consolidated into one, which later closed.
Many residents still identify with the Cumberland Redskins, Benham Tigers and Lynch Bulldogs of long ago, said Benham city clerk Jessica Smith.
"It's all related back to a statue or a figure," Smith said.
The cities also have continued to maintain separate services such as water and sewer systems.
But like much of the eastern coalfield, they face an uncertain future because of a swift, steep drop in the regional coal industry, which has been battered by competition from cheap natural gas, efforts in the Obama Administration to beef up rules aimed at protecting air and water quality, a rise in renewable energy and other factors.
There were 882 coal jobs in Harlan County between April and June 2017, down from 2,310 in 2011, according to reports from the state Energy and Environment Cabinet.
Throughout the eastern coalfield, the number of jobs in 2011 averaged 14,619 for the year, which dropped to just 3,760 in the second quarter of 2017.
The decline has been painful for workers and their families, but also for businesses and for cities like Cumberland, Benham and Lynch.
Local governments are getting less money from a state tax on coal mining because of the drop in production. People have moved away to find work, eroding tax bases. Older people with retirement income have stayed, but they pay a lower property-tax rate. There are few jobs to bring in people, so houses sit empty after residents move or die.
The estimated population of all three towns has dropped since the official 2010 count, and the number of vacant houses has gone up, according to the U.S. Census.
For instance, the most recent Census estimate is that a third of the houses in Lynch are vacant, up from 26.5 percent in 2010, and the estimated population of Cumberland in July 2016 was 2,059, down from 2,237 in the 2010 count.
Lynch's population was estimated at 694 in July 2016 and Benham's at 459.
Benham received more than $60,000 in the 2013 fiscal year from the state coal-severance tax, but now gets nothing, said Smith, the city clerk.
The city has cut staffing and has not been able to afford an audit in years, which means it can't qualify for some financial aid. The sewer system is failing and the city is thousands of dollars behind on the bill for electricity at the plant.
"We barely make ends meet," Smith said.
Lynch Mayor John Adams said the city has seen a 65 percent cut in coal-severance revenue and doesn't have money for an expensive repair to the water system. The council recently raised garbage rates to help ease the revenue crunch.
"What's my concern? Having enough revenue to run that city," Adams said. "I have cut it down to the bone, laid off employees. I can't do with any less."
Cumberland Mayor Charles Raleigh said the city raised the charge for water after he took office a little over a year ago and has been able to pay down delinquent debts to vendors and repair pumps for the water system.
However, the sewer-treatment plant needs to be upgraded and the city has lost coal-severance income.
City officials and residents in the three towns are working to develop tourism and hope to boost small businesses, and there are some bright spots.
A Christian organization called Meridzo Center Ministries has created several small businesses in and near the cities to try to create jobs, including a coffee shop, a convenience store, a gym, a veterinary clinic, a stable and an operation to grow mushrooms.
Benham is home to the Kentucky Coal Museum, which is in the renovated coal-company commissary, and other historic buildings, including the School House Inn, which was a high school for decades beginning in the 1920s but was converted to a hotel.
Lynch has a unique attraction at the Portal 31 exhibition mine. Visitors tour a restored section of an underground mine where workers produced more than 100 million tons of coal from 1917 to the early 1960s.
Recordings and animatronic displays tell the story of mining and the town over decades, covering technology, safety concerns, union organizing, and the history of the city.
All three towns have been designated as trail towns and are working to develop hiking and horse trails.
Still, it's hard to be optimistic if something doesn't change, said W. Bruce Ayers, former president of Southeast Community and Technical College in Cumberland and executive director of Tri-City Chamber of Commerce, which serves the three towns.
"What strikes me most about the current situation here is the absence of hope," Ayers said. "In what was once three adjacent communities with a combined population of well over 16,000, with amenities that far outstripped those in other rural areas, a vibrant downtown, good schools, and, for most of the time, near full employment, the citizens now see, despite a few bright spots, a pattern of decline."
The chamber decided to study the issue of merger because of a concern over the financial condition and future of the cities.
The chamber said in an application for a grant to pay for the study that the three communities "have struggled mightily in their efforts to maintain basic services to their citizens."
The chamber hired the Kentucky League of Cities to do the study.
Ayers said many chamber members support the merger, but that the body has not taken an official position and is not trying to force support for the merger.
Rather, the chamber wants local officials and residents to have information on how a merger would work and how it would affect the communities, so that people can make an informed decision, he said.
Staffers at KLC are poring over the cities' revenue, spending and debts and looking at how services are provided, how a merger would affect services and staffing, the potential financial benefits of merging and the complex logistics of matching up ordinances.
The study also will assess whether the cities could save money by merging services without combining under one governing council, and make projections on what could happen to costs without a merger.
Residents had plenty of questions at a public meeting the chamber and KLC held earlier this week at the renovated 1922 theater in Benham, including how the city government would be structured if residents approve a merger, what would happen to the existing debt of each town and how a merger would affect legal alcohol sales in Cumberland and at the School House Inn.
Long said that under state law, a merger of the three cities would take the form of government of the largest, meaning it would have a mayor and seven council members as Cumberland has.
The debt each city has would stay in place after a merger, but the new government could seek to refinance the debts in hopes of lowering payments.
And the current thinking is that a merger would not change the status on alcohol sales, meaning a portion of Cumberand would remain wet, the inn would keep its right to sell alcohol under a historic-property designation, and other areas would remain dry.
Chamber president Jeff Wilder said each town also would retain its name even if residents voted to have one governing body.
Each of the three councils would have to approve putting the question of merging on the ballot, and then a majority of voters in each city would have to vote yes for it to go through.
November 2018 is the earliest there could be a vote by residents.
The councils also could approve interlocal agreements to jointly offer services without consolidating under one governing council.
Raleigh said he is not ruling out supporting the merger if the study convinces him of the benefits, but at this point he would be more inclined to support sharing services rather than merging the three governments.
"Whether we're merged or not, we have to work together," he said.
There are concerns in the three cities that merging would wipe out a piece of long-held identity, and some residents of Benham and Lynch worry that a merger would leave them with less influence in the new government because the population of Cumberland is much larger.
"When they go to Cumberland they're gonna own us," said Woodrow Fields, a 79-year-old former miner who lives in Benham.
Supporters of a merger think it would reduce costs, increase efficiency and create better opportunities to compete for federal and state funding because the unified city would have a bigger population.
Ayers said it also could boost hope.
"A new beginning, and this time not as competitors but as members of the same team," he said.
Information from: Lexington Herald-Leader, http://www.kentucky.com