By Michael Schaffer Managing Editor
The Daily Iowegian
---- — The Centerville Municipal Waterworks for the year ending June 30, 2012 realized an 8 percent increase in receipts and a 2 percent increase in disbursements from the prior year.
Receipts totaled $2,850,081 and included $1,064,121 in charges for services, $81,384 in miscellaneous operating receipts, $7,863 in investment interest, $14,990 in rental income and $1,681,723 in sewer fees, storm water fees and miscellaneous receipts collected for the city. For the year ending June 30, 2011 receipts totaled $2,634,712.
Disbursements totaled $2,621,408 and included $877,845 in operating expenses, $38,187 in debt service, $140,130 in capital outlay and $1,565,246 in sewer and storm water fees and miscellaneous receipts submitted to the city. For the year ending June 30, 2011 disbursements totaled $2,563,377.
The Water Department total cash basis net assets increased by 35 percent to $228,673 from the prior year. The total cash basis net assets June 30, 2011 was $660,813 and on June 30, 2012 it was $889,486.
The Waterworks did work down revenue bonds from the prior year. Revenue bonds for the year ending June 30, 2011 were $592,000 and for the year ending June 30, 2012 were $349,000.
The amount of money the Waterworks has reimbursed the city for contributions to Iowa Public Employees Retirement System has steadily declined since 2010. The Waterworks for the year ending June 30, 2010 contributed $15,776, for the year ending June 30, 2011 contributed $11,261 and for the year ending June 30, 2012 contributed $10,127 to the city for IPERS.
Water department employees have accumulated $7,446 as of June 30, 2012 in earned but unused vacation, compensatory and personal leave time for subsequent use of or for payment upon termination, retirement or death.
The Water Department for the year ending June 30, 2012 received $14,990 in lease rent for office space and water tower space. Two private businesses paid the Waterworks $4,500 in rent for the old water office and Farmers Cellular Telephone Company paid $10,490 for antenna space.
The Waterworks in 2001 agreed to purchase water from Rathbun Regional Water Association for 40 years. The agreement stipulates the Waterworks from 2006 to the end of the agreement must purchase at least 7.5 million gallons of water per month, which, based on current water rates, the Waterworks will be obligated to pay RRWA a minimum of $216,000 per year through 2041.
The Waterworks purchased 217,857,000 gallons of water from RRWA for a total cost of $405,740 for the fiscal year ending June 30, 2012.
For the year ending June 30, 2012 the Waterworks paid the city of Centerville $52,250 for commissioner and administration services.
In fiscal year 2013 the Waterworks received approximately $209,000 from a class action lawsuit. The audit states the Waterworks plans to use the money for major capital projects.
The audit uncovered several situations Waterworks personnel were unable to explain.
One was sewer fees the Waterworks bills and collects for the city. The sewer rates billed by the Waterworks were different than the sewer rates established by the city.
Another unexplainable situation, according to the audit, was billed water rates were different than the water rates approved by the Board of Trustees.
The audit found insufficient evidence the Waterworks collection of water, sewer, storm water and sale taxes were allocated to the proper categories.
The audit found the Waterworks provided free water and sewer service to some non-profits, which violates Iowa code. The code says an utility “may not provide use or service at a discriminatory rate, except to the City or it(s) agencies.”
The audit found the Waterworks may not be properly computing water usage in the billing system. The monthly bill for the city’s largest grocery store was approximately the same as for a family of four.
“It would appear that the largest grocery store in the City would use more water than an average family of four,” states the audit.
The audit found three of the five water board members’ terms expire on the same date, which is not compliant with state code. The code requires board members serve staggered six year terms.
The audit found the Waterworks was billed for approximately 25 percent more water than users showed using during fiscal year 2012. The audit says the variance in billing month to month varied from negative 79 percent to 121 percent.
“While some water loss can be expected due to water leaks and defective meters, the inconsistency and size of the variances seems unreasonable,” states the audit.
The audit questioned Waterworks business transactions with two former board members. Since both are no longer board members the auditing firm accepted the conclusion.
The audit recommended the Waterworks “be more aggressive in collecting past due accounts.”
The audit recommends the Waterworks assess unpaid billings on owner’s property taxes or turn it over to the state or a collection agency.
The Waterworks’ responses to address and fix the multiple situations were accepted by the auditing firm.
A copy of the audit completed by Clive-based certified public accountants Peak & Co. LLP can be found at the Centerville Municipal Waterworks office and at the state auditor’s website, www.auditor.iowa.gov.