|The water treatment plant in Price Canyon is just one of the many aspects of operating a culinary water system. The plant is largely state-of-the-art, but improvements must be made periodically because of changes in regulations. The PRWID board had to consider what staff call a "bare bones" budget on Tuesday night, part of which affects the operation and maintenance of the water making facility.|
Balancing a budget is seldom a simple task to accomplish and completing the process is becoming more difficult for Price River Water Improvement District every year.
"This is a balanced budget we are proposing to you. But to do it, we cut way too much out of it," said Phil Palmer at a PRWID board meeting on Tuesday. "For the last few years, we have been absorbing the increases in our costs, but we just can't do it with the revenue stream we have anymore. I am asking the board to not only look at the budget as it has been presented, but at how it has been changed since you saw the tentative budget we looked at a couple of weeks ago."
The tentative budget for PRWID for 2005 totals $7,478,860. In the 13-page document presented to the board, the various departments were noted with revenues and expenses for next year.
PRWID's funding sources include water and sewer rates, taxation and impact fees. All the sources must be used to create an infrastructure for all the departments and services that come from the agency, even though some support services generate no income.
The various proposals in the budget include $675,144 for administration, $142,079 for debt service, $17,000 for capital projects, $1,277,550 for water system maintenance and operation, $692,150 for water department capital projects, $1,414,375 for debt service on water and sewer revenue bonds, $737,183 for sewer system maintenance, $346,457 for fleet maintenance, $173,000 for fleet capital projects, $1,782,122 for wastewater plant maintenance and operation, $147,700 for wastewater capital projects, and $74,100 for tort liability costs.
Earlier in the fall, the PRWID departments submitted budget requests based on estimates of what is needed for next year. The staff went through the proposals and cut out unneeded or in some cases, unaffordable.
"We project the revenues for 2005 will be the same as they were for 2004," said assistant PRWID manager Jeff Richens. "Therefore, there was no growth for increases. But we have built in a 2 percent cost of living raise and another 1 percent for merit increases."
Richens also pointed out that health care costs are spiraling upward and that the same benefits employees had in 2004 would cost 24 percent more next year.
"We recently told employees to expect changes in the health care plan because we were sure you as a board wouldn't be able to find the money to cover such an increase," explained Richens.
As an alternative, the staff has been looking at higher deductible rates, dropping emergency room coverages and changing the prescription drug program.
"With doing some of those things, we could get the cost down to about a 13 percent increase," said Richens.
But while increasing labor costs are a major concern to PRWID, the staff also feels something must be done soon to keep the district's infrastructure from getting behind on what it needs to operate properly.
"We're in a very tight spot," pointed out Palmer. "Costs on everything just keep escalating. It doesn't matter whether it is pipe, fittings, equipment or anything. The costs just keep going up."
One matter that arose during the budget review was the cost of energy. Board member Guido Rachiele suggested that the panel members look at more money for utilities as well as for gas and oil.
"Most of the utility companies are placing applications with the state to increase their rates and some of those increases will be large," he said. "We should plan for that."
Palmer also brought up the fact that the district may have to look at outside funding for a number of projects that staff feel need to be done. Those projects include a water master plan, a mapping system for the district and an additional shop maintenance building because the agency has outgrown the single building they now use.
"We have no room for those costs within the budget, so I am asking the board to look for outside funding toward getting those projects done," explained Palmer. "I have talked with the Community Impact Board people and they tell me that it would be best if we asked for all the money for those projects at once, and now is apparently a good time because they not only have money available for grants, but their many of their loans right now can be had for zero percent interest."
While there were no exact figures for the costs of the three projects given at the meeting estimates vary for between $600,000 and $750,000 to get them done.
"The CIB's grant programs are up to 50 percent of the cost of a project, and then the rest could be done with a low or no interest loan," stated Palmer. "How this relates to the proposed budget is if we do apply and decide to go ahead, despite the no interest loan we will still need a way to pay the principal for that portion back."
The board then saw a preliminary proposal by staff on a new maintenance shop that could be put up on the existing location or on some property that may be available to the east of the existing PRWID complex. The proposal showed detailed drawings of a new building, how it would be utilized and how it would create better spaces for employee to work in. They also explained how cramped the present building is with all the maintenance forces for both infrastructure and fleet working in the same facility.
"I see the need here, but there may be an alternative to building a new shop," said board member Tom Matthews. "What about PRWID purchasing the old county shops on Carbonville Road to solve the problem. When the county gets their new shop and ambulance garage built, that building may become available."
Staff members said they wouldn't be against that idea, although it might be somewhat cumbersome since it is some distance from the rest of the PRWID complex.
"I am asking the board to give us permission to at least put together some funding applications to handle these projects so we can see what is available," stated Palmer.
The board asked a lot of questions about both the proposed budget and the plans that the staff have. But the main question boiled down to how the agency could save money in some areas to help in others. Inevitably the question of raising water rates and or taxes to fund increased costs came up as well..
"This is the tightest budget we have every proposed to a board," said Palmer. "I am not comfortable with us having to dip into reserve accounts to pay the bills, and we have been doing that. With the costs escalating, we may have to ask for increased rates at some point."
Karl Housekeeper, the mayor of Wellington, and the vice chair of the PRWID board said that he thought that the district has been very efficient in the service of it's customers.
"Look what PRWID is charging for service per month," he said. "Right now the maintenance fee per household is $3, while ours in Wellington is $15. It think that is way too low a cost."
But a rate increase in both water and sewer rates would not be the only answer. Right now the district has a mill levy of .000599 but it could be raised to .000800 under state law. However, the board felt reluctant to do that unless it was absolutely necessary.
"I guess I would like to know what kinds of revenues various scenarios would generate in terms of dollars before I could consider anything," said board chair Keith Cox. "I would like to see the board direct the staff to put together some figures on both rate increases and a tax hike."
The board voted to not only do that but also gave the go ahead to allow staff to put together applications for grants and loans. They also took the proposed budget under advisement. The budget for 2005 will be approved at a December meeting of the board.