Under budget for now, water district casts wary eye to future

Thursday, November 9, 2006

EUREKA SPRINGS -- The Carroll-Boone Water District (CBWD) came in $19,000 under budget for 2006, but Office Manager Jim Allison expressed concerns about rising electricity costs going over budget and continuing to rise at the board's quarterly meeting Nov. 2.

Giving the financial report for the fiscal year ending Sept. 30, Allison noted electricity was budgeted at $430,000 for this year but came in at $448,361.31. Last year's cost was $313,731.

Board members questioned a couple differences in expenditures versus the budget, such as audit and legal expense, budgeted at $15,000 this year and next, but only $6,880 was spent. Engineering and administrative services were budgeted at $30,000 this year and $25,000 next, but only $3,494 was spent.

Chairman James Yates asked whether any major expenditures in these categories are expected.

"No," Allison said, "but we like to have a 'fudge factor.'"

He said engineering projects normally have associated consultation costs built in separately from this line item, which is for unanticipated in-house projects they may need the engineers' input on.

The Board looked at Allison's salary proposal before approving the final budget. Variable percent increases were recommended for different employees based on skills and seniority, but all employees received at least a 3.4 percent COLA (Cost of Living Adjustment) raise.

Employment costs are expected to rise by $54,000 next year, partly to hire another employee actually approved for this year.

Yates discussed a change in how the district handles health insurance in the future. Currently it pays 100 percent of the premiums for employees and 75 percent for their dependents.

"We need to look at having employees pay a small amount of their insurance," Yates said. He said it would create the opportunity for spouses to elect insurance at their own jobs.

"I don't want to be forced into carrying insurance if they don't want it," he said.

Allison pointed out the district had saved more than $30,000 when one employee reached Medicare age. He said there is only one employee with a wife whose policy can cover him. The district has 11 employees.

"I'm not anticipating we charge a major amount," Yates said. "It's not to penalize employees."

He also suggested shopping for cheaper premiums by raising the deductible from $500 to $2,500. He noted employees are getting older and premiums are going up and suggested the district might look at the cafeteria plan, which features health savings accounts.

But he said the district will look at these issues next year, and Allison will research different programs.

The Board approved Resolution #2015, adopting the salary proposal.

The 2007 budget increases from $1.6 million this year to $1.8 million next year. Electricity costs are budgeted to increase by $42,000.

On the income side, water sales increased by $87,000 over last year, and came in $27,000 over budget. Allison anticipates $72,000 more in sales next year.

Water sales breakdowns for the four member cities this year are as follows: Eureka Springs, 251,345,900 gallons, or 9.38 percent of the total, up 1.47 percent over last year; Berryville, 564,531 or 21.06 percent, down 12.16 percent; Green Forest, 803,548,500 or 29.98 percent, up 10.84 percent; and Harrison, 1,060,767,900 or 39.58 percent, up 1.28 percent.

The Board approved the 2007 budget with Resolution #2009.

Plant Manager John Summers reported that for the first time in years, in August the district missed the peak period of electricity usage for load shedding, resulting in $44,250 the district will have to pay spread over the next 12 months.

Load shedding involves shutting down the district's connection to Carroll Electric and running on generators during peak electricity demand each month to save costs, which are passed on to the member cities in the form of cheaper water rates. District personnel watch a graph to attempt to determine when peak might occur based on previous peak demand.

"We were watching the computer and it was up at 1 p.m.," Summers said. "We thought, no, it won't go down because it never has." He said normal peak demand occurs around 5 p.m.

"We've been load shedding for 10 years, and we missed it one month out of 40," Yates said. "You don't have to worry about it."

In other business, the Board:

* Heard Summers report the district had a lightning strike and a power failure in the last quarter, resulting in $7,000' worth of repairs, which is covered by insurance.

* Heard McGoodwin, Williams & Yates Engineer Brian Gartside report initial work has been completed on an emergency action plan for the electrical system of the facility's water intake structures. Recommendations include stocking up on spare parts, contracting for annual maintenance and inspection, making the spare transformer a permanent structure and splitting power between the two intake structures to provide greater flexibility in case of a power outage. No action was taken, but the district will consider the suggestions.

The next meeting of the board is scheduled for Feb. 1, 2007 at 10 a.m. at the Freeman-Raney Water Treatment Plant.

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