Rogers water rate increase helps alleviate debt

ROGERS -- The amount of water and sewer use in Rogers is increasing, which following last year's rate increase means good things for the city budget, officials said.

"The bottom line tonight is that we exceeded our budget and paid off debt," said Joyce Johnson, former controller and now business manager. "There were no negative financial indicators."

A portion of the profit, $2.2 million, from fiscal 2016 were used to pay debt from a 2008 bond in June, according to an annual report presented Monday at the Rogers Water and Sewer Commission.

A July 1, 2015 rate increase was reflected by August. Money from the increase spurred the profit that helped with debt relief, Johnson said.

Total annual consumption of water increased 6 percent and 4 percent for sewer, according to a memo sent by the commission earlier in the day.

"It's been a good year for us," Johnson said, noting as positive as the numbers are, they are expected to improve over coming months.

Annual reports accounted for the relatively new participation in Arkansas Public Employees Retirement System, which shares net pension liability for Rogers Water Utilities employees. Accounting for that money meant reflecting a sort of "worst case scenario" or conservative report of city money available. An audit set for early August will provide further clarity, Johnson said.

In the Water Department, cash demand deposits and inventories came in below numbers of 2015. Accounts payable remained steady and residential and commercial expenses were near budgeting estimates. Office expenses and the cost for engineering and field services were all on target as well.

The only item significantly over budget was water purchases, which came in $166,000 over for general expenses and was debt-related.

"Even though we went over budget in water purchases, we landed on our overall budget (goals)," Johnson said.

A total of $102,145 was miscellaneous income. It resulted from unused vouchers the Water and Sewer Departments issued for future access and impact fees in a class action lawsuit in 2010. Those vouchers came back as income because they had an October 2015 expiration date.

In the Sewer Department, most items fell within budget guidelines as well, including meter reading and maintenance, general expenses, field expenses and administration. Sewer maintenance was the only category to go over budget, Johnson said, because many repairs were needed in 2016.

Johnson said she and her staff met with bond consultants to further discuss how they could continue to reduce the debt of the departments. Initial talks estimated as many as 10 years could be taken off of bond repayment timelines based on a $5 million payment.

The departments are also discussing using professional underwriters to manage debt.

"We would get the best use of the most savings with the help of a professional underwriter," Johnson said.

NW News on 07/26/2016

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