May 27, 2011 by wcobserver
Double Digit Rate Increase Likely
WEST FORK- City officials were caught unaware last week after the water and sewer department transferred $10,000 to meet its payroll without their knowledge or approval. The transfer was made without notifying the water commission, city council or mayor according to several city officials who were interviewed.
Both the Water Commission and City Council will meet this week to reportedly consider a request for an additional funds transfer and a double-digit rate increase to meet the expenses of the water and sewer department.
“It strikes me as odd to be truthful with you,” said Greg Tabor, Chairman of the Water and Sewer Commission who said he didn’t hear about the commission’s financial issues until he received a call from Mayor Hime on Sunday. “We’ve been chugging along for years uneventful and all of a sudden. It just strikes me odd.”
Financial records obtained through a freedom of information request confirm a transfer was made on May 13 just three days after the May 10 city council meeting.
“The answer is no they can’t, but they did and the will need to get approval in retrospect,” said Tom Kieklak, the city’s attorney when asked if the funds could be transferred legally.
Ironically, Michael “Butch” Bartholomew, the city’s utilities supervisor, made his regular monthly report to the council, but never mentioned that the water and sewer department might be in financial trouble.
“I didn’t realize it would be on us that quick,” said Bartholomew when asked why he didn’t inform the council that funds would be needed later in the week.
Kristie Drymon, who serves as both the water department’s secretary and the City Treasurer said it’s the responsibility of the water commission or Bartholomew to inform the council.
Bartholomew said he authorized Drymon to transfer the funds from the city’s general fund after he contracted the city’s auditor, J. Timothy Fulmer in Rogers.
“He [Bartholomew] called me and asked me about it. I told him you’d have to have council approval to borrow money from the general fund,” said Jim Kennedy, Manager for J. Timothy Fulmer.
“If I were in his position, I sure wouldn’t do it without council approval.”
Kennedy said he used the word “borrow” because taxpayer dollars would be transferred to what is called an enterprise account. Drymon explained the department is self-financed and is funded by fees collected from its water customers. At a council meeting in April, Drymon explained to council members that the department does not receive city funds, taxpayer dollars or any state or federal funds.
Bartholomew said he plans to recommend a 14 percent rate increase and an increase in meter deposits from $85 to $100 to the water commission. He said additional funds may be needed from the city’s general fund.
“We haven’t got an actual handle on that. As of right now, we don’t have an exact number,” said Bartholomew, adding “It’s a big problem right now, but it’s something we’ve got to get through.”
Drymon said the city has a $7,083 bond payment due in June.
“My response to that is we’re… I’m not going to enable the continuation of mismanagement,” said Mayor Frances Hime.
“I will not support the bail out on the backs of the people.”Hime said she heard about the $10,000 transfer after it had been made, but declined to say how she found out about it.
Both Bartholomew and Drymon say the financial crunch stems from what is called unaccounted water losses, which is the difference between the amount of water purchased from the City of Fayetteville and the amount of water sold to the city’s nearly 1,000 customers. The city lost an average of 32 percent of the water it purchased last year. Water losses in 2011 have been as high as 42 percent, costing the city nearly $23,000 so far this year.
“It’s been going in the wrong direction for the last couple of years like the economy and it’s something we’ve got to get better on, staying on top of water leaks,” said Bartholomew.
Kennedy said the City of West Fork needs to have more policies in place and hopes the city council will rise to the occasion to put more structure in place.