City sewer service in debt, accountant warns after audit
Troy City Council members, several of whom are new to the process, were treated to a reading of the city’s 2010-2011 Fiscal Year Audit, and discovered some unfortunate news about the city budget.
“I’m glad such bad news could be presented by such a professional,” said mayor Tony Brown of the audit.
The professional was Nicole Noonan, an accountant from St. Regis, and the bad news? Troy’s sewer funds were deep in the red.
With no reserves in sewer, and instead a deficit, Troy could be found in non-compliance with a million-dollar bond from the state. This could have serious repercussions for the city.
It was Noonan’s opinion that if Troy made headway on its sewer debt, the state wouldn’t intervene.
But if the town didn’t, the state could take over at the local government level to try to balance the city’s budget.
The $34,000 the city was in the hole at the end of 2011 may not seem like an insurmountable figure, but with sewer costs monthly costing the city $10,940, the only sort of solution would be a long-term one.
Troy residents already pay $34.27 a month, with no usage rate. This rate is high compared to all but the highest-use facilities in Libby, which pays $26.63 a month. Every additional thousand gallons adds $2 to the bill.
Troy’s rate, one of the highest in Montana, was largely a penalty for a small town with a regular-sized sewage system. Even so, Brown was loath to even discuss a rate hike.
“I don’t want to raise rates,” he said. “Unless it is absolutely necessary. Even then I don’t want to raise them.”
Paradoxically, the power fund is well in the surplus, but city funds can’t be juggled from surplus to deficit areas, much to the consternation of Brown and the Council. In fact, the only time funds can be moved is when surplus is double what expenditures are.
The yearly expenses on power hovers near $1.2 million, so a surplus could only help the beleaguered sewer system when it reached $2.4 million.
“I don’t see how you can keep up without raising rates,” Noonan said. “If you want to fix it, you have to fix it long term.”
Perhaps, Troy could drop power rates and raise sewer, leading to no burden on the taxpayer but a leveling of the rates.
Whatever Troy decides to do, the city must make headway on its sewer debt or potentially face state intervention.
In other Council news…
• The Safe Route to Schools sidewalk grant the city has been working on has been approved. The next step is selecting a contractor.
• Councilman Joe Arts noted an increase of animal complaints as with food becoming scarce, more animals come to human territory.
• A new business, Lions Construction Group, was approved. Its first project will be on the interior of Larson Lumber.
• A deferred compensation plan, essentially an additional, optional, retirement plan, was approved by the Council for city employees.