Press-Republican

February 19, 2013

Black Brook audit cites utility deficit

By LOHR McKINSTRY
Press-Republican

---- — AuSABLE FORKS — A state audit says financial problems in the Town of Black Brook’s water and sewer districts could have been corrected by just raising fees.

Officials in the Clinton County town responded that it’s not that simple, although they have increased user charges and made other changes following the audit by the State Comptroller’s Office.

‘NOT REASONABLE’

The recently released audit said “town officials were aware of revenue shortfalls and did not take the appropriate action to maintain the districts’ financial stability.

“In addition, the (town) board adopted budgets for the sewer and water districts that were not reasonable or structurally balanced. This resulted in annual operating deficits, declining fund balances and declining cash balances.”

COSTS SHARED

The AuSable Forks-Black Brook Sewer District has 150 users, and expenses at the plant were shared with the adjacent Town of Jay in Essex County. Jay took over the plant on Jan. 1, 2012, so Black Brook no longer runs it.

AuSable Forks is a hamlet partially in both towns.

The report says the sewer district had a $41,000 deficit at the end of 2011. At that time, rates had not been increased for 10 years, the audit says.

“The (Town Council) was aware that the sewer user charges were not sufficient to meet the operating needs of the sewer district, and town officials were considering ways to restructure the rates,” the state audit says.

‘BETTER CONTROL’

That has now been done, Black Brook Councilor Howard Aubin said recently.

“We raised our rates. We’re putting in all new software so we can have better (financial) control. We had a very antiquated (record) system. That will make it a lot more efficient.”

Black Brook has two water districts, serving about 240 users. Deficits in those districts for 2010 and 2011 totaled about $121,900, the report said, although by 2012, it had been reduced to $18,000.

“Budgets contained revenue estimates that were not realistic and included insufficient water rates to fund operations,” the audit says.

The Comptroller’s Office said in the review that Black Brook should review rates annually and increase them if necessary, maintain accurate budget estimates and have a multi-year financial plan for the special districts.

IN-HOUSE REPAIRS

A lot of their problems were due to constant repairs to leaks in the aging system, Aubin said.

“We have been trying to pin down our expenses and get those under control before we even looked at our rates. And we did. Instead of contracting out repairs, we do it in-house now. Every time we had a leak, we had to get somebody to dig it up. We were paying contractor rates. We don’t have to do that anymore.”

Doing their own system repairs is saving a lot of money, he said.

“A lot of things went on behind the scenes that the audit didn’t cover. We’re still trying to find things to improve it (the water systems) and get the financial aspects under control.”

The water and sewer systems were also heavily damaged by tropical storms Irene and Lee in 2011, he noted, and Federal Emergency Management Agency reimbursement for those repairs is coming slowly.

“You’re dealing with an old, old system, and the storms didn’t help us any. We weren’t taking in enough money to pay the bills, and we did increase rates with both sewer and water.”

NEW RATES

The water rates were raised from $37.50 to $50 a quarter for the first 15,000 gallons, then from $2 to $2.50 for every 1,000 gallons above that.

Sewer charges went from $61.25 to $81.25 a quarter for a single-family home, and rates for businesses and multiple-family dwellings were also increased.

Black Brook’s response to the audit, written by Town Supervisor Ricky Nolan, also said they were involved in litigation with the Town of Jay over the sewer plant, which cost them $25,000 in legal fees. Jay withheld its share of operating costs, which Black Brook had to make up, as well, he said.

LAWSUIT

Jay Town Supervisor Randy Douglas said the litigation was not initiated by his town; the dispute was over shared billing for hours worked by the chief sewer-plant operator.

“The only time we withheld payment was in 2011, and their financial woes stemmed back to 2009,” he said.

“Since the Town of Jay has become the lead agency, we have had to pay for numerous issues (in the sewer system). In addition to the cost of a lawsuit and necessary repairs, it (the plant) now runs efficiently.”

Douglas said Jay disputed the hours that the chief plant operator worked, with his town being billed for its share of someone putting in four to six hours of work time daily. A closed-circuit television camera recorded as few as 30 minutes spent at the plant on many days, he said.

Aubin said those problems have been corrected.

“We met with Town of Jay to try to resolve that and go over bills. It’s unfortunate. We don’t want to fight over something like this.”

Douglas said he also did not want to be at odds with Black Brook representatives.

“We help them out all the time. We’re neighboring towns.”

Some of it comes down to Black Brook not wanting to increase costs that many residents could not afford, Aubin said.

“We were looking at handling the problem without raising fees. The comptroller’s report was accurate — we weren’t charging enough. We believe we are now.”

Email Lohr McKinstry: lmckinstry@pressrepublican.com