Peachtree City’s Water and Sewer Authority left Tuesday afternoon’s meeting with more questions than answers.
The biggest item on the agenda was a proposed 5.5 rate increase for the next five years. The rate increase was the result of a study of the system in Nov. 2017 by Stantec.
“Wow! Are they a reputable firm?” asked board member Phil Prebor.
ISE, who now serves as the group’s consultant and general manager said the firm is reputable, but also noted the rate hike is based on $64 million in capital improvements. ISE officials said they have pegged the number at $24 million in capital expenditures.
Board member Kevin Madden wanted to know if that was a common increase, and ISE Project Engineer Kim Keefer said it was a significant increase.
The other issue discussed was the authority’s budget. ISE’s Bo Davis showed the current operating revenue at $9.8 million and expenditures at $5.5 million with a surplus of $4.3 million. Davis also showed the authority’s sinking fund account and capital fund at $8.2 million. Together, all expenditures total $13.8 million, which provides nearly a $4 million deficit that would be funded with reserves.
ISE officials said the capital items had been budgeted, but not necessarily built.
“This is all kind of hard to swallow,” said member Mike King.
When asked about how much the authority had in reserves, ISE officials said they were still going through documents since they were just charged with running the authority less than a month ago.
Davis said they would have a more detailed budget at a called meeting Sept. 17 to discuss further financial elements of the authority.