GLASGOW – The Glasgow Water and Sewer Commission approved last week a Glasgow Water Co. budget for the fiscal year that began Monday of nearly $16 million after staff members discussed it and related documents, including a capital improvement plan of nearly $6 million, in considerable detail.
The budget also includes raises of up to 3 percent based solely on performance evaluations – not across the board – and two new employees, but it does not contain any rate increases for customers.
Jeff Reed, finance and customer service manager, discussed the budget presentation letter, which spelled out the main expenditures.
As part of that process, he reviewed the utility’s debt service, which totaled nearly $1.5 million for this new year and is expected to be around that much for the next three years as well, decreasing by about $537,000 in the 2023-24 fiscal year because a 2012 bond sale, which was a refinancing of some older bonds, will be paid off the previous year.
This year’s budget also contains $4,023,089 from operating reserves that has been being stashed with some of these large projects in mind since a rate increase in 2012, he said.
The largest expense in the capital plan is $2.2 million for Phase 5 of construction of a 24-inch redundant water transmission line from the water treatment plant at Lucas to Glasgow. Phase 4 is under construction now.
Reed said GWC is applying for funding from the Kentucky Infrastructure Authority for Phase 5.
This is also where he noted the budget did not contain a rate increase, though he suggested they could revisit that if the municipally owned utility needed to borrow money to complete any projects.
Though the commission provides primary oversight for GWC, the Glasgow Common Council also has to approve any rate increases. As 2015 drew to a close, in anticipation of extensive work ahead, Scott Young, general manager of GWC, asked the council to go ahead and approve rate increases of up to 3 percent each year for five years. It did, but GWC has only raised the rate once in that time frame.
Other capital projects in the new budget include the Lexington Drive tank rehab; replacing meters and meter reading equipment; remediating the last of seveal identified sewer overflow problem spots, which hasn’t been an issue since other improvements were made down the line, at West Cherry and North Race streets; upgrading the disinfection basin at the wastewater treatment plant and relocating the outfall for the final, treated water from there.
Also during the meeting, the commission approved amendments to the fiscal year that was about to end Sunday to bring it current with actual spending and revenues. The final budget for the 2018 was $13.18 million, compared with the original $16.27 million budgeted. Reed said overall operational revenue was higher than estimated, by more than $60,000, though sewer service revenue was a little lower than estimated, by roughly $12,000.
The main differences in the amended budget, he said, were the nearly $1.8 million in KIA loans received, and they had $7 million in reserve funds allocated for capital projects, but some of those got delayed, so the year ended with use of just less than $2 million of that. Expenses also came in well under budget, but that was also primarily due to the delay of some of those projects, including the deliberate postponement of the rehabilitation of the water tank along Lexington Drive, Reed said.
The water tank rehab was postponed so the tank could provide backup in the event of an issue during construction of the redundant water line.
In addition to hearing other management staff reports, the commission unanimously approved the following:
• Retention of Campbell, Myers & Rutledge for another year for auditing services.
• Amendments to the procurement policy, primarily to update it to reflect a change in state law that raises the threshold for which purchases have to be advertised for bids from $20,000 to $30,000.
• Awarding the fuel contract to Big Meadow Oil, the only company to bid.
• Purchase of radio meter-reading equipment and related software for a total price of $118,450, not including sales tax and shipping, from United Systems & Software, the only company to bid.
• Approved advertising for sealed bids for a surplussed former ambulance that had housed the sewer camera system and the camera system itself and advertising a request for proposals for new meters, once the desired specifications have been determined.