The report (7-13-08) "Silver Lake Assessing Utility Rates" and the possibility of rate increase prompted this letter. The report stated "for the past few months Silver Lake's water system has outspent its revenues." Actually, 2006 and 2007 Financial Reports indicate this has been the situation for more than two years. Evidently a problem wasn't recognized or wasn't taken seriously. Why? Reports show water expenses have increased, sewer expenses have decreased and revenue for both has decreased.
When compared to 2005, water expenses decreased $624 in 2006, but increased $35,843 in 2007. Sewer expenses decreased $4,294 in 2006 and $50,895 in 2007. Spending hasn't been fiscally responsible or in the best interest of customers. Some expenses, wages for example, have been divided equally between water and sewer rather than charged to the department that incurred the expense. Invoice numbers, instead of descriptions, are used on Accounts Payable Vouchers and Expenditure Reports making it impossible to know what was purchased unless each invoice is viewed.
More concerning than expenses, is the decrease in collections (customer payments). When compared to 2005, water collections decreased $12,753 in 2006 and $12,633 in 2007. Sewer collections decreased $11,707 in 2006 and $27,307 in 2007. The sewer rate reduction accounted for some of 2007's decrease. The number of customers and consumption (customer usage) hasn't changed significantly.
Month-end Cash Summary Reports (customer payments) were compared to customer payments listed on month-end Revenue Reports. Cash Summary Reports didn't always match Revenue Reports and Revenue Reports didn't always match bank statements. Also water payments were deposited in the sewer bank account and vice versa.
Billing Journals were compared to corresponding Billing Summary Reports. Consumption listed on the reports was always less than the Journals totaled. Summary Reports summarize the Journals. Therefore, they should match and be printed after the Journals. However, the time printed on the reports indicated they were printed before the Journals.
Billing Journals showed: Customers billed for sewer based on water usage, but not billed for water. Customers billed for water, but not sewer. Customers not billed for either and customers not charged enough because zeros were missing from the consumption amount. In some cases these irregularities continued for months.
Billing and collection practices haven't been in compliance with codes and ordinances. Practices have shown favoritism by not treating all customers equally and fairly. Water service hasn't been discontinued when accounts are delinquent. Liens haven't been filed when accounts became 90 days delinquent. Non-sufficient funds fees weren't always collected.
Before rates can be raised a rate study must be conducted. However, if the study won't find the cause of decreased collections then a complete audit should be conducted. Fiscal responsibility and an obligation to customers dictate the cause is found and rectified before raising rates. It would be a disservice to raise rates if mismanagement or negligence was the cause. Responsibility to make amends shouldn't fall on customers in the form of higher utility bills.
