Monday, May 12, 2008

TOP STORY > >Water department given good grades

By JOAN McCOY
Leader staff writer

An audit of Cabot Water-Works books for the past two years when it has been overseen by a commission shows the utility’s finances are sound and that the controls are sufficient to make manipulation of the books difficult.

“From what we see here, this organization has operated in a financially prudent manner,” Michael Cobb of Cobb and Suskie, LTD, Certified Public Accountants, told the commission Thursday night.

J.M. Park, chairman of Cabot Water and Wastewater Commission, pressed Cobb and accountant Melissa Hodgson about the issue of internal controls to safeguard against embezzlement.

Hodgson and Cobb responded that theft is always possible in private and public operations if employees are determined to steal.

But they said the internal controls at WaterWorks are adequate.

The audit shows that expenses were up in 2007 over 2006, from $3.8 million to $4.3 million because of projects and inflation and that income was down, possibly in part because of the building slowdown, which meant fewer fees were collected. In
2006, WaterWorks’ revenue was $6.1 million compared to $6 million in 2007.

But with 10 months of operating capital in the bank, Cobb said WaterWorks is in an enviable position compared to some smaller utilities where rates are lower than they should be to pay for maintenance and growth-related projects.

The audit shows WaterWorks has $9.5 million in unrestricted assets that will go toward the $11 million needed to build a water- line from Gravel Ridge to Cabot to connect Cabot to Central Arkansas Water.

In other business, Tim Joyner, WaterWorks director, told the commission that the wastewater treatment plant that opened late in 2007 is operating well, but the bugs are still being worked out of some of the monitoring systems. Until they are, the construction company over the $15 million project won’t be paid the last $58,000 for the work.

“Hopefully they’ll have all this wrapped up in a week,” Joyner said.

Work is progressing on landscaping and roads at the new plant and the grand opening is still scheduled for sometime in the fall.
Commission Secretary Bill Cypert said when the plant opened that when it was completed he would drink a glass of the treated water. He said Thursday night that he intends to make good on his promise and will expect news cameras on hand for the occasion.

Opening the new plant brought the city into compliance with state and federal discharge regulations but now the problem that must be dealt with is groundwater infiltration into sewer lines.

Joyner said $250,000 was spent last year replacing broken lines at Greystone that were not properly installed and that line replacement this year at Lindu Lake and Hickory Bend and Greystone Boulevard have been estimated at $325,000.

Additionally, work will be done at Shiloh, Turnberry, Magness Creek and Highway 321 to keep water from running into manholes.

“Engineers like having them ground level because they are unsightly but when it floods they act just like a bathtub drain,” Shaw said in a later interview.

“We don’t allow it anymore. Our policy is that they have to be above the floodplain,” Shaw added.

WaterWorks also is in the process of building a $1.5 million, 36-inch sewer line that will extend from the new treatment plant off Kerr Station Road to Locust Street in the downtown area.

The pipe will replace an eight-inch concrete pipe that has crumbled over time and allows rainwater to get into the sewer system.