Riggs painted a bleak picture to the council, saying if something doesn't change the city could very well see an approximate $600,000 shortfall in this department by the end of the fiscal year.
One of the major changes is the city's new metering program and the 2,900 meters that have been replaced with state-of-the-art technology. According to numerous sources, including newly elected mayor Gene Zick, the new meters should have generated up to 20 percent more revenue not the opposite.
Early in 2005 the council began talks about the unaccounted for water problems the city's system was facing and how the problem could be aggressively attacked. In May 2005 a representative of Johnson Controls of Greenville, S.C. spoke with the council about a meter exchange program that could save the city money in the long run. This sparked the interest of the council but it took them months before they decided to follow that advise.
Frank Kondracki, who was hired by the city as the engineer for the meter program, told the council in October 2005 that the city was relying on aged water meters and that was the cause of up to 16 to 17 percent of Russellville's water loss. Kondracki told the council the benefits to replacing the meters were many. He also told them they were roughly losing 35 to 36 percent in unaccounted for water through leaks, and he blamed the old meters.
“The meters are only reading like 82 percent of what they should be reading,” said Kondracki in 2005. He added that new meters could generate up to as much as $200,000 a year in increased revenue. He told the council they should regain the initial costs of the project within five years.
But five years may be too late, according to Clerk Riggs, who urged the council to take action as soon as they could to find a solution to the shortfall.
Zick, who has been in favor of the meter replacement program from the beginning and has been quoted saying the city could gain hundreds of thousands of dollars by tightening up the system, said this is just a minor setback and feels confident the issue will be resolved either through locating a possible problem with the new meters or tightening the city's financial belt.
Zick said officials are looking into several variables where a problem could be. The new meters are radio-read and more technical.
“The system has been tightened and a lot of major leaks have been taken care of. If you look at the (amount of) water being purchased by the city from the Logan Todd Regional Water Commission (LTRWC), it has been going down and that is a totally different meter. At the same time the water we are selling to the people is getting closer to what we are buying, which means you are tightening up the system in many ways,” said Zick, who added it could be resulting in a reverse effect.
Another reason, noted Zick, could be the 54 residents that were informed recently they had leaks in the system and they are fixing them. Water conservation could also be a reason, according to Professional Meter Inc., the company which won the bid to replace the meters for $833,678.
Where the council has run into trouble is counting its chickens before they hatch by budgeting 18 percent of those prospective savings in the 2006-07 budget. Zick said they didn't just take someone's word for it, that they randomly tested 34 meters and based their decision by statistical analysis.
“You have to take a risk but it's nothing we can't recover from. We can go in and amend the budget anytime,” said Zick, who said there are many ways to cut the budget.
Another problem facing the council members and the citizens of Russellville is a possible water rate increase by the Logan Todd Regional Water Commission. According to City Attorney Bob Hedges, water bills could see an increase as soon as January. According to Zick, LTRWC is facing repayment of a very large loan with the USDA. They are trying to renegotiate that loan to get the interest rate down. “If they can hold the interest rate, then everything stays as it is, but if they have to go out for new bonds and the interest rates goes up that will have to be passed onto the consumer,” said Zick.
Mayor Shirlee Yassney isn't happy with the shortfall. She said while she understands why the council felt they needed to do something about the unaccounted for water, she was never convinced that new meters would do the trick. “If I thought this was the answer to these problems I would have replaced the meters in 1999 when I came into office,” said Yassney.
City Code Enforcement Officer Bill Decker said the new meters had a lot of benefits as far as it being easier to read and more thorough; however, he wonders if the cost will offsets the benefits.
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