City falls short by nearly $1 million in sewer, water fund
By Barbara Arntsen
Published in News on May 25, 2004 2:04 PM
Goldsboro's water and sewer fund is facing a deficit of nearly $1 million, and if that debt is carried over into the next fiscal year, the city might not be able to sell sewer bonds to finance a recent annexation, the city manager said.
Some of the deficit was caused by less water consumption than projected, but most is due to sewer bills not being paid by towns, said City Manager Richard Slozak on Monday during a City Council workshop.
The council also discussed a dramatic rise in health-care costs and later held a hearing on the budget in which historical organizations asked for more money.
The city has a contract with Walnut Creek to provide sewer service to the village. Walnut Creek was scheduled to pay $339,000 by no later than June. Slozak said that the village has asked for an extension until January, because the grant for the project has just been approved.
The town of Fremont is also more than $400,000 overdue on its sewer payments. Slozak said that since Fremont's town administrator had retired, discussions have been difficult.
Fremont and Eureka, which is also on the sewer system, are trying to determine why Eureka's bill for sewer service has been much higher than its meter readings.
But Slozak said, "The sewage we're treating is greater than what the individual meters are saying."
Goldsboro Councilman Charles Williams said that if Walnut Creek was unable to pay, then "we're all in trouble."
Slozak said the deficit could hurt the city's ability to pay for its recent annexation of an area north of town. The cost of extending sewer lines to the area is estimated at $7 million. The city plans to pay for them by selling bonds that voters approved several years ago.
"This could hurt you on your bond sale, because it's not an asset until you collect it," he said of the money owed. "When we go to sell the bonds, they look at our finances, and this would show as a deficit."
Williams said that if it hurt the city's bond sale, then the city had to collect the money.
The council agreed that Mayor Al King and Slozak would talk to Walnut Creek officials about getting the payment in June.
"We need to be paid," King said. "We'll talk with Walnut Creek to see if there are legitimate reasons why they can't pay us."
Health costs
Last year's premiums for employee health insurance cost the city $1.6 million, but they will jump to over $2 million for the next fiscal year.
Slozak said the city had five large claims, over $85,000 each, last year.
"I'm hoping this is an anomaly," Slozak said, "and that we'll have an opportunity to build up the reserve."
Slozak said the administering company, Accordion National, based in West Virginia, suggested a 43 percent increase instead of the 20 percent recommended in the budget.
The city is self-insured but pays Accordion National about $170,000 to administer the policies. The rest of the money is used to pay claims.
"I don't know if the 20 percent will be sufficient," Slozak said. "I may have to come back with an adjustment mid-year."
The claims this year came from one retiree, two dependents and two employees. The health problems included heart and kidney disease and cancer.
Slozak said he couldn't recommend modifying the program, because he was afraid any more changes would "water it down" too much.
Councilman Chuck Allen asked about the general health of city employees and whether the city had a health program.
Slozak said that employees were instructed by a full-time nurse on staying healthy, and that there was also $250 per employee budgeted for annual doctor's exams.
Mayor King said that rising medical costs were a problem for cities all over the state, as well as for state employees.
"This is a real serious concern," Slozak said. "Our options are to look at whether to provide dependent coverage, having the employees pay a percentage, totally gut the program or keep on pumping money in it."
Right now, he was recommending putting the money in, but he said he wanted the council to be aware of the situation.
Councilman William Goodman opposed any thought of exempting dependents, because he said that most city employees fell in the low- to moderate-income range.
"If they don't get it from the city, they'll lack health care," he said.
Slozak attributed the increased cost of health insurance to why there was no cost-of-living increase for city employees.
"That money's eaten up by insurance," he said.
Budget hearing
Later in the day, Goldsboro residents had their chance to voice opinions about the city budget, but only three people spoke at the public hearing.
Emily Weil and Gloria Flowers, representing the Wayne County Historical Association, asked the council for $5,000, an increase of $2,500 over what the city has been giving for the Wayne County Museum.
Mrs. Weil said the association appreciated the $2,500 a year it has received over the last decade, but it needed more. She said the museum needed new electrical wiring. The current wiring was installed in 1924.
"We're running extension cords," she said.
Ms. Flowers said the electric bill each month ran close to $2,500.
Lloyd Massey, president of the Old Waynesborough Commission, also asked for additional money for the historical village. Massey asked if the $10,000 donation from the city could be increased to $20,000.
He said that the city had given $20,000 until a year or so ago, when it was cut to $10,000.
One of the projects that the commission is involved in, he said, is a trail from Tennessee to the coast that will run through the area.
The council plans to vote on the budget on June 7. Another workshop is scheduled for Tuesday, June 1.