By Becky Killian, Staff Writer
By Becky Killian, Staff Writer
After months of study, the three citizen members of “Task Force Clean Water” delivered their final report to Salem officials only to have it countered with a separate report by the two elected officials who served alongside them.The reports were delivered during the Monday, Aug. 12, meetings of the Salem Board of Public Works and Safety and the Salem Common Council.
The task force’s original intention – as was outlined in an ordinance drafted and proposed by Councilman Roger Pennington in a surprise move in March – was to deliver one report; however, Pennington claimed the three citizens pushed the South Main waterline replacement project ahead of planned state repaving from the start of their meetings, calling their actions “a one trick pony.”
The citizen members were Tom Jacobs, Becky Dewees, and Jason Cockerill.In addition to Pennington, Councilman Dylan Moore was the other elected official on the five-member task force.
Jacobs delivered the citizens’ report, which was based on visits to Salem’s water utility, as well as utilities in Scottsburg and Georgetown. They also researched records and best practices.
“We did not find any instance of what we would consider gross waste or mismanagement,” Jacobs said of the city’s water utility.
The report states, “Local site visits at Salem found a well-run operation with highly competent and enthusiastic staff along with sound compliance to all known regulations as the water task force understood them to be.”
The citizens’ report indicates that an ongoing reluctance by city officials to raise rates to adequately cover the water utility’s expenses has put the city at odds with a state law that requires these utilities to collect rates that provide “an income sufficient to maintain the utility property in a sound and financial condition to render adequate and efficient services. Rates and charges too low to meet these requirements are unlawful.”
“Under the current rate structure, the water department lives ‘hand to mouth’ month-to-month and does not have an adequate reserve fund at this time to address capital issues such as the waterline replacement project on South Main Street,” the report indicates.
The lack of reserve cash has cost the city more money, with the report stating that a solar panel project was shelved when officials realized it would require a rate increase to pay for the panels that would have eventually resulted in a cost savings. It notes that 93 percent of the city’s electrical usage is consumed by the water utility and the solid waste treatment plant.
The report also criticizes the council for passing up the opportunity to get a $3.3 million bond at 2 percent interest to pay for the South Main waterline replacement project. Two votes were held on the bond issue, with the first happening on Feb. 12, when Pennington, Moore, and Randy Lee voted against it. Those three also cast opposing votes at a subsequent meeting on Feb. 26, when they were joined by Councilman Steve Crane.
“Current circumstances clearly indicate that the decision to table the bond issues was a significant and costly mistake that should be rectified as quickly as possible,” the report states.
The report includes details of a water main rupture in Bedford that happened after a street was repaved. The rupture buckled the newly poured street and forced the city to pursue a $2 million grant to cover the cost of the emergency repairs.
“We most strongly recommend that the elected members of the council rethink their position on the bond,” Jacobs said.
The citizens’ report was followed by the report from Pennington and Moore.
Pennington questioned whether the utility is in dire financial straits. He said the city pays too much for sludge hauling and chemicals, saying the cost increases can’t all be explained by inflation. He also criticized the city for hiring Wessler Engineering – a firm hired by governmental entities across the state – rather than hiring its own full-time certified engineer. He noted the city has paid $3.93 million to the firm in the past seven years.
The bulk of the utility’s water sales, or 54 percent, is to distributors East Washington and New Pekin, Pennington said. Twenty-six percent of the sales are to residential users. The city is projected to have a declining population in coming years that will reduce water demand by about three percent, which Pennington said makes it urgent for the city to push industrial growth to cover that customer loss.
To attract industry, Pennington wants to tap into Lake Salinda as a secondary water source, calling it a “tremendous resource.”
Pennington concluded that the water utility has been “mismanaged,” with late reports resulting in fines, a failure to plan, to seek grant opportunities, and to seek bids for chemicals, saying that failure “has cost a substantial amount of money.”
He said the city should hold rates and pursue cost cutting measures.
Jacobs asked to comment on Pennington's and Moore’s presentation, saying, “Mr. Pennington, I am confused. Of all the meetings we had never did you imply or state there was mismanagement at the water plant.”
The citizen members had provided a draft of their report with the intention of including any input – including dissenting opinions – from Pennington and Moore, Jacobs said.
Pennington said from the start of the task force’s meeting, he and Moore were criticized for their opposition to the bond issue.
Pennington proposed the formation of the task force in a surprise move in March when he presented the ordinance he wrote. That ordinance detailed the composition of the task force. One citizen member was chosen by Mayor Justin Green, and the other two applied for the post and were chosen by a majority vote by the council.
The stated purpose of the task force was to restore confidence in the city’s water utility.