A sobering rate study report on the water and sewer department was presented to the Pangburn City Council at their regular Tuesday meeting on August 14. The report disclosed that the water commission has been operating in the red for quite some time in the amount of approximately $8,000 a month. The water department knew they were losing money, but didn’t know to what extent they were operating in the red.

A table of 2013-2016 revenues and expenses reports that presenter Adam Whitlow shared with the council showed to be very consistent, but in 2015 over $120,000 of debt service that had not been included before was added to the system and payback of long-term bonds for the water treatment plant came due, increasing the debt service to over $290,000. Since that time the water and sewer department has been operating in the red in the amount of about $98,000 a year, or around $8,000 a month.

In addition to operating in the red, the department has upcoming sewer system improvements which have been estimated to cost around $150,000. Normally a balanced department would anticipate having a surplus cash flow of around $8,000 a month. Not only is the Pangburn department running a monthly deficit of $8,000, but they’re also not bringing in a cash flow of around $8,000 a month that would finance necessary improvements.

In the process of compiling data for the report it was discovered that the cost of debt service had not been included when the last rate increase was calculated. As a result, Whitlow said the new figures will generate a significant rate increase. He told the council, it will be “a significant rate increase, but a necessary rate increase.”

According to Mayor Wilson it’s important that citizens realize the Pangburn water and sewer department runs independently from the city government and the council has no say or vote on the probable rate increase. The independent department presented their findings to the council so they would be aware of the impending increase and the possibility of customers contacting the council in response to the increase.

The new rate will actually be what it should have been at the time of the last rate increase if they had correctly included the debt service in their calculations. Preliminary discussions mentioned a $5.00 rate increase for sewer customers and an increase of around $14.00 for water customers. These figures are tentative at this time.

Another topic discussed at the meeting was the proposal for Pangburn to embrace becoming a Purple Heart City. Guest speaker Bill Morton explained the process of becoming a Purple Heart City and asked the council to vote on it. After the council voted for Pangburn to become a Purple Heart City, Morton said he would assist the council through the process.

In other items on the agenda, Mayor David Wilson suggested the city council wait until next year to take any action regarding the house on Austin Street. After some discussion it was agreed upon to wait until after the first of the year to decide what to do with the property.

The council also discussed investing in security doors for city hall, purchasing playground impact material for the park, and contributing $500 toward fire prevention week materials.

Reports from the police department, the fire department, and the first responders concluded the meeting with no outstanding comments.

The Pangburn City Council meets at City Hall, 508 Main Street, the second Tuesday of each month at 6:30 p.m.