After weeks of budget work sessions, the Nome Joint Utility has finally approved its financial plan for the 2015 fiscal year.
According to the new budget, the utility will be scaling back operations and labor costs like overtime and holiday pay in the coming year. The budget also reflects a projected increase in revenue, as the utility works to bill customers for services that have gone unenforced in the past.
Utility manager John Handeland, in his report to the board Thursday, listed a few of the cost-saving measures to come — which include stricter enforcement of water and sewer tariffs, and halting Nome’s fluoride injection system on weekends in an effort to curtail overtime.
The new budget also includes a proposed 2-cent rate increase — a topic that was debated at length during the utility board meeting Thursday. Board member and acting chair Carl Emmons said he’s extremely hesitant to adopt an increased rate schedule.
“Once we let them rise and don’t do everything that we possibly can to hold the line…that’s where they’re going to be no matter what happens,” said Emmons. He suggested tabling the budget — and the proposed rate hike — until after a city-commissioned rate study presents its findings in January.
Handeland said while the rate study will certainly factor into the utility’s future outlook, delaying budget approval could jeopardize the utility’s tenuous financial stability. He said cuts to the budget allowed for savings in the new year — but a boost in revenue is still needed to make ends meet. And the utility can’t rely on tariff collections alone.
“We’ll do our darnedest to ensure that we can get this additional revenue,” Handeland said. “But if any of those items don’t come to pass we will be –again — in a deficit position.”
He said that increased revenue would allow the utility to get on top of its finances, and build a savings account for emergencies and long-term projects. He also said that a rate adjustment of any kind is overdue — two decades overdue.
“Twenty years is too long to leave rates without reviewing them. Reviewing the rate schedules can come up at any time and should be looked at on an annual basis in connection with the budget,” said Handeland.
In a quorum of three, utility board members Carl Emmons, Fred Moody and David Barron voted to approve the new budget — with one adjustment: The proposed rate increase would be installed on a temporary basis, taking effect at the beginning of 2015, and reverting to the prior rate schedule in June “unless specifically extended or adjusted” by the board.
The approved budget will now go before Nome city council, which has the final say in whether or not it will be adopted. There will be a combined work session of the Nome Joint Utility and city council at noon on Monday to discuss the budget.
