The Capital Improvement Fund

The funds for operating the water and sewer department come from revenue sources such as residential and business charges for water and sewer.  These funds are to maintain our system and deliver the water and sewer service. Other funds that are allocated to renew our existing lines are called capital improvement funds.  Things are less clear when we try to discover their balances and expenditures .

The capital improvement funds are designated by law from sales tax revenue.  At one time funds were generic and used for any improvement in the city.  A ballot issue in 2012 called Ordinance 1015 changed this.  The fund was divided into three parts.  A third was to be for the water department, a third for the sewer department, and a third for general use.  Section 4 of this ordinance mandated  a five year plan for improvements in water and sewer infrastructure.  Each year the city council is required to adopt a five year plan for use of the transferred funds.

No five year plan has been created.  Meanwhile the annual state maximum 10 percent of water and sewer funds has been transferred to the water and sewer departments without a five year plan. While  it is not clear, the money appears to have been used for other than capital improvements. The city council is not enforcing the ordinance to correctly appropriate these transfers.

It is difficult to see this because of our reporting system.  The capital improvement funds and the infrastructure and repair portion of our water and sewer bills should be simple and easy to track. Replacement of water lines, sewer lines, and fire hydrants in the city should be a priority. The funds for these projects should not be used for general or administrative expenses or any other uses.