Officials explain county enterprise fund
One of the many difficult decisions being faced by the Washington County Commissioners in sorting out the Devola sewer project – generally estimated at between $15 million and $22 million in capital cost – is how to divide up the way it is paid for.
The county will have two general methods available: property taxes and user fees.
For the latter, the county already has an established enterprise fund. It has operated small sewerage systems for decades.
The county’s enterprise fund exists expressly to collect monthly sewerage bills from customers and pay the expenses of operating and maintaining the systems. County auditor Matthew Livengood said there are about a dozen such systems, including Barlow, Little Hocking, Woodlawn Acres and others. Each customer, he said, pays $70 a month. The fund takes in about $1 million a month in revenue and pays out about the same amount in expenses.
“About 1,250 households pay into that fund now, and it all takes care of that service,” commissioner Ron Feathers said. “That includes debt service, two full-time employees, a part-time billing clerk and operating the lift station and treatment plants, the maintenance upgrades, all specifically for that system.”
The Devola project will have a significant impact on the fund, increasing the number of households by about 450.
“That’s why it will such an effect countywide,” Feathers said. “When those loans start coming due, you have to pay them back, and the customer base will rise but not in proportion to the amount the costs will go up.”
The commissioners have estimated that the monthly fee for customers could go up by $40 or $45, but a firm estimate will require both complete cost estimates for the system and the subsequent decisions on how the system will be financed.
“What’s going to be interesting is the proportion,” Feathers said. “We’ll work closely with the consultants to see how that works.”
Feathers said he thinks of the project financing as two rails – the monthly billing being one, and property tax assessments in Devola as the other. The monthly billing increases will be system-wide to reflect increased costs, but the tax assessment will be applied only to Devola properties.
Although in a general sense, the enterprise fund is used for operating costs and the tax assessment for capital construction costs, Feathers said that division is somewhat obscured. The enterprise fund, for example, does have some small loan retirement provisions. To date in 2019, the account shows $145,880 in principal and interest payments.
“It doesn’t have much debt right now, maybe $400,000 for the Woodlawn Acres project and another one in Little Hocking, about $270,000, that should come off within the next couple of years,” he said.
Other expenses paid from the fund are staff salaries, medical insurance, reimbursements and other personnel provisions, utilities such as gas, electric and telephone, contract repairs, supplies and equipment.
The largest expense by far is payment to other municipalities for sewage treatment, with $427,822 paid to date this year. The Little Hocking system, for example, has sewage treated by Belpre, and the Devola households hooked up to the system have their sewage treated at the Marietta plant.
Although the enterprise fund fees will increase for everyone on any of the county operated sewerage systems, Feathers said the brunt of the cost will inevitably fall on the Devola property owners through taxation increases.
Michael Kelly can be reached at firstname.lastname@example.org
Washington County enterprise fund
• Dedicated to collection of fees and payment of operating and maintenance expenses for 12 local sewerage systems.
• The systems now serve about 1,250 customers.
• The revenues and expenses for the fund are approximately $1 million per year.
• The fund will be substantially affected by the addition of about 450 customers in the Devola system during the coming years.
Source: Washington County Commissioners, Washington County Auditor.