County Bails Out Brush Creek Sewer District With Loan - The Missourian: Local News

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County Bails Out Brush Creek Sewer District With Loan

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Posted: Thursday, April 18, 2013 1:00 pm

The Brush Creek Sewer District is having trouble paying its bills.

Therefore, the Franklin County Commission Tuesday approved loaning the sewer district up to $25,000 to help cover costs.

The loan was needed because the sewer district was going to be about $7,000 short of what it needs to make its monthly payment on a United States Department of Agriculture loan May 1, said Chief Deputy County Clerk Kathy Hardeman.

Financial Problems

Just because the county is loaning the sewer district up to $25,000 does not mean all of the money will be used, Hardeman said.

Hardeman, who monitors the sewer district’s finances, said the extra money will be a cushion in case other expenses arise that the sewer district cannot afford to pay.

The district has been under financial stress lately because of problems with the sewer system.

The sewer district has recently faced higher-than-normal costs from Water District No. 3, which manages the sewer district.

“That is putting the district in a bit of a bind,” Hardeman said.

For instance, the water district had extra work in January when there was a sewage overflow at the Shaw Nature Reserve, Hardeman said.

Likewise, there also have been extra costs since a full review of the sewer system is taking place to identify problems, she added.

Cash Flow

The water district recently submitted a bill to the Brush Creek trustees for about $11,000, according to Presiding County Commissioner John Griesheimer, who also serves as the president of the Brush Creek Sewer District. That large bill hurt the sewer district’s cash flow, he said.

Loans to the Brush Creek Sewer District should come with interest, said Franklin County resident Ron Keeven, who spoke out at the Tuesday meeting.

“We keep throwing money at Brush Creek,” Keeven said.

However Griesheimer said he is against charging interest on the loans.

“I don’t have any intention of charging interest,” Griesheimer said. “It’s all taxpayer money.”

But First District County Commissioner Tim Brinker, who is also a sewer district trustee, said charging interest is a “good point.” Brinker added that he will not lose sight of getting the money paid back.

Sewer district Trustee and Second District County Commissioner Mike Schatz said he is unsure about the idea of charging interest on the loan.

This will be the third loan that the county commission has made to the sewer district.

Prior to the Tuesday loan being approved, the sewer district owed the county $149,500. So if the sewer district ends up using all $25,000 authorized by the commissioners Tuesday, the district will be in debt to the county by $174,500.

One of the prior loans was approved Oct. 26, 2010, and it was for $100,000, and the other was for $50,000, approved Aug. 2, 2011.

The sewer district had started to pay back some of the old loans until problems with the sewage overflow and a lawsuit came up, Griesheimer said. A $500 payment was recently made toward the debt, he noted.

The city of Pacific last month sued the Brush Creek Sewer District for breach of contract. Pacific officials allege that the sewer district has routinely gone over the amount of wastewater that is allowed to be sent to the city’s wastewater treatment facility.

But sewer district trustees dispute some of Pacific’s claims and say they are trying to run the sewer system responsibly.

Rate Hike

The sewer district is estimated to bring in $384,914 this year from fees, connections, late charges and other miscellaneous revenue, Hardeman said.

To help fight future revenue shortages, the sewer district in January approved a rate hike, taking the flat sewer service rate from $43.20 to $45.36. The increase takes effect June 1.

The Brush Creek Sewer District has 349 residential users and 93 nonresidential users, as of last December.

/local_news