ST. LOUIS – The results of a Missouri audit show that there are problems with St. Louis’ current water system and suggest that customer rates should increase.
State Auditor Nicole Galloway released a report about the St. Louis Department of Public Utilities on Thursday. The department was issued a “fair” rating, indicating room for improvement in several facets of operation.
The audit found that the City of St. Louis hasn’t raised its water rates in 10 years and that the money made from water service might not be enough to keep the water distribution system in good shape. Because of this, some needed repairs and improvements have been put off, and the auditor said that the cost estimates for these projects could increase.
Galloway says that gradually raising rates could help the city’s Water Division “maintain compliance with the division’s bond covenants, cover increases in operating costs, avoid rate shock for customers, and provide funding for capital improvements necessary to maintain the division’s aging infrastructure.”
Larger rate increases, if they stem from an emergency, could cause financial stress on utility customers, including those with low- and fixed-incomes.
St. Louis last raised rates in 2011. The auditor says four rate sufficiency studies since then have called for increases. According to Galloway’s office, a rate increase was only formally recommended to the mayor’s office twice over the past 10 years, and only once in that time has a proposal reached the proper board committee. In 2017, the board rejected a proposal for higher rates.
Other findings in the audit include:
- Improvement for Water Division payroll: The Water Division modified permanent work schedules for some Water Division employees without obtaining approval from the city’s Department of Personnel, resulting in the underpayment of overtime.
- Billing adjustments: The Water Division is forgoing revenue by not billing for water consumption at hundreds of city-owned buildings, spreading the cost of city water usage across city water customers. Only 147 of an estimated 841 city buildings and properties are metered for water use.
- Construction costs: The Water Division has not processed and disbursed construction deposits held in escrow on a timely basis. Deposits for seven projects totaling approximately $45,000 continued to be held by the Water Division.
The St. Louis Mayor’s Office released the following statement to FOX 2 on the newly-released audit:
“We are reviewing Auditor Galloway’s findings and taking her recommendations seriously as the City works to make sure St. Louisans continue to enjoy clean, safe, and good-tasting water.”
According to Galloway, her office initiated audits of the City of St. Louis in response to a formal request from the Board of Aldermen. Click here for the complete audit.