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Committee urged to shift Spring Hill Water from reactive repairs to asset management; business plan targeted for November
Summary
Mr. Allen presented data showing a reactive pattern of repairs-and-maintenance spending for Spring Hill Water and urged development of an asset-management plan; staff target a business plan by November.
Mr. Allen, presenting exhibits to the Budget and Finance Committee on Oct. 6, said repairs-and-maintenance spending for the water and sewer fund has followed a reactive pattern: low spending earlier in fiscal years followed by spikes in later months when emergency repairs occur.
“...if you were to really drill down into this data and go month by month, you would see low spending earlier in the fiscal year, and then you see these spikes that have budget amendments that go with them. So we're generally reactionary. We're reacting to emergencies and basically running things until they bridal, and then we're fixing them,” Allen told the committee.
Allen traced larger recent expenditures to emergency repairs incurred in FY22–FY24 and noted the current fiscal year (FY25) is only a few months in: the budgeted repairs-and-maintenance line for the water reclamation plant is roughly $375,000 and staff have spent about $19,000 so far, he said. He recommended putting systems in place to manage assets and avoid large, clustered costs.
Miss Holden said staff are developing a business plan for Spring Hill Water that will translate previously discussed items into dollars and timelines, with an internal aim to have that plan ready in November. She said there is an asset-management grant in the water/sewer fund and staff hope to catalog assets, replacement values, replacement timelines, and repair schedules as part of that plan.
Alderman Fuquay asked whether management problems were primarily staff or elected officials’ responsibility; Allen said the issue appears to be staff management, noting the board has funded requests and made budget amendments. Holden and Allen suggested the rate study was conservative and the fund balance is ample to weather unexpected repairs; they also discussed creating a water/sewer-specific reserve or fund-balance policy (staff referenced a 270-day assumption used in the rate study and proposed a 365-day liquidity target in the business plan).
Committee members requested to see the business plan prior to any BPHAC presentation. The discussion was informational; no formal action was taken.
