Springfield Utility Board reports clean audit, outlines $115 million water-plant plan and appoints ex officio to Council

The Springfield Utility Board told the City Council the board's 2023 audit was issued with a "complete unmodified opinion," and outlined near-term capital needs including a proposed new water treatment plant that could cost about $115 million.

Terry Dillon, vice chair, read a statement on behalf of SUB board chair David Willis acknowledging that SUB had not been fully complying with Section 46 of the Springfield Utility Board Charter Authority and that Bruce Weber has agreed to serve as SUB's ex officio representative to the council. Dillon said the board will resume annual reports to the council and that General Manager Jeff Nelson was reminded to attend council meetings specified by the charter.

Cynthia Scoble, SUB's director of finance and information technology, summarized the audit work performed by Moss Adams LLP. "The Springfield Utility Board audit was completed by Moss Adams, LLP'and it was presented to our board of directors on July tenth of this year. It was a complete unmodified opinion on the audit, which means there were no findings within the audit," she said, adding that an initial accounting error (a duplicated revenue recording) was corrected before the audit was issued.

Scoble delivered financial highlights for 2023: a reported operating income of about $16.8 million and an increase to net position of roughly $23 million. SUB said the combined utility has historically invested more than $338 million in plant and added about $17.2 million in plant during 2023. SUB also reported approximately $2.8 million paid to the city as in-lieu-of-tax payments and that it bills the city for wastewater and stormwater collection services, collecting about $534,000 in fees for that work.

Nelson described long-range capital planning, including a proposed new McKinsey/McKenzie Water Treatment Plant that SUB estimates will require significant capital investment over the next five years and identified possible financing tools such as bank loans, special loans, or revenue bonds.

Councilors asked for additional detail on the $534,000 billing fee that SUB charges the city for wastewater and stormwater billing and whether that fee reflects the actual cost. Nelson said SUB would follow up with a breakdown of costs and how funds are remitted "in accordance with what the city's told us, what the rate schedule is." Councilors also asked why SUB shows roughly 33,467 electric customers but only about 21,000 water customers; Nelson explained multiple electric meters on a property (for shops or accessory meters) can raise electric meter counts while water service is typically one connection per property.

The board said it will present annually (proposed in June) and work to improve coordination with council under the charter.

Next steps: SUB agreed to provide the council with the full audit package (already included in packet materials) and a follow-up briefing with detailed numbers on the city-billing fees and the customer-count discrepancy.