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WPCA weighs short‑term loan as large delinquent accounts, including hospital billings, strain cash flow
Summary
Authority staff reported large delinquent accounts and a major back‑billing to Middlesex Hospital after a meter reading issue; to avoid ending the year in the red, staff proposed a temporary $1.5 million loan from the General Sewer Improvement Fund to be repaid by June 30, 2026.
Board members and staff used the May 1 meeting to examine the authority's near‑term cash position after staff disclosed large delinquent accounts and a sizable back‑billing to Middlesex Hospital. Director Joseph Fasino said a failed or misread hospital meter produced an 18‑month catch‑up reading that generated a correction in the hundreds of thousands of dollars; staff said the correction was communicated to the hospital and its attorney but that collection remained unresolved.
"When we got that first reading for 18 months, that was where the 400,000 came into play," Director Fasino said, describing the process of reconciling the meter data and the plan to go back up to three years to correct bills where allowed.
To keep funds liquid while collections proceed, staff proposed a temporary interfund loan of $1,500,000 from the General Sewer Improvement Fund to the water fund, to be repaid by June 30, 2026. Staff said the loan would be a short‑term bridge to avoid ending the fiscal year with negative balances if large accounts are not immediately resolved.
Board members pressed staff on collection tools and limits. Several commissioners urged aggressive collection from commercial accounts; others warned that shutting off service to residential customers could create public‑health problems. The board discussed liening properties, payment plans and the role of the administration in authorizing disconnections; staff said shutoffs require following public utilities procedures and that prior administrations had been reluctant to pursue disconnections in many cases.
Next steps: staff said they would continue outreach to large delinquents, report back on hospital negotiations, and move forward with the proposed short‑term loan if collections do not materialize in time to avoid a cash shortfall.
Why it matters: large delinquencies and a major correction to a single customer's account can materially affect cash balances for utility operations and capital plans; the loan is intended to protect ongoing operations while staff pursues collection.
