The amount of money going into Rockville’s water and sewer funds is not keeping up with the costs of infrastructure repairs and upgrades, a city financial report released this week said. To cope with costs, the city has issued new bonds and continues to raise rates.
“It’s not going to normalize any time soon,” said Gavin Cohen, the city’s chief financial officer.
In addition to operating expenses for water and sewer services, the city is facing costs for capital projects to replace aging water mains and upgrade the Blue Plains Advanced Wastewater Treatment Plant, according to the Popular Annual Financial report for fiscal 2012. Rockville sets rate increases for a 10-year period, so it will be a while before residents see their water and sewer rates plateau, Cohen said.
“We literally are spending millions and millions of dollars every year that are going to Blue Plains,” he said.
During fiscal 2012, which ran from July 2011 through June 2012, Rockville paid $7 million through its Capital Improvements Program and $2.4 million out of its operating budget toward Blue Plains improvements. The plant has been in operations since 1983, and the improvements will allow it to process wastewater more efficiently.
Although water and sewer usage rates have increased during the past two years, the refuse annual fee decreased in fiscal 2013, the report said.
Rockville’s water and sewer rates were discussed during a Monday mayor and council meeting when city financial staff presented the city’s audited fiscal 2012 financial reports.
The Comprehensive Annual Financial Report said that Rockville is facing the same economic challenges as the rest of the region and the nation as a whole. Unemployment is higher than in past years, and residential and commercial growth has slowed due to the 2008 recession, which means lowered tax revenues for the city.
“The impact of the recession has had a government-wide effect, lowering revenue streams in most areas,” the report said.
To deal with the economic slow-down, the report said, Rockville has “tightened its belt” and monitored its expenditures. Despite the challenges, Rockville is prepared for several more years of flat or reduced revenues, the report said.
Auditors who reviewed the city’s finances for fiscal 2012 gave Rockville a clean bill of health for fairly presenting its financial position and activities. They also found that Rockville had resolved an issue from last year, when auditors found the city had submitted quarterly reimbursement claims for federal grants that did not include all the expenditures covered by the grant for that period.
“I’m very pleased to see such a clean report,” said Councilmember Tom Moore.
During fiscal 2012, the city entered into agreements to outsource management of the RedGate Golf Course and three parking garages in Town Square.
Major capital projects last fiscal year included renovating an old post office in downtown Rockville to house the new police headquarters, expanding the senior center, modernizing the city’s maintenance facilities, and improving water and sewer systems.
A supplementary statistical section at the end of the report provides demographic and operating information about the city. It shows that the city’s population was 62,243, with an unemployment rate of 4.9 percent.
During fiscal 2012, Rockville police made 1,400 arrests, the city issued 793 building permits, and refuse collectors disposed fo 10,829 tons of garbage and 5,508 tons of recyclables.
Rockville owns 69 police vehicles, 16 refuse collection trucks, 1,382 fire hydrants, 3,266 miles of sidewalks and 53 playgrounds.
The Comprehensive Annual Financial Report is available online at rockvillemd.gov/government/cafr. The Popular Annual Financial Report, which provides an overview of the city’s finances, is available online at rockvillemd.gov/government/pafr. Residents can obtain print copies of the report by calling 240-314-8400.