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Port Richey finances continue to improve, auditor says

PORT RICHEY — For the second year in a row, things are looking up financially for Port Richey.

The city had a windfall of more than $700,000 for the fiscal year 2011-12, which ended Sept. 30, accountant Pete Schatzel told City Council members Tuesday night.

Last fiscal year, the city spent nearly $4.1 million to run the city while pulling in $4.8 million in revenue, according to Schatzel's report. The numbers were presented to give the council an early projection of last year's finances, but an official audit is still being completed, Schatzel said.

It's continued good news for a city that in recent years has been on a state watch list for a possible state of financial emergency. The previous year, the city also had a good year with its net assets increasing $588,764, with general revenues of $3 million exceeding expenditures of $2.4 million, according to an audit by the firm Baggett, Reutimann & Associates.

Things are moving along well for the current fiscal year as well, with the city operating in the black $65,000 from October to December, according to a quarterly report Schatzel also presented.

"When you look at where you've come from, you've come a long way," Schatzel told the council.

The biggest drag on the city's finances in recent years has been in its water and sewer fund, which hemorrhaged money due to an aging infrastructure and only two water and wastewater rate increases in 21 years.

But for the first time in nearly a decade, the sewer fund made money for the city in the 2011-12 fiscal year. The fund made $487,323 last year and had net assets of $373,341, according to the report. Schatzel also praised that turnaround.

"You had losses for eight consecutive years," he pointed out.

The fund's turnaround came about after water and sewer rate increases in 2010 raised city water bills an average of $5 a month. The structure of that increase, however, has since been a thorn in the city's side: Mobile home park residents and commercial users complained after their bills skyrocketed, and a recent study found that rate structure was unfair among customer classes.

City Manager Tom O'Neill has also maintained that the city water and sewer infrastructure is in dire need of upgrades, which the current rates would not fund.

Schatzel's report shows the water and sewer fund is in the black for the first three months of this fiscal year by $127,898 in revenues over expenditures. But it's the fund's net assets of $161,804 for water and $38,304 for sewer that have O'Neill concerned.

O'Neill said it's not nearly enough of a reserve and a new rate structure would help build it up. He said an emergency in the city's aging infrastructure could quickly wipe that out and the city would again be borrowing on its general fund to keep water and sewer afloat.

"We don't want to be back there again," he said. "It's just not how a successful business works. Water and sewer utilities need to be self-sustaining."

As a result, the city spent $37,000 for the consultant's study, which proposed a 3.75 percent increase every year for the next five beginning in October. It would amount to an average increase of $1.75 a month for users. The study remains under review by the council.

Port Richey finances continue to improve, auditor says 02/27/13 [Last modified: Wednesday, February 27, 2013 7:20pm]
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