DuPage Water Commission focuses on construction debt
The DuPage Water Commission will use most of the $30 million loan it is receiving to pay off construction debts it has accrued over the last year.
Only $8 million of the loan will be used to shore up reserves that were mistakenly depleted over the past two years to the tune of $19 million. Commissioners approved a spending plan Thursday that will almost immediately cover $7.8 million of the $53 million in construction debt owed between now and May 1, 2010. The bulk of the expenses being paid now are owed to contractors who submitted bills more than a month ago.
Some contractors have complained that work is almost complete on projects they did, but they've only been paid 10 percent of what they are owed.
Commissioner Don Zeilenga said it is likely the water commission will have to bond, borrow, raise rates or do a combination of any of those three things in order to close the gap created by the spending of reserves on operational expenses. Meanwhile, commissioners are becoming increasingly antsy to learn how the financial missteps occurred and demanded an update at its January meeting on the "forensic audit" being conducted by the specially hired accounting firm.
"We put in a lot of obligations when we thought we had the money and that's what got us in trouble," said Naperville's utility Chief Allan Poole, who is also one of the 12 commissioners. "It seems like a lot of time has gone by without any answers."
It is believed the commission's now-former finance administrator used the reserves to pay bills but never showed the spending on financial documents. They believe the money wasn't stolen, just not properly accounted for.
"The balance was the same amount while we kept writing checks," said Commissioner Jim Zay.
Most commissioners have spoken out against raising water rates to completely cover the loss of reserves. Commission officials estimate that would take an increase of somewhere between 40 and 50 percent to the commission's current rate of $1.48 per 1,000 gallons. Instead, some seem more inclined to take out another short-term loan for anywhere between $30 and $40 million.
The current loan will wind up costing taxpayers an additional $350,000 in interest and legal fees.
Commissioners also agreed to hire another special accountant Thursday to handle the day-to-day operations of the agency while the interim finance administrator focuses on the misspent funds. Interim finance administrator Rick Skiba told commissioners that the accountant he wanted to hire has been working for a few days and already discovered some irregularities, including employees accruing the wrong amount of vacation time. Skiba said the employees weren't receiving as much as they were entitled to, he said.
Debt: Accountant examining finance history