City CFO: Water system losses big

Franklin’s water system has lost more than half a million dollars since 2008 according to Chief Financial Officer Ed Hay.
The city recently raised water rates to a flat $7 per 1,000 gallons. Production cost of that amount of water is about $6.05.
The $556,258 loss since 2008 prevents the city from continuing to rehabilitate the system, Hay said.
“I proposed a rate that’s above the cost because we have to make some money to provide for the continued expansion, as needed, of the facility,” he said. That amounts to a 13 percent return.
Councilman Eugene Foulcard said the city has been subsidizing water costs for years. Hay also noted that there will be a cost of living comparison study each year and rates adjusted accordingly.
“It’s been a long time since rates have been increased,” Hay said. “The only reason this fund has survived is, if you look at the audit statements, you’ll see it owes $2 million to the sewer department. You can’t continue to do that because eventually you’ll cause the sewer department problems. We’re not adjusting the sewer rates, only the water rates.”
Mayor Raymond Harris said the water department is taking many measures to reduce costs, but it is far from enough to account for the loss.