City must shore up sewer fund

The City of Sisters is going to have to shore up the fund that pays the debt on Sisters municipal wastewater system.

The city received a letter on August 12 from the U.S. Department of Agriculture, which administers the loan, noting "what appears to be the fact that the city's wastewater system is not financially sustainable."

This is a problem that dates back several years.

"When (the city) went ahead and lowered the sewer rates three years ago, they put us in technical default of our sewer loans," current City Manager Andrew Gorayeb explained.

He emphasized the term "technical default"; the city is still paying its debts.

"We were aware of this," he noted. "The USDA letter didn't tell us anything we didn't already know."

The letter further reads, "the city has lost approximately $373,000 over the past three years in current assets, which we feel is the major factor contributing to the current situation, as all other factors seem to be relatively consistent."

Gorayeb explained that, "broadly, it means that the city funded the sewer to that degree over three years and they took that from reserves. We were short."

The city has been reluctant to raise any utility rates during the recession.

Fixing the situation is pretty straightforward. To shore up its sewer fund, the city can either change the way it calculates charges based on equivalent dwelling units, which could bring in more revenue by keying payment more closely to actual usage, or it can raise rates - or some combination of the two.

The city council is expected to address the issue this month.

Author Bio

Jim Cornelius, Editor in Chief

Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.

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