Should the fees Denverites pay for sewers be used for such things as snow removal or alley improvements?
The issue came to light after a report from the city auditor, Dennis Gallagher, who was trying to figure out whether the city’s wastewater enterprise fund was being used appropriately. The report questions decisions made by those in the administration of Mayor John Hickenlooper to pay for things such as curb and gutter maintenance from the fund.
While it may seem like a small matter — who cares so long as the money is going toward needed city functions? — paying for such things out of the wrong fund carries a risk.
And we think the city of Denver ought to do a better job justifying the expenses paid out of the sewer fees collected from city residents.
As Gallagher’s report says, inadequate documentation could put the city at risk of having to refund money to ratepayers.
The wastewater fund is an enterprise fund, which means it is self-supporting. It provides storm drainage and sanitary sewer services to the residents of Denver. The wastewater division is charged with ensuring its 150,000 customers are accurately billed for the provision of these services.
As an enterprise fund, its fees should only pay for activities directly connected to its mission.
The Gallagher report says Denver’s Public Works Department “cannot adequately document why certain costs are allocated to the Enterprise Fund, including some service activities and employee costs.”
The report goes on to say that in 2005, Public Works began partially paying for maintenance activities — such as street sweeping, alley improvements and snow removal — with enterprise fund money. Also, beginning in 2003, the fund was used to pay for curb and gutter construction.
Perhaps these are justified expenses to bill to the enterprise fund. But Gallagher’s report points out that Public Works officials provided only limited documentation justifying those decisions.
That’s a situation the city ought to change.
If the city were to be challenged on how it has apportioned expenses to the wastewater fund and couldn’t adequately explain those decisions, the city could find itself in the position of having to refund those costs to ratepayers.
“[T]he City may be non-compliant with documentation standards for enterprise funds and could face legal liability,” the report said.
And if there is any “extra” money lying around, we’re sure the city has some rusting old pipes that need replacing somewhere. Doesn’t every city? Or the city could find itself not having to raise rates. Wouldn’t that be nice?
We hope the city’s Public Works Department takes the steps necessary to dot all the i’s and cross all the t’s where cost justification is concerned.
It may not seem like the biggest deal in the world, but it’s one of those basic building blocks of government services that ought to be done right.
