WATER SYSTEM EARNS HIGH MARKS IN FIRST YEAR OF CITY OWNERSHIP

Before Cape Girardeau voters approved the city's purchase of the water system from Union Electric two years ago, there were a lot of questions: Would service diminish? Would the water plant operations eat away dwindling fund balances? Could the city take over operations without fees skyrocketing? Skeptics wondered if the city could operate the water utility as efficiently as a private business.

Tom Taggart and water plant employees have proved they can. Today there is little public discussion about the water plant. It operates so efficiently that few citizens even stop to think about it. The fact the system is taken for granted is really a compliment to plant workers and the city.

The city was smart to hire Mid-Missouri Engineers Inc. (MMEI) to run the water utility. The firm operates several other water systems and their experience has paid off.

The first year of operations has gone far better than even the proponents of the buyout had anticipated. Public Works Director and soon to be Assistant City Manager Doug Leslie said the first full year of ownership has been successful from both a financial and operational perspective.

Not only are operations running smoothly, but the plant is generating a profit. A report compiled by the MMEI shows the water utility operation is safely in the black.

Net income from July 1992 to June 1993 was $231,000. That's not bad considering total expenses topped the $3.29 million mark. An 8 percent increase in revenue can be directly attributed to greater efficiency in operations as well as a 3 percent increase in water fees.

That's no small feat. The engineering report revealed that water department revenue was more and expenses less than in the previous two years of operation. Total revenues budgeted were slightly more than $3.3 million, and expenditures came in about $30,000 below what was budgeted. Another $70,000 in savings came from reduced costs for water treatment chemicals. That was achieved through bulk purchasing with other MMEI operations.

Achieving profitability wasn't easy. The system had to absorb more than $150,000 in higher electrical costs that Union Electric had not previously charged. But reduced energy consumption at both city water plants and installation of new high-efficiency equipment helped to offset some of these increases. Replacement of fault meters, and aggressive lead-detection and repair programs also helped to hold costs down.

While it's important to concentrate on today, those directing the city water system also have an eye toward the future, and that's important as well. Fund balances will be used to replace old water lines that are too small and are beginning to corrode. This should increase fire fighting capacity, reduce water loss and provide better service.

Those running the city water system should feel proud of their numbers. It's a job well done.