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Rate increases 'vital' to L-EWA operations

Posted: October 26, 2010 3:55 p.m.
Updated: October 27, 2010 5:00 a.m.

The message to the Lugoff-Elgin Water Authority (L-EWA) from its auditors: a consistent, gradual rate increase is basically vital to maintain operations.

“I really don’t know how you can operate without raising rates on a fairly consistent basis,” said Terry Hancock of Sheheen, Hancock and Godwin during an L-EWA board of directors meeting earlier this month.

In 2012, the authority’s debt service requirement jumps from a total of $1.98 million to $2.3 million, which led Hancock to say a steady increase makes more sense than a large hike at one time.

“The point is, you don’t want to go down the road and say, ‘gosh, we’ve got to raise rates 10 percent this year,’” Hancock said, adding that a 1- or 2-percent increase each year lessens the burden.

In fiscal year 2010, L-EWA saw an increase in its net assets, revenues and expenses, according to the auditors’ presentation.

L-EWA’s 2010 end-of-year net assets were listed at just less than $9 million. Net assets increased approximately $118,000. Capital contributions of $176,000 were the primary factor in the increase. With the capital contributions, the authority was approximately $58,000 in the negative,

Most of that loss was due to depreciation, said Hancock.

“We’ve got a lot of assets, folks,” he said. “That’s a substantial amount of depreciation.”

The most significant projects in the past year included installations of a 24-inch water main from the plant to Elgin, new high service pump at the plant and 12-inch mains along both S.C. 12 to Doby’s Mill School and along a portion of S.C. 34.

The top 10 customers in 2010 were Weylchem ($231,000), the Kershaw County School District ($88,200), S.C. Department of Transportation ($31,700), Midlands Investment Group ($29,100), Kershaw County ($27,000), HBD Thermoid ($22,500), Target ($20,500), Mancor ($19,300), Travel Inn ($18,400) and Devi Hospitality ($16,800).

The audit listed a “deficiency in internal control over financial reporting” that’s considered a material weakness, but auditor Marc Wood noted that was simply because the authority doesn’t have a full-time accountant on staff. The auditors said they’re required to comment on the lack of an L-EWA accountant, even though that is not uncommon for small organizations such as the authority.

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