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Water problems flood Ferriday audit

FERRIDAY— Ferriday’s water problems continue to negatively affect the town’s finances, according to the Louisiana Legislative Auditor’s Office’s annual audit for the 2011-2012 fiscal year.

The audit, conducted by Silas Simmons Certified Public Accountants of Natchez, cited eight findings pointing to problems with the city’s water system. The audit will be presented at the Ferriday Board of Aldermen meeting at 6 p.m. today.

The audit found a $306,922 difference between the general ledger and the town’s computer system for unpaid water, sewer and garbage bills. The general ledger’s balance totaled $930,557 on June 30, 2012, but the balance on the town’s computer system was $623,635.

The outstanding bills accumulated after broken water meters registered water usage where there was none, Mayor Gene Allen said.

The audit tested 15 houses that were registered as large consumers of water. Only three of the houses showed water usage. The remaining 12 customers showed none.

Allen said repeated billing to unused water meters is the primary reason behind the town’s large balance of uncollected bills.

“We have a ton of broken meters in the town,” he said. “Because they are broken, they continue billing houses that may be empty.”

The broken meters may be replaced soon.

“We received a $6.2 million grant that we are planning to use to drill wells, fix broken meters and the whole water system,” Allen said.

The city received the grant in 2010, during former mayor Glen McGlothin’s term.

The funds are a mixture of a $5 million U.S. Department of Agriculture grant and $1.2 million in loans. Allen said the city would advertise the water system overhaul after securing a contract with a water provider.

Allen said his plan is to drill wells near the water plant instead of drawing water from Old River. He also plans to replace outdated water meters and the distribution system.

“If the wind blows too hard right now, we might have water problems,” Allen said. “This project is going to provide us a reliable source of water and allow us to focus on the financial issues.”

Allen said construction on the water system should begin by January 2014.

A contributing factor to the deficit is the cost to run the current plant, McGlothin said. McGlothin said the plant cost Ferriday $200,000 per year to run.

The audit also said Ferriday had a total of 2,405 water customers, but 1,950 of the customers listed were inactive. No customers have been removed from the system in at least five years, the audit said.

Both Allen and McGlothin said the audit’s numbers were incorrect.

“There is no way a city can operate with that many inactive customers,” McGlothin said.

Ferriday has approximately 1,500 active customers currently, Allen said.

Other findings in the audit include:

• A total of $44,911 in meter deposit cash is missing.

The city’s current balance in its meter deposit account is $65,137. The balance should equal $110,048, according to the audit.

Allen said the deficit is a result of previous, unauthorized transfers.

To correct the error, the town must deposit enough money to meet the required $110,048, the audit said.

• The town failed to deposit money into bond accounts. Allen said the solution is simply to ensure money is deposited.

• The audit report was filed five months late. It was due on Dec. 31, 2012, but was filed in June 2013.

• The utility clerk has too many responsibilities. As a result, Allen said JCP Management, the town’s water provider, split up responsibilities. Three people now handle utility payments, instead of one.

• Minutes from the April, May and June 2012 board of aldermen meeting were missing.

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