Where: Watrous, New Mexico
Problem: Watrous’ water board members needed help to reorganize financial reporting following years of mismanagement and loss of revenue.
Solution:RCAC helped Watrous water board members revise and update their financial reporting, and instructed the new secretary/treasurer in creating an annual budget and tracking system.
The Watrous Mutual Domestic Water Consumers Association is a small utility with less than 40 connections. It serves about 70 people living in this northern New Mexico town. There are no individual water meters; instead, users pay a small flat fee of $24.14 which, in the past, was not collected on a regular basis. Over the years, the utility failed to keep up with record management, nor did it meet compliance standards. It had several reporting violations.
In 2014, the utility appointed a new secretary/treasurer, and also approached RCAC to request financial training for this new position. The utility members were also intent on updating their bylaws.
RCAC instructed the new secretary/treasurer in creating an annual budget, and later helped to review and edit it. The new treasurer followed through with ensuring that water users paid their bills on a monthly basis, tracking each payment and balance, sorting through years of paperwork to begin a reporting schedule, and even learned new bookkeeping software to monitor the proper management of funds. She spearheaded member training, the updating of governing documents and also coordinated meetings to review and update the bylaws.
RCAC then used the new budget template to track the utility’s income and expenses. This led to the development of a basic rate study because the one in use was a complicated and ineffective flat rate schedule which did not accurately reflect water consumption. The study also considered how Watrous could build up reserve accounts.
Following the study, RCAC recommended the utility increase its rates, suggesting fees of $28 for residential customers and $30 for all businesses. The utility board members for now, however, have determined that since the utility has no debt, they will instead focus on collecting all of the outstanding payments from members, and then revisit the rate increase in 2017 to continue building up the reserves after the past years of mismanagement and inconsistent collections. Watrous now has a more organized and efficient board, and can continue to manage the system in a legally and financially sustainable manner.
