ST. LOUIS — The city of St. Louis hasn't ensured there's enough water revenue to adequately maintain its water distribution system, resulting in the deferral of needed repairs and improvements while estimated costs for those projects increase significantly, according to Missouri state Auditor Nicole Galloway.
Those are the findings Galloway's office issued Thursday in an audit report on the of city's Department of Public Utilities that rated the department "fair."
The Water Division also risks violating bond covenants by not performing necessary maintenance on the water system, according to the audit.
The audit states, "Significant increases in water rates will need to be implemented in order to finance needed improvements."
The estimated cost of needed transmission main replacements and improvements was $77 million and the cost of needed repairs to the Chain of Rocks pump station was estimated at $30 million, according to the most recent rate sufficiency studies completed for the Water Division, as cited in the audit. The same projects had been estimated at $17 million in 2013 and $6 million in 2015, respectively.
Water rates haven't been increased since 2011, although since then four rate sufficiency studies recommended a rate increase to make needed improvements, the report says. Biennial rate sufficiency studies are required by the city's water revenue bond indenture to analyze the Water Division's compliance with current bond covenants and assess if the division has sufficient revenue to cover operating costs while making needed capital improvements, according to the audit.
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