The Mt. Zion Water Association, a water association for a rural community north of Monticello, is asking the city of Monticello to take it over so that it can take advantage of an offer to have an outstanding note discounted and some hefty fines waived.
Last fall, the state Board of Health assessed $27,000 in fines on the Mt. Zion Water Association for a number of operating and reporting violations. In addition to the fines, the water association owes $69,000 on an outstanding note.
The state Board of Health has agreed to waive the fines and Community Resource Group, a non-profit organization holding the note, has agreed to discount the note significantly, extending the term of the note 10 years, if the Mt. Zion Water Association becomes a part of the City of Monticello’s water system.
Over the last year, Mt. Zion has installed a new board of directors which has made considerable progress in getting the troubled water association back on track and the city of Monticello has contracted temporarily to operate Mt. Zion’s water system, including the billing and maintenance. Mt. Zion, however, is asking Monticello to take it over permanently so that it can take advantage of the offer to waive the fees and discount the note.
The Mt. Zion Water Association made the request Thursday night at the Monticello City Council meeting where Monticello Mayor Allen Maxwell asked for confirmation that the Mt. Zion water rates will adequately cover the cost of operating the system and making the note payments.
While Mt. Zion didn’t have a written cash flow analysis to provide the council, a representative from Community Resource Group said the water association has a relatively healthy cash flow. The projected water sales are between $4,500 and $5,200 per month and expenses are between $2,000 and $2,400 a month, which includes the cost of the water, maintenance, and the debt service.
He said the system is operating fairly efficiently now and credited the city of Monticello’s involvement in helping build the cash flow by identifying all of Mt. Zion water customers.
“We started out with less than 88 customers and now we’re billing between 113 and 115 customers,” he said.
Maxwell applauded the new Mt. Zion Water Association Board in getting the water system back on track. “They’ve done a splendid job of making that thing make money pretty quick,” he said.
Alderman Tim Chase asked if Monticello and Mt. Zion could simply continue operating under the current contract, rather than taking over the system. The current contract expires in three months.
Mt. Zion Water Association Board member Jason Cater said it is his understanding that the fine waiver proposal was an order by the state Board of Health, which is contingent upon consolidation with Monticello.
The city council will likely make a decision in the next few months. If Monticello agrees, the Mt. Zion Water Association Board will present the proposal to its membership for a vote.
Meanwhile, Mt. Zion will provide a written cash flow analysis for the Monticello City Council to review at its next council meeting.