The Washington state Auditor’s Office recently sent the Freeland Water and Sewer District a management letter outlining a few issues of concern regarding financial controls.
The water and sewer district provides water to about 1,110 commercial and residential customer accounts, receipting about $469,000 in 2020.
The auditors found that the district has not updated its utility rates through a formal resolution since 2013 and does not have an established policy to periodically assess water rates to ensure the district is bringing in enough funds to cover costs.
In addition, the district bills customers based on location but doesn’t have a written method for determining those rates.
“We recommend the District periodically assess utility rates to ensure the amounts it charges customers reflect their equitable share of cost in accordance with state law,” the letter states. “Additionally, we recommend the District’s Board approve all changes to utility rates through formal resolution.”
In addition, the letter explains that the district rents out a house to a private party and a storage space to a flooring installer and a boating club, but that the district does not effectively monitor the lease agreements.
Also, the district does not have documentation on how it determined market value of the rentals.
The letter says that the boat club’s lease sets rental income at $500 a year, but the amount was reduced to $1 per month through a verbal agreement in October 2018.
The district could not be reached for comment by press time.