Audit shows

PUC has

$44 million

in reserves

By RON LARSEN

Journal Staff Writer

NEW ULM--The city's Public Utilities only cleared $914,241 in net income on revenues totaling $28,455,217 in 2002, but its annual audit indicates the 3 percent return isn't going to derail any long-range plans.

That's because its balance sheet shows a hefty $44,212,306 in reserves to keep the utilities' motor purring along in "drive" gear.

While the 2002 audit showed a reduction in total revenues of over $2.1 million from 2001 and operating expenses totaling $27,189,430, about $1.6 million less than 2001, the department's reserves rose by over $1.5 million in 2002, according to the Abdo, Eick & Meyers LLP audit.

Net income was down about $600,000 from 2001's $1,524,348 total.

"The combined balance sheet is a 'snapshot' (of the department's financial position) as of Dec. 31, 2002, at midnight," CPA Kyle Meyers, a partner in the Mankato firm, explained. "There's a timing issue on the meter reading and product purchase with the product being purchased in one month and the meters being read the next."

With investment rates dropping from 6 percent to 4 percent or lower, Meyers said the utilities' investment revenue dropped to a total of $662,683.

"That compares with $808,782 in 2001."

The bulk of the department's revenues in 2002 came from electricity sales which totaled $14,338,932. That's down nearly $800,000 from 2001.

Natural gas sales also dropped, totaling $6,676,920. That's over $1.7 million less than gas sales in 2001.

At $2,261,827, water sales were down only $42,000 from 2001. District energy and wastewater treatment sales both grew over 2001 with district energy sales totaling $755,314 and wastewater treatment pulling in $1,836,409.

Grant income at $18,640 was only $200 below 2001, and all other income totaled $636,084 which was over $120,000 more than the previous year. The $1,931,091 transferred to the administrative fund was about $80,000 more than in 2001.

The department's net income also was reduced from operating income of $1,265,787 by a net reduction of $351,546 in non-operating revenue/expense including $1,064,150 in interest on long-term debt.

The utilities' current and long-term liabilities totaled $22,783,192, down from $28,927,029 in 2001. Its equity totaled $48,312,227, up from $47,079,943 in 2001.