City’s electric fund made big bucks in FY2015
The Cairo City Council finally got its audit Monday night for fiscal year 2015, which ended June 30, 2015, and the report shows significant growth in operating income from the city’s sale of electricity and a reduction in long-term debt.
City auditor Tom Carmichael of Carr, Riggs & Ingram, LLC, presented the audited financial statement to the city council’s finance committee Monday afternoon and the full council Monday night.
The city ended fiscal year 2015 with general fund revenues of $4,073,000 and expenditures of $6,684,000, leaving a deficiency of $2,611,000 which was covered by a $4,778,000 transfer into the general fund from the city’s enterprise funds, i.e., electric, water-sewer, gas and cable.
The transfer of $4.7 million was up from $2.4 million in 2014 and resulted in a surplus of $2,167,000. The actual revenues and expenditures were lower than budgeted the audit shows. Actual revenues were $201,000 more than budgeted with the majority of the increase being $87,000 more in property taxes and $76,000 in “other” taxes.
Budgeted expenses in the general fund for fiscal year 2015 was $7,797,000, but actual expenses were only $6,684,000 which resulted in $1,113,000 in less spending than anticipated. According to Carmichael, expenses of the police department were $219,000 less than budgeted due in large part to salary and benefits being $130,000 below budget and the fee for housing city inmates at the county jail was $40,000 below projections.
The auditor noted that the fire department expenses were $481,000 below budget due to the postponement of purchasing a new fire engine and approximately $60,000 in equipment budgeted not being purchased.
Expenses for public works were $179,000 less than budgeted and $129,000 less for parks and recreation. According to the auditor, the reductions in public works were primarily due to $85,000 in less salary and benefits than budgeted and for parks and recreation the delay in making Holder Park pool repairs and purchasing equipment totaled $120,000 in lower than anticipated expenses.
The electric fund revenues jumped from $18,406,000 in 2014 to $20,567,000 while at the same time expenses only grew from $14,383,000 in 2014 to $14,525,000 in 2015. The electric funds operating income grew from $4,023,000 in 2014 to $6,042,000 in 2015.
By making more money in the electric fund, the city had more money to transfer into the general fund and the audit shows that the city took advantage of that option with transfers increasing from $2,444,000 in 2014 to $4,521,000 in 2015.
While the electric fund showed strong growth in fiscal year 2015, the same was not true for the CNS cable fund. Revenues for the cable fund grew slightly from $2,867,000 in 2014 to $2,953,000 in 2015, but expenses grew at a greater level from $3,066,000 in 2014 to $3,788,000 in 2015.
Operating loss for the cable fund in 2014 was $199,000, but for 2015 the total loss was $835,000. According to the auditor, the bulk of the increased expenses were due to approximately $220,000 in increased program costs and allowances for bad debts of $475,000.
Councilman James H. (Jimmy) Douglas pointed out that was an accumulation of bad debt allowances over a number of years and was being reflected in the audited financials of the cable fund for the first time.
The total CNS deficit, as of June 30, 2015, stands at $4,051,000.
The water and sewer fund continued to operate at a loss, but less money had to be transferred into the fund to make it whole. The city transferred $965,000 into the fund to cover the $598,000 loss and create a surplus of $367,000. The auditor noted that from an operational stand point the fund did not do as bad as it appears, because the 2014 revenues included $320,000 in timber sales proceeds that the city did not have in 2015.
Carmichael also reported this week that the city’s pension liability decreased in 2015 to $3,584,000, but he noted that was based on the actual valuation as of Sept. 30, 2014, and the liability today under current market conditions would be significantly higher.
The audit also reveals that the city is continuing to cut down its long-term debt. The total debt as of the close of fiscal year 2014 was $20,842,000, but by the end of fiscal year 2015 the debt had been cut to $18,524,000.