Albany Water, Gas & Light Commission interim General Manager James Taylor, left, and WG&L board member Bob Hutchinson discuss the utility’s proposed Fiscal Year 2014 budget during a Budget Committee meeting Monday morning.
ALBANY, Ga. -- The Budget Committee of the city's Water, Gas & Light Commission was updated on the latest draft of WG&L's Fiscal Year 2014 budget during a called meeting Monday morning.
The budget, which may be approved by the utility's board as soon as its May 30 meeting, calls for $127,571,427 in revenues, a 3.78 percent increase from WG&L's current $123 million budget.
"I think it's important to note that this is only a draft; our budget will go through a number of changes before we offer it up for approval," utility Finance Director John Vansant said. "That's the nature of utilities. You're dealing in best estimates, not absolutes. No one's found a way to control the weather."
Vansant told the Finance Committee the new budget has relatively modest increases in targeted gross profits that would only significantly impact ratepayers if the utility fails to reach those figures.
"Increases would only come into effect if we have lousy weather and are not able to hit our targeted numbers," Vansant said. "But you have to have a (contingency) plan in place. We've had two extremely mild winters in a row and one of the mildest Augusts we've ever had. That cuts into consumption and affects our bottom line."
One area of WG&L services that will see significant change in the coming fiscal year, and was discussed at length by the Budget Committee, is the utility's telecom department. With around 100 current customers, WG&L officials are considering a plan to dramatically increase the telecom user base.
"I'll say this," City Manager and interim WG&L General Manager James Taylor said. "We're at a point where we need to grow telecom or get out of the business."
Vansant said WG&L is considering a business plan developed by consultant Jason Gant that calls for considerable investment in new equipment in the coming fiscal year (a proposed $885,000) but takes the department into positive cash flow by FY 2016.
Committee member Bob Hutchinson expressed concern over the plan.
"I don't feel comfortable voting for something when I don't know what this guy (Gant) is doing," Hutchinson said. "We're talking about spending almost $1 million on a department that's already operating in the red. I have a problem with that."
Lee Hauesler, WG&L's assistant general manager for administration, said the utility is working with Gant to put together a plan that would include the hiring of a full-time employee who would sell and market telecom services as well as provide technical know-how.
"We expect (Gant) to apply for the job when we advertise it, but we also expect to get other applicants," Vansant said. "We'll get the best person for the job."
Taylor said the plan must make the department a viable operation.
"To sustain that, we need to add a minimum of eight customers a year," he said. "We have to keep in mind that any (department) exit strategy we come up with is not going to allow us to recoup the investment we've made."
The budget draft projects modest increases in water (2.07 percent), gas (6.07 percent) and light (2.69 percent) revenues but a huge increase in the telecom department (a 36.99 percent increase to $2,749,966). Most of the telecom increase comes from proposed equipment upgrades.
The water department's proposed budget also includes some $864,500 in equipment upgrades, while the light department is budgeted to get $1,395,000 in new vehicles and equipment.
"At some point, this equipment has to be replaced," Taylor said after Hauesler noted that most of the vehicles scheduled for replacement were approaching 200,000 miles of usage. "These bucket trucks and line trucks are really getting long in the tooth."
Hauesler then added, "Because they're on this list, though, doesn't mean we have to have them. We try to strike out anything we think we can live without."
Hauesler, Vansant and staff plan to meet individually with all members of the five-person WG&L board to answer specific questions about the proposed budget. If all questions are answered, the board could vote on a final budget at its May 30 meeting.
"We don't have to have a budget in place in May, though," Taylor said. "As long as we've passed a budget by June 30, we're fine. If we have unanswered questions, we can have a special call in June to approve the budget."