ALBANY — Water, Gas & Light Commission board members got what they wanted — a clean opinion — from an auditor during one of their monthly meetings Thursday morning, but Mauldin & Jenkins CPA Craig Moye also offered some sobering financial news.
With around $4.1 million in cash on hand and around $3.4 million in reserves at the end of Fiscal Year 2013, WG&L could operate for only two months if, as Moye said, “all money quit coming in all of a sudden.”
“With $3.87 million in monthly operating costs, that $7.4 million could get you through roughly two months of operation,” Moye said.
City Chief Financial Officer JoEllen Brophy said that’s not a good enough cushion.
“We have challenges we need to properly address today and long-term,” Brophy said. “One of those is building our reserves to a healthier level. Two months is not a sufficient safety net.”
Interim WG&L General Manager Tom Berry offered some good news in that regard when he noted that the annual Municipal Electric Authority of Georgia reimbursement to the utility, which is distributed to all MEAG members, came in at $3.3 million, considerably more than the $1 million WG&L had budgeted.
But, Brophy noted, that funding won’t give the utility an immediate bump in its fund balance.
“While we did get more from MEAG than we’d anticipated, I think most of that money has already been earmarked for specific needs,” the CFO said.
Moye said during his presentation the utility had $105.1 million in assets and $36.6 million in liabilities, leaving it with a “net position” of $68,555,279. When Moye commented that that “fund balance” would allow WG&L to operate for a period of 18 months with no income, Brophy pointed out that the majority of the $68.6 million was in infrastructure and other fixed assets that could not be liquidated.
Moye then adjusted his statement to reflect the $7.4 million in available cash.
The auditor also noted that WG&L has a 53 percent debt-to-equity ratio that put it around the typical 50 percent ratio of similarly sized cities.