For fiscal year 2010 ending June 30, the public utility netted a slight 1.6 percent sales increase in the Electric Division, but sister operations in the Water Division and Wastewater Division were down 6.8 percent and 2 percent respectively.
Ken Webb, manager of CU’s Accounting Division, gave the less-than-stellar financial report Tuesday to members of the Cleveland Utilities Board.
“You have heard me say this before and it’s still true,” Webb said in the formal monthly session at Mountain View Inn. “Our financial results are linked closely to the weather, the economy and other variables over which no one person or group has any ability to control.”
He added, “This year is a good example of this happening. Although in some months of the year we had weather that should have created really high demand, the results were tempered by the sluggish economy.”
The lone positive report came in the Electric Division, which in the past year sold a total of 1.1 billion (1,078,380,377) kilowatt-hours of electricity for the narrow 1.6 percent business increase. As of June 30, the number of Cleveland area customers buying power from the local utility totaled 29,106, up 217 from June 2009.
“On the average for both the year and for all classes of customers, the combined retail price per kilowatt-hour was 7.9 cents,” Webb said. “This was down from 8.8 cents the previous year.”
The fiscal year’s total revenue in the Electric Division was $87,114,806. CU’s bill for purchased power was $70,884,746 and other expenses tallied $14,671,101. This left a net income for the division at $1,558,958.
“This exceeded both the previous year and the budget for 2010,” Webb said. “The year-end cash balance in electric was $6,793,784 with $2,735,763 of that amount reserved as deposits held from customers. The unreserved balance represents 4.6 percent of fiscal year 2011’s gross budgeted revenue.”
CU’s Water Division didn’t fare so well.
Volume for fiscal year 2010 ending June 30 finished at 2.67 billion (2,668,847,250) gallons and this reflected a disappointing 6.8 percent from the 2009 volume, Webb said. The customer head count reflected less than a 1 percent (.7 percent) increase over 2009, and ended the fiscal year with 29,499 customers.
“All eight classes of customers reported volumes in 2010 (as being) less than in 2009,” the account explained. “The class reporting the largest decrease was sales for resale which were down 94 percent from the previous year.”
The Water Division’s total revenue for the year was $11,279,969. This was almost $1 million less than original 2010 budget projections.
“Not only was revenue from water sales down, but miscellaneous revenue and in particular access fees were down for the year,” Webb said. “The shortfall in access fees is a direct result of the slow economy.”
Access fees refer to new water meters tied into new home construction. The housing industry is still sluggish and this translates into less revenue in water sales. Dry weather conditions might have been expected to help offset this drop in access fee revenue with the assumption being that customers would use more water — but this apparently was not the case.
Water Division expenses for the year were $11,888,625, leaving a net operating loss of $608,656, Webb explained.
“Efforts to control costs were successful in holding cost to less than budget, but this was not enough to offset the nearly $1 million dollar revenue shortfall,” he stressed. “The year-end cash balance in water was $1,943,625 with $523,869 of that amount being held in reserve for fiscal year 2011 debt repayment.”
Although its numbers were also down, the news in the Wastewater Division wasn’t as bad as water. The division’s volume of 1.75 billion (1,745,115,000) gallons was down 2 percent from 2009 and the customer count increased 1 percent to 17,309 customers.
Wastewater revenue for the year was $9,211,199. Expenses were $9,228,960 and this gave wastewater a $17,761 loss for the year.
“This was actually an improvement from the $28,992 loss in 2009,” Webb said.
He pointed out the year-end cash balance in wastewater was $4,843,879 with $1,496,970 of that amount being held in reserve for fiscal year 2011 debt repayment.
“We are not required to hold debt repayment dollars in sinking funds, but we believe this is the best way to be sure these funds are available when needed,” Webb said.
The CU accountant also reported independent auditors are wrapping up their field work at the utility office. Webb said to date he has not been made aware of a need to post any new numbers onto those reported to the board Tuesday.