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Independent Audit Shows EID in Strong and Stable Financial Position
Contact: Mary Lynn Carlton, (530) 642-4103, firstname.lastname@example.org
FOR IMMEDIATE RELEASE
Placerville, Calif. — During its June 23 meeting, EID Board members received positive financial news as they reviewed and filed the 2013 annual audit.
Government code requires an annual independent audit of the District’s financial records by a certified public accountant (CPA). Richardson & Company, LLP, completed the audit, which examined thoroughly the District’s financial operations.
“The question this audit answers is, Has the financial condition of the District improved or deteriorated as a result of last year’s operations?” said Accounting Manager Tony Pasquarello. “And this audit clearly shows this year’s financial statements reflect a continued stable position for the District.”
The auditors issued an unqualified “clean” opinion that the financial statements fairly present the financial position of the District as of December 31, 2013. “An unqualified opinion is the highest level of assurance that an auditor can provide,” said Pasquarello.
“The most important fact is that the District is in a strong, stable fiscal position,” said Board Director George Osborne during the meeting. “The District is sound and has a very high bond rating—and it saves millions of dollars. Congratulations to our finance department for a job well done.”
2013 Financial Highlights
Operating revenue increased by 16.5 percent due to increased water sales and services. Hydroelectric power generation rebounded in 2013 and earned $7.9 million—a 16.2 percent increase. Facility capacity charges, or “hook-up” fees, were at $5.5 million—more than double over the previous year.
Operating expenses increased 3.9 percent to $43.1 million primarily due to an increase in materials and professional services to pay for previously foregone operating maintenance and repairs costs. Unplanned costs to repair the Caples Lake dam gates also contributed to the increase in professional services. Personnel expenses remained flat, increasing by a modest 0.8 percent.
In 2012, EID became one of a few public utilities to implement a key provision of the cost-saving Public Employee Pension Reform Act (PEPRA) four years early. Between 2013 and 2017 this will save EID ratepayers an estimated $3.1 million. “More than that, it sets the stage for the vast majority of unfunded liabilities to be paid over the next 30-plus years,” said EID General Manager Jim Abercrombie.
Long-term debt continued to decrease in 2013, with a $7.4 million reduction from the prior year. Since 2009, EID’s long-term debt has decreased by $30 million, or 7.7%.
“Debt ratios vary widely across industries, and capital-intensive businesses such as utilities often have higher debt ratios than other industries,” said Mark Price, EID’s finance director. “According to Moody’s Investor Services, we’re right in line with that.”
“We continue to plan right-sized capital projects and intelligently manage the debt for projects that require it,” said Abercrombie. “As we improve our debt service coverage to be in line with industry average, we position ourselves for a potential bump up in ratings—which would allow us to even more beneficially manage our debt. But what this audit clearly shows is that we’re not over-leveraged—we’re right in line with industry average. And with modest CPI-based rate increases and smart management of our business, the financial stability we enjoy now will continue in a sustainable way into the future.”
EID is a public agency dedicated to providing high quality water, wastewater treatment, recycled water, hydropower, and recreation services in an environmentally and fiscally responsible manner.