MMU receives audit report for 2013
MARSHALL – Members of the Marshall Municipal Utilities Commission and a few city officials got an update on public utility finances Wednesday evening. Representatives from public accounting firm Hoffman & Brobst presented commissioners with MMU’s 2013 audit report and stayed to answer questions.
In addition to MMU commissioners, the audience for the audit report on Wednesday included Marshall City Administrator Ben Martig, Marshall City Council members Glenn Bayerkohler and Ellayne Conyers, and Marshall City Clerk/Finance Director Tom Meuelebroeck.
The audit report’s financial analysis said MMU had operating revenues of $52.3 million in 2013, an increase of 2.2 percent from 2012. Operating revenue from the electric department came to about $47.4 million, and sales of electricity made up 89 percent of MMU revenues in 2013. Operating revenue from the water department came to about $4.83 million, and sales of water made up 9 percent of revenue, the audit report said.
Total operating expenses were $49.9 million, which was also an increase from 2012, of about 4.1 percent. The report said revenue increases came mainly from increased sales of electricity and rate increases, while the increase in expenses came partly from rising costs to buy and transmit electricity from a regional provider. The majority of expenses, about 67 percent, were for purchased power, the audit report said.
MMU saw a decrease in the value of its investments in 2013, because of some market volatility, said Hoffman & Brobst representative Barry Evenstad.
Total operating income for MMU was about $4.01 million in 2013. City council member Glenn Bayerkohler noted that amount was down by more than $800,000 from 2012.
“Are you concerned about that?” he said.
MMU General Manager Brad Roos said the decrease was expected. MMU uses a three-year cycle when setting its utility rates, and the third year of a cycle typically generates the lowest operating income. Roos said 2013 was the third year of a rate cycle.
MMU Commission member David Grong asked if the audit found any concerns with MMU’s internal financial controls. Evenstad said that, based on questionnaires and audit interviews, MMU had good internal controls, though he cautioned that no organization is perfect.
MMU commissioners voted to accept and file the 2013 audit report.