Advisory service finds EES on par with other utilities

By Julie Fann
STAR STAFF
jfann@starhq.com

  
Representatives from a Knoxville-based utility advisory service on Thursday told Elizabethton Electric System board members that, compared to similar area utilities, EES operates well and is efficiently organized.
   "In general, we found the system to be very well operated; it's an excellent utility. We didn't find any major flags or major problems. We looked at the organizational structure and found it to be good in terms of providing a decent product," said Pat Hardy, MTAS (Municipal Tennessee Advisory Service) representative.
   Hardy and MTAS official Bill Young develop utility reports which target areas that need improvement by comparing utilities to other systems that meet similar criteria in terms of kilowatt hour sales and number of customers.
   "The first thing we did was conduct interviews with two members of the board including the board chairman, and then seven staff members. We really appreciated the openness of everybody that we dealt with," Hardy said.
   Hardy and Young reviewed documents such as the union contract, vehicle use documents, and financial statements, then compared EES against other public utilities. They found that, in reviewing audits from 1997-2001, overall expenses had declined.
   "That kind of tells me that there's been some attention given by the board and staff to cut costs. Normally, we see that amount increase," Young said.
   The men advised the board to work toward developing a 10 percent cash reserve based on the amount of EES sales. They also recommended facilitating a more efficient, understandable flow of financial information to board members and staff.
   "What I'd like to suggest is that the board and staff sit down and look at the breakdown of financial information that you as a board would like to see. Not revamping the accounting system. Then contemplate where you want to be five to 10 years down the road," Young said.
   At its monthly meeting, EES accountant Andrea Talbert reported sales for July at approximately $2.7 million, a 6.23 percent increase from the same month a year ago.
   "This hot weather is beginning to show up," Talbert said.
   Operating expenses for July totaled $252,471.63, a 6.11 percent increase from a year ago due to workman's compensation and general liability insurance increases, according to Talbert.
   Compared to July 2001, EES has gained 194 new customers, a one percent increase. Net income for July was up 113 percent compared to last year, a total of $125,867.76.
   EES board members elected new officers due to the addition of two new board members, former mayor Ken Wandell, and Pat "Red" Bowers. Wandell replaces Howard Matherly and Bower replaces Richard Sammons.
   Gary Nave was re-elected as EES board chairman; board member Shirley Hughes was elected as vice chairman (replacing Matherly), and Janie McKinney was elected treasurer (replacing Hughes).