The Limestone County Water & Sewer Authority received its first look at an independent audit for 2017 Thursday, which auditor CDPA referred to as a “clean” audit, or “the best you can get.”

Jacob Gatlin of CDPA went through the audit with the LCWSA board of directors at the board’s regularly scheduled meeting. He told the board the audit showed “no unusual transactions” and “nothing seemed out of the ordinary.”

He said there was some “fuzzy math” related to a more than $500,000 hit to the utility toward the end of 2017. LCWSA had to “true-up” with the city of Huntsville to satisfy an agreement between the two entities regarding sewage treatment. CDPA broke that payment down and put it back on the books for 2015 and 2016 “so it wasn’t a total hit on (2017),” Gatlin told the board.

The audit showed the utility had $11.75 million in operating expenses for 2017, compared to $11.71 million in 2016. The utility’s payroll in 2017 was listed at $3,112,593, compared to $3,108,289 for 2016.

In October 2016, the board voted to fire its two managers, its human resources chief and a GIS expert because board chairman Jim Moffatt said it would save the utility about $300,000 per year on payroll. Board member Johnny Hatchett explained the board compensation was higher because of payouts to those terminated employees, which inflated the overall salary numbers. Moffatt pointed out that fringe benefit numbers were lower, however, because those four employees were no longer on the payroll.

Utility debt

Elsewhere in the audit, Gatlin discussed the LCWSA accrued debt principal, which stood at about $98.1 million as of the end of the last fiscal year. He pointed out the utility would pay about $6.2 million each year on its debt service through 2021. That amount reduces to $5.9 million in 2022 and then jumps to $29.5 million in the years 2023-2027.

“The majority of your liability is tied up in revenue bonds,” Gatlin said.

If the utility borrows no more money, and payment plans are unchanged, its total debt service — both principal and interest — will be $166.7 million through 2052.

Also discussed was ongoing civil lawsuits against members of the water authority filed by its two former managers. Gatlin told the board members, who are all named in the suit, that most lawsuits are settled by insurance companies and he didn’t foresee legal action impacting the utility financially.

There is a general statement in the audit that reads, “… there are no proceedings, either singularly or in the aggregate, that will have a materially adverse effect” on the audit. He explained there was little reason to expound upon the statement.

“The more information you put in there that is not applicable, the more people can do something with it for political gain,” he said.

CDPA will be back at the February meeting to answer any questions board members may have about the audit.