MMU Commission hears 2015 audit report

MARSHALL – Members of the Marshall Municipal Utilities Commission heard the results of MMU’s 2015 audit on Wednesday. Both utility commissioners and members of the Marshall City Council gathered to hear an audit report presented by public accountants from Hoffman & Brobst.

CPA Liza Zmeskal said the audit report was an unmodified opinion.

“It’s the kind of opinion you want, it’s a clean opinion,” Zmeskal said.

In a financial analysis, the report said MMU’s net position was up slightly from 2014. In 2015, MMU had total assets of about $108.36 million, and total liabilities of about $48.34 million.

The audit report showed that 2015 operating revenue and expenses for both MMU’s electric and water departments were up from 2014. Electric operating revenue was $51.4 million, compared to $47.95 million in 2014. Electric operating expenses were at $48.6 million, compared to $45.28 million in 2014. The majority of electric department expenses – 73 percent – were for purchasing electric power from a supplier.

In the water department, 2015 operating revenue was $5.93 million, compared to $5.2 million in 2014. Water operating expenses were $5.12 million in 2015, compared to $4.31 million in 2014. The water department’s largest expenses were production costs and depreciation costs.

The audit presentation also gave a short overview of major events affecting MMU in 2015. A $12.73 million project to develop a new well field in Sandnes Township, and construct a water pipeline connecting it with the city of Marshall, was completed in 2015. The first flow of raw water came in on April 9, 2015. Starting in 2015, MMU also began buying electrical transmission service from the MISO (Midcontinent Independent System Operator) system, which serves several U.S. states and part of Canada.

Utility commissioners voted to accept and file the 2015 audit report.

Later at Wednesday’s meeting, MMU commissioners had a brief discussion on a major upcoming change to the city’s wholesale supplier of electricity. MMU General Manager Brad Roos said Marshall’s 40-year contract with Heartland Consumer’s Power District will be coming to an end on July 1. After that, 78 percent of Marshall’s power – the same amount currently provided by Heartland – will be supplied by Missouri River Energy Services.

“It’s going to be a significant change,” Roos said, and one that will save MMU money.

Roos said the decision to change electric suppliers was made by MMU commissioners and the Marshall City Council back in 2004.

“But, then we had to wait 12 years, because of the nature of the contract,” he said. The new contract with MRES will also have a 40-year term, Roos said.

MRES is a member-owned organization, and being part of it will lower costs for MMU, Roos said. A memorandum Roos gave to commissioners and Marshall council members estimated the total savings to Marshall electric customers will average over $10 million a year.

Roos said he planned to release more detailed information for MMU customers later this summer, after the change to MRES has taken place.