Depreciation cause of loss at Haleyville Water and Sewer Board

HALEYVILLE - A net loss for the Haleyville Water and Sewer Board is due to depreciation according to an audit by Rick McCabe, owner of McCabe and Associates of Fayette, it was learned at the recent board meeting on Tuesday, July 24.

“Overall, we had a good, clean audit,” McCabe began, handing out copies of the audit to all board members. McCabe informed everyone to look it over and give him a call with any questions.
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You guys have a responsibility to run this board. Our job is to help you,” he continued.

Revenues and expenses were basically in line, McCabe informed the board.

“We ended up the year with a $112,000 loss. Before we get terribly upset about that, that’s not too bad. One of the big things we have (in the audit) is a tremendous amount of depreciation on the wear and tear of the equipment,” McCabe said. “It’s an accounting entry. We had $522,000 worth of depreciation. Again, that’s an expense of the system, but we don’t actually write a check for it.”

In terms of the bond covenant, this is fine, because the depreciation is added back in, it was learned.

“One of the most important things we do is make the bond people happy. They tell us we have to make 110% of our debt service. We actually made 226%. They’re happy,” McCabe continued.

“The bottom line is we’re very sound, financially speaking.”

McCabe then stated a tremendous profit will be reflected for fiscal year 2018 with the Cripple Creek water and sewer line replacement project.

“The city applies for a grant, and when that project is completed and a grant administrator signs off on it that it’s done, that project is essentially donated to the water board. That becomes contributed capital to the water board, which is income,” he said.

“I like to monitor things through the year,” McCabe stated. Basically, statements will be sent to him several times a year to have the information keyed in to his system. This helps keep accuracy on the books throughout the year.