Fairbury’s light department has made progress since 2015, when it found itself $1,074,791 in the red. Since that time, the City of Fairbury has worked to decrease expenditures and increase profit, resulting in a $752,670 improvement.
At the Fairbury City Council Meeting on Tuesday, Brian Blobaum, of Blobaum and Busboom CPAs, presented the results of an audit he conducted of Fairbury Light and Water’s finances through April 30, 2016.
“In 2015, we had gross profit from the sale of power of $1,821,000, and this year we had gross profits of approximately $2,196,000,” said Blobaum. “Labor costs in that same area, I picked this item out of a group of items, show that the prior year, we were at $1,766,000, roughly, and now we’re at $1,635,000. So labor costs dropped and gross profits went up.”
Blobaum continued by explaining that the net income has been an item of concern, especially with the $1 million deficit. He stated that there has been substantial improvement, though there are still steps that Fairbury needs to take to shift from the red to the black.
“We moved from a little over a million dollar loss a year ago to $322,000 in this particular financial statement for this fiscal year,” Bloabaum said. “If we look at what is the cause of that, we see that the gross profit is $374,000 better, which is basically 50 percent of that gain came from better gross profits.”
Blobaum believes that another reason the light department has seen a decrease in the deficit is due to the reduced labor costs and maintenance costs. However, he advised the councilmen that deferred maintenance could result in greater costs down the road.
“We see a tightening of the purse strings throughout our expenses,” said Blobaum. “If we’re reducing maintenance expense, that is an annual thing that may come back to find you in another year. So, just keep looking at those margins.”
The status of the water and sewage department finances is, as Blobaum stated, “business as usual.” He noted that there have been some drops in the net income, though he believes the drop is a result of needed maintenance projects. He believes that the departments in Fairbury are on track to return to the previous financial statuses of recent years, noting slight improvements from Jan. 2016 to April 2016.
“So, the overall is to say, following my report from a year ago, this year is not so bad,” Blobaum said.
City Administrator Collin Bielser explained that the city will need to focus on some improvement projects in the coming years to ensure that the services they provide will continue without a hitch.
“Something that I’ve reported briefly and I think is necessary to work toward is to do a sewer-rate study for a couple reasons,” said Bielser. “Mainly because of some transition that will be happening in that department in the next three to five years, and planning for some attrition that will happen there and how we’re going to stop-gap that.
“Also,” Bielser continued, “I’ve reported before how we have very old raw sewage pumps. One pump failed a few months ago, and we replaced it. The plant can run on two, but it can’t run on one, so if another one failed, we would have been in big trouble. One of those pumps is new, the others are from the late ‘50s, early ‘60s.”
Also during the meeting, the council agreed to allow Mayor Homer Ward sign an intergovernmental agreement with the Nebraska Department of Environmental Quality to apply for a grant to study the Faribury’s water system.
“This is a project we submitted to the state to get a $15,000 grant to study our water distribution and storage options,” said Bielser. “One large primary focus of this is the water lines underneath the river going from Crystal Springs to where we distribute from there. As you all are probably aware, Little Blue [NRD] constantly wants additional capacity. We feel that those pipes that are probably from the 1920s, with minor patching, can’t stand additional capacity. So, what this study will do is create a preliminary engineering report, which is required if we ever wanted to go out for financing to undertake a big project like this. It will give us a better idea of what we need to do to.”