SUD Receives Favorable Audit; Closes Waterline Project


by Leslie Lytle
Messenger Staff Writer
At the May 28 meeting of the Sewanee Utility District Board of Commissioners, the board reviewed the 2018 audit and received an update on the completion of the waterline replacement project. The board also voted to hire a summer intern.
The audit performed by the MG Group showed SUD had $102,000 positive change in its net position.
“That’s better than I anticipated,” said SUD manager Ben Beavers. SUD drew on its cash reserves for the recently completed waterline replacement project, rather than borrowing money. Failure to maintain a positive net position can result in the state comptroller requiring a utility to raise rates or otherwise adjust practices.
For the first time since 2013, SUD did not receive a citation for “inadequate segregation of duties,” an audit finding frequently received by small utilities who lack the staff to provide the required degree of financial oversight and lack the resources to hire additional full-time staff. SUD resolved the issue by hiring an accountant to perform a once a month review of financial transactions.
The only audit criticism was “failure to deposit receipts in three days.” SUD received the same finding in the 2017 audit and changed practices to correct the circumstance in May of 2018. The finding referenced instances before the May 2018 changes were made. “It won’t happen again,” Beavers said.
Updating the board on the recently completed replacement of aging, constricted cast iron waterlines on Florida Avenue, South and North Carolina Avenues, and Clara’s Point Road, Beavers said all the permits had been closed out and financial arrangements with the contractor were being finalized.
The project came in $71,000 under budget because of cost-saving changes to the original plan and SUD performing inspections and some ancillary work in house.
The intern SUD hires will complete a GPS inventory of fire hydrants, check for leaks, flush hydrants, measure flow, compile a list of worn parts and repairs needed, and weed eat and clear brush in the area of the hydrants.
“It will be useful to have a data base so we can prioritize repairs,” said SUD Board President Charlie Smith.
The intern will receive no benefits and earn hourly compensation slightly above minimum wage.
“It would be good to hire at least one intern a year to get people interested in the business,” Beavers said. “In 10 years we’ll be needing people to replace those who retire.”
Beavers recommended looking for interns among children of employees first and then the customer base. To comply with federal law, any young person employed by SUD would need to be at least 16 years old. SUD has already identified a person for the intern position for this year.
The part-time position will continue until the job is completed, probably six weeks. Funds for hiring an intern are available from the contract labor budget.

The board will hold a special called meeting June 18, 6 p.m., to review the manager’s compensation. The board will use salary and compensation survey data from the Tennessee Association of Utility Districts for guidance.