by Leslie Lytle, Messenger Staff Writer

“You have a clean audit. All of your financials are appropriately stated,” said Sabrina Mapes, principal for the MG Group, reporting on the Sewanee Utility District’s audit for 2024 at the July 15 meeting of the Sewanee Utility District Board of Commissioners. In other business the board discussed the need for new meter reading software and considered, but decided against, changes to the sick leave policy.

Mapes praised SUD for the utility’s financial health. “Your total net position which is the balance of your funds at the end of the year is 8.448 million,” Mapes said. “That’s really strong for a utility district of your size.” Mapes’ only critical finding cited “several journal entries without adequate support … They didn’t go where we thought they would go,” Mapes commented. “But all were tied to the conversion when you changed [billing] systems. The outside CPA you hired to help you with that didn’t include any of the backup, so we couldn’t validate that portion. It’s nothing we expect to go forward [as a problem]. Nothing was materially misstated,” Mapes said.

Taking up the meter reading issue, SUD manager Ben Beavers said, “Our meter reading equipment is no longer supported by Itron, the manufacturer of the radio and the endpoints on the meter. The software and equipment we use to read the meters is out-of- date.” Beavers stressed Itron had always provided good support. Switching systems would cost $300,000, Beavers said. He recommended replacing the software, which would also require a new computer to run the upgraded technology, estimated total cost $10,000-$20,000. The radio SUD uses to read the meters is also out-of-date. “If it’s not ungodly expensive, it might be worthwhile replacing the radio, as well,” Beavers said. He will research the cost of the software, computer, and radio upgrade and report to the board at the August meeting.

A change to Governmental Accounting Standards Board rules prompted the board to consider a change to the sick leave policy. The new rule requires utilities to set aside money to pay sick leave if, historically, the utility is required to pay out in wages 50 percent or more of sick leave accrued by employees. SUD employees earn one day a month and can accrue up to 720 days, Beavers said. “Three-fourths of our employees will have sick leave accrued when they leave,” Beavers said. Setting aside money to pay sick leave would lower SUD’s net position (i.e., the difference between assets and liabilities) and possibly result in a negative net position. If required to set aside money to pay sick leave, SUD could reduce the amount by reducing the number of sick leave days employees can accrue and carrying short term disability insurance to pay the wage of incapacitated employees instead. Short term disability insurance paying two-thirds of an employee’s wage costs $3,214 per year, Beavers said.

“The policy we have seems fair,” said Commissioner Donnie McBee. Commissioner Johnny Huges concurred, “To me, if it’s not broken, don’t fix it.”

At this point, SUD has not been required to set aside money to pay sick leave. “Year to date, we used only 11 percent of the total accumulated balance. For the past ten years, the balance [of accrued sick leave days] has gone up for most employees,” Beavers said. The board decided to leave the sick leave policy unchanged.

The board will have a special called meeting Thursday, July 31, at 5 p.m., to review and vote on bids for the sewer rehab project funded by American Rescue Plan Act grant money. To meet the grant requirements the project must be under construction by the end of August, Beavers said.