Amador County – The Amador Water Agency Board of Directors received a two-year audit report Thursday that showed total net assets and operating revenues increased, and operating expenses decreased.

The biggest change appeared to be a decrease by $1.2 million in non-operating revenues over non-operating expenses, according to an audit report by the firm Leaf & Cole, whose associate Michael Zizzi fielded questions.

President Don Cooper pointed out what Zizzi called a typo in the report, which compared fiscal years ending in 2010 and 2009. Cooper asked about 2010 “current liabilities” listed as $2.4 million, compared to $4.6 million in 2009 as a “change” of $7,600. Zizzi said the actual change in liabilities was $2.2 million.

The report said the agency’s total net assets increased by $1.03 million, operating revenues increased by $62,600 and operating expenses decreased by $560,000. Zizzi said “we had a net operating loss of $2.7 million,” and the “net change was $745,000.”

Cooper asked the definition of a “source of supply,” which went from $400,000 to $717,000 in the audit. The AWA controller said the category included only salaries and benefits in the construction department, which this year under Manager Barry Birge took over a lot of the operating expenses. As a result, operations and maintenance costs should go down.

Zizzi said the state controller determined what the audit listed in that category, which for AWA was to show the cost of transmission and distribution of water, but not include utilities or acquisition.

Cooper asked about notes payable, and Zizzi said the agency borrowed another $1 million toward a USDA loan for Plymouth’s pipeline, but “made another principal payment.” Plymouth’s pipeline accounted for $2.4 million in agency capital asset additions.

Director Art Toy asked about the capital contributions of $4.5 million, and Zizzi said it was the USDA grant for the Plymouth pipeline, and unlike a “capital exchange,” the federal loan grantor did not gain anything form the grant. He said it fell into the income side of the audit, but did not show as cash.

Toy said it was a “beautiful balance sheet,” and asked what was its subject for credit risk computation. Zizzi said it was on cash investments. He said the agency’s decrease in cash should be a concern.

He said “the $66 million in net assets, or equity if you will,” included “$61 million tied up in your infrastructure,” which would also be subject to depreciation. But he said the agency is actually better off in its “unrestricted net assets,” which were at $5.4 million, up from $4.2 million in 2009.

After the board approved the report, Zizzi said it was an atypical interaction in that the board asked informed questions and seemed to really understand what is going on.

Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.