Watching the financials
Oct 07, 2012 | 535 views | 0 0 comments | 4 4 recommendations | email to a friend | print
Twice in the past couple of years, readers have questioned our interest in the monthly financial reports filed by Cleveland Utilities.

Their concern is that such news articles are appropriate fodder for accountants — one even called them “bean counters” — and not for average newspaper readers. They also point to a general lack of interest for such operational detail.

Let us first consider the sources.

One is an otherwise cordial fellow who places little merit on statistical data which in itself is a mystery because his idea of living is the personal enjoyment of a televised football game, a sport in which numbers tell most of the weekend story.

The second is a self-acknowledged cantankerous soul — labeling him a curmudgeon is not a far stretch — who feeds off the negative in news and ignores most of the positive while lending little credence to the value of budgets, spending trends and the importance in keeping the two within a reasonable balance.

For anyone who knows a person, or people, who fit the above descriptions, it is likely these are the readers who took our CU financial stories to task.

Certainly to question the interest level of a news story dedicated exclusively to the financial updates of a public utility company is the right of one or more newspaper readers. It is our assumption these readers have the same disdain for periodic budget stories and the entire budget development process used by our three local governments — the Cleveland City Council, Bradley County Commission and Charleston City Commission.

Yet it is by these complicated steps, and their time-consuming analyses, that we arrive at present and future tax rates, capital outlay expenditures, infrastructure upgrades and sometimes volatile indebtedness debates.

This then returns us to our discussion of Cleveland Utilities and the monthly financial reports that are so adeptly prepared by Ken Webb, senior vice president and chief financial officer. It is Webb himself in past months who has reminded Cleveland Board of Public Utilities members that responsible utility providers must remain accountable in all current and future decisions while keeping a finger on the pulse of sales volume.

When it comes to the CU board, he is preaching to the choir.

As our CU coverage has reported over the past few months, in and outside the financial reports, the public utility is approximately $60 million in debt. Because Cleveland Utilities provides electricity, water and wastewater services to about 30,000 customers while being tasked by unprecedented municipal growth, the amount is not altogether alarming.

But — and this is a big but — CU over the next decade will spend another $30 million to implement an extensive sewer rehabilitation project called SCOPE 10 (Strategic Commitment to Protect the Environment). This isn’t just a fashionable set of repairs and infrastructural improvements. This is the future.

CU must do all within its means to guard against a violation of its NPDES (National Pollutant Discharge Elimination System) permit. If longstanding sewer overflows are not corrected, the Tennessee Department of Environment & Conservation and the Environmental Protection Agency could step in, cite the City of Cleveland with criminal violations and impose a sewer moratorium.

We’re not talking just manhole overflows.

We’re not talking just some isolated flash flooding.

We’re not talking the occasional residential backup of sewer service.

We’re talking public health hazard.

Cleveland Utilities is the first to acknowledge it. Cleveland Utilities is the first to recognize the potential short- and long-term penalties. Cleveland Utilities is the first to act through SCOPE 10.

Cleveland Utilities is also the first to understand the expense.

The utility continues to pay down on its $60 million debt, but more debt is coming. CU knows it and the utility wants the public to know it.

All this points to the importance of revenue. Through its monthly sales of electricity and water, CU earns revenue which in turn is used to pay its bills ... just like any Cleveland household.

This is why our newspaper pays close attention to the monthly financial reports. It is why Webb goes to great lengths to make the information available.

It is more than the public’s right to know. It is the public’s need to know.