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City of Centerville <br /> April 16, 1998 <br /> Page Eight <br /> IOU ,, <br /> In addition to charges for services of $63,400 in 1997, the City received other revenue of $109,411. The <br /> cash balance is adequate to fund operations but the hookup fees and unit charges are needed to produce a <br /> profit. Charges for services should be a level that will cover operating expenses and any debt service. <br /> We recommend rates be reviewed and any necessary changes be implemented. <br /> Sewer Fund <br /> The results of operations and cash position of the Sewer Fund the past three years are as follows: <br /> 1997 1996 1995 <br /> Charges for services $ 122,245 $ 121,255 $ 108,149 <br /> Operating expenses 149.708 177,571 152,533 <br /> Excess charges for services $ a7 463 ) $ 56 316 ) L(44 ) <br /> Cash balance, December 31 $ 829,230 $ 705,162 $ 629 776 <br /> In addition to charges for services of $122,245 in 1997, the City received other revenue of $115,918. <br /> Like the water fund, the charges for services do not cover operating expenses. We recommend rates be <br /> reviewed since hook up charges are needed to cover new capital expansion not operations. <br /> This report is intended solely for the use of management and council. The comments and recommendations in the <br /> report are purely constructive in nature, and should be read in this context. <br /> Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the <br /> accounting records and related data. <br /> If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at <br /> your convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and <br /> cooperation extended to us by your staff. <br /> C ° y " <br /> April 16, 1998 ABDO, ABDO, EICK & MEYERS <br /> Minneapolis, Minnesota Certified Public Accountants <br />