SectionsCity Utilities considers changes following audit
Brad Boutaugh
Issue date: 1/15/08 Section: News
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"Will there be changes? Absolutely," CU Communications Supervisor Joel Alexander said. "But to what degree, how rapidly and to what level they will affect individual customers, more specifically MSU students, are unknown at this point."
City Utilities is seeking possible changes to be made in operation after receiving the state auditor's report Dec. 18, which indicated some unnecessary spending and needed improvements.
Missouri State University has been a major customer of City Utilities, receiving power, water and natural gas from the community-owned utility cooperative.
"I don't think it will have any effect on rates," said Robert Eckels, director of facilities management at Missouri State. "We're just concerned with quality of service."
Rates have been good and responses have been quick during outages, according to Eckels.
City Utilities is looking into possibly reforming its procedures in further response to some of the problems in spending addressed in the state audit report.
"We view the findings and recommendations from the state audit as an opportunity to improve our operations," said CU General Manager John Twitty, in a letter response to the state audit.
The report indicated that City Utilities spent $19,000 on a 2006 Family Day Picnic and $52,000 on service and safety awards. Both of these accounts, in addition to others, were described in the report as imprudent and unnecessary.
"CU customers may be paying more than they should due to subsidization of non-utility city activities, subsidization of CU department from revenue of other departments, questionable spending and granting public funds in possible violation of the Missouri State Constitution," according to the audit report from State Auditor Susan Montee.
The audit concerning City Utilities was the third portion of the city's audit brought forward by a residents' petition that had questions surrounding the pension funds of the police and fire departments as well as funds missing from the Municipal Court.
Twitty has said there is no fraud involved and reported that the problems in spending are more managerial rather then financial.
The reform will be discussed at the board meeting to possibly bring about change based on 72 counts found with in the report.
City Utilities has already responded to seven of the state audit's counts, Alexander said.
Further revisions and possible improvements in CU operation are unknown until the board meeting.
City Utilities offers electricity, gas, water, telecommunications and transit to some 229,000 people.
It also has the seventh lowest electricity rates among 25 cities in the annual Lincoln Electric System Pricing Survey.
City Utilities' lower costs for its consumers are due largely to its own generation of power, Alexander said.
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