$2.5M loss reported by water authority
by Nikki Wiley
February 25, 2014 04:00 AM | 2884 views | 1 1 comments | 13 13 recommendations | email to a friend | print
MARIETTA — The wholesaler that provides Cobb and several of its cities water, and influences rates, was about $2.5 million behind in projected net income for 2013, but officials are putting the blame on a rainy year.

The Cobb County-Marietta Water Authority, which supplies water to Cobb, Smyrna, Marietta, Austell, Powder Springs and other local governments, didn’t meet its sales projections in 2013, missing the mark by about $5.3 million.

That helped to fuel a loss in income that came in about $2.5 million under what was projected at $22.4 million.

Glenn Page, general manager of the water authority, said those numbers are the result of an unusually wet year.

Rainfall in 2013 was up by 78 percent, or 29 inches over 2012, according to the National Oceanic and Atmospheric Administration.

“Predicting our revenue is the same as predicting the weather and predicting the weather a year away,” Page said.

But Page said the water authority isn’t adjusting its projections for this year, which call for the sale of 80.5 million gallons of water per day. That’s half a million more than what was projected in 2013.

“If we were to have two or three years like that in a row, it would affect us significantly, but because we planned somewhat conservatively, a single year with a down revenue doesn’t affect us in a big way,” Page said.

He thinks the supplier can take the hit.

“We looked back historically,” Page said. “The last 20 or 30 years, drought periods tend to go in a two-year cycle, but wet years tend to go one year at a time.”

Charlie Crowder, a member of the authority’s board, also said it’s “nothing to be worried about” and heaped praise on the authority’s management for controlling expenses.

“Believe it or not, folks don’t have to irrigate as much. It really changes the situation as far as water usage,” said Crowder, who owns Crowder Realty in Marietta.

The authority approved raising its rates in September, representing a $.60 per month and $7.20 per year jump on the average water bill residents and businesses pay in Cobb.

That cost wasn’t passed directly on to residential customers because the authority is a wholesaler and does not bill individuals directly. But the cities that buy water from the authority had the option of passing on the increase to residents.

The authority’s rate increase was part of a $278 million capital improvements plan lasting through 2018 that will fund six pipe projects and three plant improvements, among other upgrades. The improvements plan is $10 million more than the $263 million approved last year.

Smyrna Mayor Max Bacon, who chairs the authority’s board, said at the time he thought the plan was admirable for dropping the rate increase by 2 percentage points, from 6 percent to 4 percent.

He noted on Monday while the authority’s revenues are down, its expenses are also down following a drop in demand. Expenses in 2013 were $6.75 million less than what was projected.

Bacon also said water customers have grown accustomed to conserving water following the drought that plagued Georgia from 2009 through 2012.

“We went from drought restrictions to we’ve got so much rain here the last six or eight months, it’s been amazing,” Bacon said.

Comments-icon Post a Comment
Kennesaw Resident
February 25, 2014
As a financial analyst with 18-years experience, I didn't have that much trouble predicting revenue. If done correctly, it shouldn't be as difficult as predicting the weather as year in advance. Excuses, excuses.
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