Audit report shows PWC met key financial performance goals

Fayetteville’s hometown utility received a financial update at a Public Works Commission meeting Wednesday, where accountants reported PWC passed its audit review and demonstrated strong key performance indicators for fiscal year 2022-23, which ended on Sept. 30. 

PWC’s audit received a 100% accuracy measurement, meaning no errors or omissions were detected in the financial statements, an external auditor told the commission at Wednesday’s meeting. 

“It's a good report,” newly-appointed commission member Richard King said. “I’m glad to be here and see that type of revenue coming in.”

Councilman Deno Hondros, the city’s liaison for PWC, said he was satisfied with the utility’s financial performance summary. 

“It's always good to go to the doctor and get a good checkup,” Hondros said. “It's a good financial report and audit, so keep up the good work.”   

Rhonda Graham, a controller at PWC who provided the report, thanked PWC’s accounting and financial planning staff for their work in overseeing the utility’s finances. 

“They are doing phenomenal work,” Graham said. “They have shown their dedication and hard work to make each year a success for us.”

Report highlights included:

• Net financial position, or difference between assets and liabilities, was $1.1 billion, an increase of $32.3 million
• Operating revenues: $353 million, an increase of $5.9 million
• Debt coverage ratio, a financial metric used to assess a business’s ability to repay loans and cover debt service obligations: 3.24, above the company’s policy minimum of 1.75 
• Average depreciation level across systems: 46.5% for electric; 42.7% for water; and 37.9% for wastewater. The metric shows the rate at which an asset loses value over time. A 50% depreciated system would indicate an aging system and “typically we would want to invest at least at depreciation level,” Graham said.  

Electric fund 

• Current assets: $228 million, a $5.2 million decrease
• Total revenue: $221.3 million, down from $227.5 million 
• Net financial position: $488.5 million, a 2.2% decrease from the previous year. This decrease, Graham said, was mainly because of lower heating and cooling degree days and lower average monthly usage for all customer classes. 

Water/wastewater 

• Current assets: $200.7 million, a $5.2 million decrease
• Total revenue: $131.8 million, up from $119.7 million 
• Net financial position: $657.9 million, a 7% increase from the previous year. Graham said this was mainly because of increased revenue from recent rate hikes. 

Graham said the increased revenue in the wastewater and water funds was mainly a result of rate increases in water and wastewater that became effective in July 2022 and in May. The May increase saw water rates climb from $20 per month for a residence to $21.25 and sewer rates for a residence increase from $20 to $22.25. Some Fayetteville residents expressed displeasure at the rate increase during a public hearing in February. 

At the time, the commission cited inflationary pressures and treatment required to address PFAS contamination of groundwater near the Cape Fear River for the rate increases.

Contact Evey Weisblat at eweisblat@cityviewnc.com or 216-527-3608. 

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