Finance Report - 2011

Financial year in review

by Pam Geiger, Secretary-Treasurer and Travis Kupper, Chief Financial Officer

Margin and Capital Credits
In 2010, Mor-Gran-Sou’s margin (funds remaining after all operating costs have been paid) was $1,303,058. This was just over $1 million less than 2009’s margin of 2,322,592. The biggest reasons behind 2010’s lower margin were the ice storms of January and April.

While we did not complete a capital credit general retirement in 2010, we did refund capital credits to members over the age of 80 and to estates of deceased members. The amounts retired to these two groups totaled $126,043. A general retirement was not completed because of the additional expenses incurred during storm restoration.

2010 Ice Storms
Due to the ice storms we experienced in early 2010 and the associated restoration costs, we needed a very large amount of short-term credit. At one point, we had $31,500,000 advanced on an unsecured note. A large portion of this was repaid with FEMA funds and we have a balance remaining of $4,300,000 on the line of credit. We anticipate receiving about $1,500,000 more dollars from FEMA and this would leave us with a balance to pay of $2,800,000. An optimistic view of our current repayment schedule should allow Mor-Gran-Sou to repay this note by the end of 2014. That should allow us to remove the Storm Adder charges on your bill ahead of schedule. We stress that this schedule is dependent upon receiving the requested funds from FEMA.

Financials and Audit
Mor-Gran-Sou had its annual audit performed by Brady, Martz, and Associates in March 2011. In addition to the standard procedures performed, we were also subject to a more extensive review because of the FEMA dollars we received.

We are pleased to announce that we met or exceeded all audit requirements and received an “unqualified opinion.” An unqualified opinion is the highest mark available. The completed report was accepted by the board of directors at the April meeting. We would like to thank each and every employee for their part in the audit process. A summary of the audited financials are included in the annual report and will be recapped at the annual meeting as well.

If there are any questions concerning the financials, feel free to call Travis or e-mail him at tkupper@iea.coop.