BRIEF HISTORY

Morristown Utility Systems was formed by a private act of the State Legislature in 1901 under the legal name “The Board of Electric Lights and Water Works Commissioners of The City of Morristown. Morristown Utility Systems provides water and power services within the municipal boundaries of the City of Morristown to approximately 13,000 customers. 

MAJOR INITIATIVES 

LOW COST SERVICE
A major goal of Morristown Utility Commission is to continue to provide low cost service to our customers. A large contributing factor to low power rates is low power line losses. Over the ten year period ending June 30, 1999, Morristown Power System operated with an average loss rate of 3.38%. Maintenance of this low loss rate has been accomplished through transformer loss evaluations, efficient line design, and continuous monitoring of substation load to maintain even load distribution.

A large contributing factor to low water rates is low loss rates in both production and distribution. Over the ten year period ending June 30, 1999, Morristown Water System operated with an average loss rate of 8.35%. Maintenance of this low loss rate has been accomplished through continuing loss evaluations, efficient line design, and continuous monitoring of the production process to ensure the process is as efficient as possible.

All of these efforts, along with a highly motivated and dedicated work force, have allowed the Commission to remain a low cost utility provider for the East Tennessee Valley. 

FINANCIAL INFORMATION 

THE SYSTEM AS AN ENTERPRISE FUND
The Commission operates as an enterprise fund of The City of Morristown. This being the case, the Commission funds its expenditures through its rates and charges and receives no income from City taxes. The Commission recommends rates annually to provide for anticipated cash outlays for operating expenses and capital improvement requirements.

ACCOUNTING SYSTEM AND BUDGETARY CONTROL
The Commission's financial accounting system is based on generally accepted accounting principles. Internal accounting controls are an integral part of the Commission's accounting process and are designed to provide reasonable, but not absolute, assurance that assets are safeguarded from unauthorized use or disposition and that the records used for preparing financial statements and maintaining asset accountability are reliable.

PLANT
Plant is stated at cost, which includes cost of contract work, labor, materials and allocated indirect charges. Major renewals and improvements are capitalized while minor replacements and repairs are expended as incurred. The cost of  plant retired, together with removal costs, less salvage, is charged to accumulated depreciation when property is removed from service. 

CASH MANAGEMENT
System monies must be deposited in banks insured by the FDIC. Investments permitted include obligations of the U.S. Treasury and U.S. agencies, certificates of deposit and repurchase agreements. The cash management performance for the year ended June 30, 1999 produced combined earnings of $458,706

DEBT ADMINISTRATION
During February 1997, the Commission issued $1.380 million of City of Morristown Revenue Bonds, Series 1997 to finance capital improvements to electric distribution systems. During fiscal 1999, the System expended $250,542 of these funds for transformer installations.

RISK MANAGEMENT
The Commission's assets are protected through the third party provider Distributors Insurance Company. Through this provider, coverage is provided for workers' compensation, comprehensive, general and automobile liability, auto physical damage, crime and fiduciary, errors and omissions, property, boiler and machinery and pollution.

INDEPENDENT AUDIT
The System has an annual audit performed by independent certified public accountants. The firm of Coulter & Justus, P.C., was selected by the Board.  

OTHER INFORMATION 

AWARDS
The Government Finance Officer's Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Morristown Utilities for their comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 1998. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of a state and local government financial report.

In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. Morristown Utilities has received the Certificate of Achievement last year. Our current report combines both Power and Water Systems into one report entitled Morristown Utility Systems. We believe our report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA.