Dan Drane, from Drane and Company PLLC, attended the Lewisport City Council
meeting last Thursday to discuss the city's 2009 audit. Drane said the audit
revealed the city possessed assets of just over $9 million dollars, verses a
debt of just over $200,000.

"You have very little debt here," Drane said. "It is probably as low as I
have ever seen for a city this size."

Drane then turned the discussion to the city's gas, water and sewer systems.
For the year, the total revenue versus expenses of the systems showed a loss
of $82,999, but Drane pointed out that it was actually an accounting loss,
not a cash loss.

The audit report examines the financial activities of the three systems in
two different ways. The first method examines the finanical activities on a
cash and expense basis. This method examines how much revenue the systems
generate versus the expenses incurred operating them.

The second method also includes revenue and expenses, but also includes
non-cash categories such as depreciation of the equipment used in each
system, and other non-revenue/expense factors. It is on this basis the
systems showed a loss. When examining the gas, water and sewer on a
cash/revenue basis, all three made money in 2009.

"On a cash basis, the cash increased by $64,746," Drane said.

In reference to the accounting loss shown by the water and sewer system,
City Administrator said the gas system earns enough revenue each year to
overcome depreciation, allowing it to show a positive balance on both the
cash/revenue method, and the accounting method. While the water and sewer
earn positive revenue on the cash basis, it is not enough to offset the
depreciation in the system, making it look like the systems lost money.

"That's what is driving that up," Wigginton said.

Mayor Gregory reassurred the council that the city's finances are in
extremely solid condition. He then explained the difference between the gas
system and the water and sewer.

Lewisport uses the gas system as the main revenue producer to operate the
city. Proceeds from the gas fund help pay for the day-to-day operations of
the city.

The water and sewer system revenues do not help day-to-day operations. The
revenue generated by these two funds go specifically to pay for the
activities of the water and sewer system.