How Profitable is the City of Sugar Hill Gas Department?

While examining City staff's request that the Mayor and Council sign a supplemental contract with the Municipal Gas Authority of Georgia for a program called Natural Gas Connections, I had to wonder: Exactly how profitable is the City of Sugar Hill Gas Department? I reached out to the City and in that conversation, I asked several times. I never got a straight answer. I was told that it was short-sighted to look at where we are now and that I needed to look at the future. However, where you've been and where you are can help indicate where you're going, so it seems foolish to not look at that.

Also, the City contends that it is trying to run a "business-minded utility." Businesses don't usually make decisions without discussing dollar amounts. At least not if they want to stay in business. Making decisions without even looking at the bottom line is the careless practice of governments that can force taxpayers to pay more money to bail them out of bad decisions.

I've been covering the City of Sugar Hill for four years now. Every year, I ask for a line-item budget, which also includes information about all of the City's actual revenues and expenditures for that year. I also end up spending about $20 to get a complete document of all the City's actual revenues and expenditures for each year. , I went back and looked at all those reports to get some idea of where the Gas Department stands.

In the years 2019-2022, the Gas Department made enough money that each year the City could make an average transfer of around $2 million to the General Fund to support other departments. That transfer is shown as an expense for the Gas Fund and a revenue for the General Fund.

When the City presented its 2023 budget to the City Council, they indicated that the gas system had revenues of $7,641,448 as of 11/23/2022, and expenses of $6,976,789. One of those expenses was actually a transfer of $1,671,388 to the administration department of the General Fund. Excluding the transfer to the General Fund, the profit was $𝟮,𝟯𝟯𝟲,𝟬𝟰𝟳.

In 2021, the Gas Department shows revenues of $7,607,991.61 and expenses of $7,712,686.66, one of which is a transfer of $2,158,572 to the general fund. Although the document shows a final Gas Fund balance of -$104,695.05, excluding the transfer, the profit was $𝟮,𝟬𝟱𝟯,𝟴𝟳𝟲.𝟵𝟱.

In 2020, the Gas Fund had revenues of $6,827,171.38 in revenues and $6,639,496.04 in expenses, one of which was a transfer of $1,750,168 to the general fund. Although the document shows a final Gas Fund balance of $187,675.34, excluding the transfer, the profit was $𝟭,𝟵𝟯𝟳,𝟴𝟰𝟯.𝟯𝟰.

In 2019, the Gas Fund had revenues of $7,450,977.76 and expenses of $7,395,100.72, one of which is a transfer of $2,120,848 to the General Fund. Although the document shows a final Gas Fund balance of $55,877.04, excluding the transfer, the profit was $𝟮,𝟭𝟳𝟲,𝟳𝟮𝟱.𝟬𝟰.

In reviewing this, I have to wonder if there is a legitimate concern about the future viability of the Gas Department, or if the City has just become overly dependent on that approximately $2 million transfer every year and is looking to increase it because they refuse to control their spending. Carelessly throwing money around won't fix that first problem, and would be the direct cause of the second problem.