Material Revenue Discrepancies in 2012 Financial Update and Proposed 2013 Operating Budget
First, and before addressing other revenue inconsistencies in EID's proposed 2013 Operating Budget, there are material discrepancies in the 2012 actuals portrayed in the Board Packet for Agenda Item 4 (2012 Financial Update) and Agenda Item 5 (2013 Operating Budget):
Per 2012 Financial Update* Per 2013 Operating Budget*
Property tax revenues $9,764 Sept YTD actual vs. $9,000 Total 2012 projection
Recreation revenues $1,189 Sept YTD actual vs. $1,050 Total 2012 projection
Recycled water revenues $ 882 Sept YTD actual vs. $1,407 Total 2012 projection
Next, the 2012 revenue projections in your proposed 2013 Operating Budget (Agenda Item 5) fail to reasonably conform to Board-approved rate increases and other established information:
n For water revenues, you are budgeting a 11.3% revenue increase (only enough to match the 11% January 2013 rate hike) yet not incorporating some $1 million of additional Board-deferred rate hikes for domestic irrigation and recreation turf. You further are not incorporating some $650,000 of three month carryover in 2013 from the April 2012 rate hikes. The 2013 water revenue budget appears to be at least $1.6 million too low.
n For wastewater revenues, you are budgeting a 15.2% revenue increase yet the 2013 rate hike is a far lower 5% plus 1.25% carryover from the April 2012 rate hikes. Even if the Board disallows Director Day’s lowest of two year winter consumption proposal, at most this would add another 5% of probable revenues. In any event, the Board should decide this winter consumption issue and instruct you as to how to incorporate this issue into your budget rather than you assuming Director Day’s proposal will be denied. The 2013 wastewater revenue budget appears to be as much as $1.6 million too high.
n For Property tax revenues, you are budgeting a $464,000 DECREASE from September 2012 year to date actuals. With media-reported property values up in 2012, why shouldn’t the 2013 budget INCREASE (and not decrease) as compared to EID’s 2012 actual property tax revenues? The 2013 property tax revenue budget is most certainly too low.
n For recycled water revenues, you are budgeting a several hundred thousand dollar decrease even though there is a 11% rate hike for 2013 plus some modest carryover from the April 2012 rate hike. The 2013 recycled water revenues budget most certainly is too low.
n For Recreation you are budgeting a 12% ($139,000) reduction from September 2012 year to date actuals. Again, this seems illogical and, if true, would require Board attention as to authorized spending, especially since EID’s recreation operations lose money. The 2013 recreation revenue budget should be higher or requires further explanation.
The above revenue discrepancies merit correction and/or complete logical explanation before the Board and EID’s 38,000 regular ratepayers can reasonably assess spending and other aspects of your proposed 2013 operating budget.
On behalf of the financial interests of EID’s 38,000 regular ratepayers, thank you for resolving these material revenue budgeting inconsistencies.