Urban Water and Urban Wastewater flows for the year were about 4% below budgeted estimates. If you review the flow graph attached, you can see flows for both Urban centers are consistently below the 5 year average. Interest income is $370,000 under budget due to the economic downturn. Total operating expenses are approximately 6% below budget targets which lessened the impact of revenue shortfalls; however the Authority did end the year with a deficit on a budget vs. actual basis. Please note: the

Year end adjustments are made every year during the audit in order to conform to the accounting principles required for the CAFR. These statements were prepared prior to recording those year end adjustments.

Urban Water expenses were well within budget and the fact that the $125,000 budget
carryover funds for engineering consulting work were never expended is the main
variance to note. Although the Urban Wastewater department saved over $300,000 on
the holding pond maintenance, several equipment failures noted in previous monthly
reports caused other line items to go over budget, most notably utility costs in the Other
Service & Charges category.

The staff deserves commendation in that the actual expenses reported here for the past
year were less than the budgeted expenses in every single rate center and within every
single department. Urban Water was the single rate center where actual expenses
slightly exceeded actual revenues (1.8%), and it was the result of reduced revenues. The
centers we collectively refer to as the “Rural” centers (Crozet, Scottsville, Glenmore) all
had revenues over expenditures, as revenues in these centers are not based on actual flow
an are therefore more stable to forecast.