Back in October I wrote a piece arguing that the city was “killing its golden goose” by raising ESP gas rates. I noted that the $8 million transferred from ESP to the general fund is predicated on revenue assumptions of at least $53.3 million (because the city isn’t supposed to take more than 15% of ESP’s revenue), but that they’ve never actually hit that number.

…the city’s projections on ESP revenue the last few years have been, shall we say, optimistic. Back in FY 2009, the first year of the $8 million transfer, the budget showed an estimated $54,951,700 in ESP revenue. When actual numbers came in, however, that revenue was only $48,619,905. In FY 2010, the budget anticipated $53,210,100 in ESP revenue. When the actual numbers came in, it was only $46,209,499. That means that, as a percentage of ESP revenues, the $8 million transfer was actually 16.45% and 17.31% for those years. The budgeted revenue for FY 2011 went up to $54,549,200 — are you seeing a trend here? — and while we won’t know the actual numbers until next year, I’m willing to bet they will again fall short.

The audited numbers for FY2011 are now in, and I wish I’d gotten some takers on that bet.

According to the Comprehensive Annual Financial Report included in Monday’s Committee of the Whole agenda, ESP reported only $40.3 million in revenue for FY 2011. That’s a 12.8% decrease from the previous year’s actual revenue and a whopping 22.1% shortfall from the FY 2011 budgeted revenue. For the visually inclined, here’s a chart of the last few years’ budgeted versus actual revenue.

dyerware.com

That decline could charitably be called a “train wreck.” But don’t worry! Next year will be better, they assure us. According to the CAFR:

Fiscal year 2012 revenues of $54.6 million are budgeted higher than the previous year. ESP budgets with anticipation of a normal winter; however, actual revenues fluctuate with the cost of gas and weather patterns.

Of course, FY 2012′s winter is currently underway, and I’m not sure anyone would describe it as “normal.” January was the nation’s fourth warmest on record. With temperatures frequently in the 70s, we’ve been opening the windows at our house most days. That doesn’t bode well for ESP’s revenue flow.

ESP’s transfer to the General Fund is budgeted to remain at $8 million. The transfer is within the City Council adopted financial planning policy that permits a transfer of up to 15 percent of budget revenues.

You got that? As long as we keep the budgeted revenue above $53.3 million, we can keep skimming off $8 million for the general fund and still be in compliance with city policy. Meanwhile the actual revenue is in apparent free fall.