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Board reviews revenue scenarios for FY25-26 after unexpected Edison payment; deficit remains under multiple forecasts
Summary
IVCSD staff presented four revenue scenarios for fiscal 2025-26 after receiving a larger-than-expected Edison payment. Depending on conservative or optimistic assumptions, the district faces a smaller or larger projected deficit and will use reserves and further analysis to finalize next year's budget.
Staff presented updated revenue projections for fiscal year 2025-26 after new information changed the district's year-end estimate. The board discussed conservative and optimistic scenarios and how the district's strategic reserves could be used to manage shortfalls.
Jonathan, general manager, said staff had expected $65,000 from Edison but learned the payment will be about $97,000, improving the current-year outlook. "We had predicted $65,000 were owed by Edison. It's actually 97,000," he said, adding that the new figure narrowed the gap in estimated actuals and improved the fund balance projection.
Staff presented four scenarios for next year's revenue assumptions: no growth (0%), cautious growth (2%), realistic/optimistic growth (4%), and a more aggressive scenario (6%) based on recent trends. The presentation broke growth down by individual utilities (electricity, gas, water, trash) rather than applying a single aggregated rate. The board discussed volatility, especially in natural gas receipts, and whether to plan conservatively or assume some growth.
Under every scenario staff showed, a deficit remains for 2025-26, though its size varies: the most conservative projection resulted in a larger shortfall; the higher-growth scenarios reduced the projected deficit. Staff reminded the board that existing reserves — some designated for strategic or capital purposes — have been used historically both to buffer revenue volatility and to fund one-time projects.
Directors asked staff to incorporate external factors where possible (for example, county-level waste ordinance changes) and to continue refining forecasts as new data arrives. Several directors supported using a cautious or moderately optimistic assumption rather than strictly zero growth, noting the district historically under-budgeted revenue and placed excess into reserves.
Finance committee work was tasked with producing a budget model that reflects board direction; staff will return with a recommended revenue assumption and corresponding draft budget guidance.
