02/13/1985 Meeting (2) - Laserfiche WebLink

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~ e e e February 6, 1985 TO: FROM: Mayor and City Councilors Gary Long, Director Administrative Services SUBJECT: EWEB Electrical Utility Payments to the General Fund The Council instructed the staff last Spring to study and resolve the dis- crepancies in payments to the City general fund from the EWEB managed elec- trical utility. These payment discrepancies were identified by the City's external auditors in FY78, FY83, and FY84. The City Manager clearly conveyed our audit concerns to EWEB officials as early as 1981. We also believe there were joint staff discussions between EWEB and the City preceding 1981. You have received a legal opinion advising you that an extensive internal study has been done by our legal and financial staff. In that process we have worked with EWEB staff and have resolved several minor issues raised in the 1983 management letter from our auditors, Peat, Marwick and Mitchell. We have also reviewed a variety of old reports and correspondence relating to EWEBls payments to the City general fund. We have not been able to understand EWEB1s interpretation of Ugross operating revenuesu as it applies to electrical utility revenues received from Trojan operations and other miscelleneous revenues of the electrical utility. These underpayments currently approximate $1.5 million per year. Our staff recommendation to the City Council is that you formally require, as provided in Section 44 of the Charter, a written explanation by EWEB of the Board's rationale for not paying the 6% rate on all of the electrical utility's gross operating revenue - including Trojan and other miscellaneous revenues. We recommend the Mayor forward correspondence to the EWEB Board Chair detailing the Council IS request for this written report. We recommend the Council ask EWES for its response within thirty days. Upon receipt of the Board's formal report, staff will review it and report back to you with recommended action to resolve the outstandin~ audit issues. GL:lv Attachment - 1983 Peat, Marwick, Mitchell Management Letter