Annual budget process underway

August 22, 2011

To most of us, 2012 may seem to be quite a long way away, but for Wabash Valley Controller Theresa Young and her team, it’s closing in very quickly.  “We’ve been in the early stages of gathering all of the data for the 2012 budget,” she explained. “The staff is submitting their department budgets, and we’ve been working with our power suppliers and vendors to get updates on power and fuel costs.”
 
By late August, the team will have developed the first draft of the year’s budget for the executive group’s review. “We’ll spend September performing the internal review and analysis, finalizing data, and going back and forth on our projections,” Theresa added. “Any kind of budget or forecast is really a pyramid of assumptions. You can only make projections based on what you know at the time, and things are always subject to change. We try to take the best information we have and share what we believe the outcomes will be.”
 
Wabash Valley’s board will get its first look at the 2012 budget at the October 5 board meeting. In addition to a presentation, Theresa’s team will prepare a budget book with between 80 and 100 pages of detailed information. On October 17 and 18, regional meetings at Wabash County REMC and Wabash Valley headquarters will give co-op directors and staff a chance to review the proposed budget and ask questions.
 
“We explain how we arrived at the data in the budget, and we encourage questions about the process,” Theresa noted. “We talk about how we factor in fuel prices and other assumptions. Board members and attendees get a lot of information and have a lot of opportunities to ask any questions they want. We’ve followed the same basic process since 2005, and we believe that it provides a great deal of transparency, so everyone has a better understanding of what’s involved.”
 
The board is expected to vote on the budget at its November 2 meeting. “That way, they have a full month to consider it, and we have an opportunity to accommodate any changes or unexpected issues before it comes up for approval.”
 
“I think that following the same process every year helps everyone involved,” Theresa added. “The assumptions change from year to year, but the process is consistent, and we get a little better at it every year. We’ve worked hard to develop a routine schedule with the companies we buy power from, so that we can obtain their most current assumptions and make sure our rate projections are as accurate as possible. We look for ways to refine that every year.”