RA CEO Cate Fulkerson will report to the RA Board of Directors this Thursday on the financial situation of Tetra. The bottom line of the costs to date and forecast until the end of the year is that RA expects to spend more than one million dollars on Tetra by the end of the year. In broad terms, that includes:
- $700K on renovation of the interior and exterior of the Tetra building. That sum could have built a new building the size of the Tetra building.
- More than $107K on operating expenses, some $95K comprises employee-related expenses. In fact, we understand that RA has hired several full- and part-time employees to operate its programs there.
- And, of course, there are always the mortgage payments which will total nearly $184K this year.
Below is the full RA spreadsheet with several rows added at the bottom (light blue and yellow) that bring some of these totals to the surface.
To facilitate a comparison with RA’s “fact sheet” published March 2015 to help sell the referendum, here is the pro forma spreadsheet it offered then:
This total cost for the Tetra effort is more than double the total cost RA projected for Tetra in its March 2015 “fact sheet” on the Tetra purchase. Here are the costs as RA projected them then and now:
- Operating expenses would be $45,011 in 2016. RA’s latest report puts operating expenses at $107,303—more than double RA’s “fact sheet” projection.
- No program expenses because RA anticipated that the building would be leased back to Tetra developers through 2016. Now RA anticipates $107,303 in operating/programming expenses for this year.
- Overhead expenses, including “existence cost” expenses and loan costs, were expected to reach $228,623 in the “fact sheet.” They are now projected to grow slightly to $247,072 this year.
- The big change, of course, is in the costs of renovating the Tetra building, which was in horrible shape, and the grounds. Last year, RA put 2016 costs (in fact, the total cost) at $259,000. That cost has now risen to $699,531.
Yet somehow, despite losing the $100K lease on the Tetra building this year, RA is forecasting operating revenues of $171,753 this year. That forecast program revenue comes from an RA effort to accelerate the renovation of Tetra to enable the launch of some programs as of about mid-year. For what it’s worth, RA’s project income this month is down $20K from last month, and we expect similar cuts in projected income next month when RA reviews its forecasts to end of the year.
The proverbial bottom line is that RA told Restonians last year that the “net cash flow” for 2016 would be a -$387,527. Now RA is telling Reston the “net cash flow” for 2016 will be -$882,152—a 128% increase in losses. And we frankly expect that the net cash flow will show greater losses by the end of year.
This is pathetic management of an unjustifiable project. We hope that the “independent” audit team can provide some explanation of how Restonians were so badly misled by their leaders.