Tom Smegal: So the answer to that first question is that most of these acquisitions, if you look back to the acquisition, slide 17 are relatively small. We’ve been funding those with corporate cash that’s obtained through retained earnings and the ATM equity program, as well as the lines of credit that we have. The biggest acquisition that is on that list currently is probably the lake section at the very bottom. And we just announced that acquisition, so we actually haven’t paid for it yet. And so that will come out of those sources later on. As far as the equity layer at California Water Service Company, I see Tom across the table with me with a calculator. We don’t have that information published. We’ll have to calculate that. And try to get that out in another way. We don’t have that information right now.
Angie Storozynski: That is, if I were to say that it’s around 50%, would that be?
Tom Smegal: I think as of the third quarter that was trending upward. And as you know, one of the issues and the cost of capital case was whether the capital structure was appropriate, and it certainly was getting close to 50%. As of the third quarter, I remember calculating but I don’t have that number, unfortunately for year end.
Angie Storozynski: Okay. Thank you, guys. Thanks.
Operator: Our next question comes from the line of Jonathan Reeder from Wells Fargo. Please proceed.
Jonathan Reeder: Hey, good morning, gentlemen. I was hoping you could elaborate a little bit on the drivers of this substantial 35% increase in other operating expense, I think it was about $30 million higher than in 21. The items in there they’re not likely to or, is that a good base to assume 23 grows off of?
Tom Scanlon: This is Tom Scanlon. I’ll answer that. The increase in other operational expense. A good portion of that relates to requirements of deferral based on accounting, a guidance that we look at the future and estimate the collect collection of receivables. And anything that’s over 24 months, we have to defer the revenue and costs. Each quarter, we reforecast that out, reverse it and rebook it. And because of our anticipated collections, we’ve reversed out revenue and cost. And that’s the large adjustment in the other operations expense. Also, we record our conservation expense in that category. And since we’re at the end of our GRC, we have subvention balancing account, in which there’s a number of programs that were accelerated during the final year of our rate case.
And again, note that the conservation expenses are covered by a balancing account. We also had an increase in bad debt expense or the reserves that we take for uncollectible accounts. Mid-year in 2022 we were allowed to begin turning off service for non-payment. But we have a number of accounts that are under review, and we can’t — it’s going to take some time to employ — to turn off non-payments. And so those were the primary drivers of the increase in other operating expense.
Jonathan Reeder: Okay. So it sounds like a lot of that increase, do you have an associated kind of revenue impact as well, or revenue increase?
Tom Smegal: That’s right, Jonathan. Yes.
Jonathan Reeder: Okay. And then, I don’t know if this is for Marty, but why did the board only go with a 4% dividend increase in ’23? I know, it had that increase and it more like an 8% pace, the last three years and the payout ratio on — at least what should be a normalized EPS, our 2023 is going to be a little messy, but it’s still pretty low, maybe around like 50%. So why did the dividend kind of not grow as fast as it has been historically?
