17. CONSIDER ADOPTION OF FISCAL YEAR 2003-2004 MPWMD BUDGET
Meeting Date: June 16, 2003 Budgeted: N/A
Program/Line Item No.: N/A
Staff Contact: Rick Dickhaut Cost Estimate: N/A
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed the latest draft 2003-2004 Budget on June 10, 2003 and voted 2 to 0 to recommend that the budget be presented to the full Board.
CEQA Compliance: N/A
General: The latest draft of the 2003-2004 budget is included as Exhibit 17-A and includes all programs and expenses currently being considered for the Fiscal Year beginning July 1, 2003. It is based on the District’s current strategic initiatives and other ongoing programs. Exhibit 17-B shows comparisons of the proposed budget to actual revenues and expenditures for Fiscal Years 1999-2000, 2000-2001 and 2001-2002 as well as comparisons to the 2002-2003 budgeted and estimated amounts. Exhibit 17-C is Districts staff’s latest effort to identify items that could be used to reduce the proposed budget.
Current Year: In recent years the budget has been balanced by utilizing large amounts of reserve funds for operational and project expenditures. The 2002-2003 Budget, as revised on February 27, 2003, anticipated the use of reserves in the amount of $1,234,300, however, due to less than anticipated project expenditures it is currently projected that the actual use of reserves will be approximately $200,000. This amount could be larger or smaller depending on the timing of work on several large projects currently underway.
Fiscal Year 2003-2004: Assumptions governing both revenues and expenditures are listed in the draft budget. The assumptions are not significantly different from those relating to the current year’s budget, with the exception that no project reimbursements from Cal-Am are currently included in the draft budget.
Revenues: For Fiscal Year 2003-2004, revenues are anticipated to total $3,755,000, or about 10 percent less than those included in the Fiscal Year 2002-2003 budget. This reduction is due mostly to decreased reimbursements from Cal-Am as mentioned in the paragraph above.
Expenditures: For Fiscal Year 2003-2004, proposed expenditures total $5,911,300 or about 7.2 percent more than the Fiscal Year 2002-2003 budget. Most of the increase is attributable to project expenditures that increased from the 2002-2003 budgeted amount of $1,972,200 to approximately $2,337,800, an increase of approximately 18.5%. This increase is due to the substantial work currently underway for a comprehensive EIR for water supply projects as well as other Board directed strategic initiatives.
Effect on fund balances: The proposed budget anticipates the use of $2,156,300 in reserves during Fiscal Year 2003-2004. It is important to note that these reserve funds were set aside by the Board in previous years specifically to be used for this purpose.
RECOMMENDATION: The Administrative Committee reviewed the latest draft of the 2003-2004 Budget on June 10, 2003, recommended several reductions and voted 2 to 0 to recommend that the budget be presented to the full Board.
IMPACT ON STAFF AND RESOURCES: District staff has expended substantial time, beginning in February of this year, to develop this budget. The budget will facilitate execution of the District’s current strategic plan. Activities proposed are achievable within the coming fiscal year given proposed staffing and resources.
BACKGROUND AND DISCUSSION INFORMATION: Due to pending capital project issues that were to be discussed at the March 27, 2003 special Board meeting, and their significant impact on the 2003-2004 Budget, the budget was not discussed at the March Administrative Committee and Board meetings as was originally anticipated. At the March Administrative Committee meeting it was decided that a special Administrative Committee meeting would be held for the sole purpose of discussing the first draft of the budget. District staff completed the first draft of the 2003-2004 Budget and it was presented to the Administrative Committee at the special meeting on April 30, 2003. The budget was again discussed at the May 12, 2003 Administrative Committee meeting and suggested changes received from the Committee at those at meetings were incorporated into a draft that was reviewed by the Board at its May 19, 2003 meeting. At that meeting, District staff also presented its first attempt to reduce the amount of the proposed budget, less contractual and Board commitments, by 10%. Following the presentation, the Board of Directors provided additional direction regarding items to be considered in a 10% reduction and District staff has subsequently further refined the list of potential reductions. The Administrative Committee again reviewed the draft budget at its June 10, 2003 meeting and recommended several reductions that have been incorporated into the latest draft.