ITEM:

CONSENT CALENDAR

 

6.

CONSIDER ADOPTION OF RESOLUTION TO AUTHORIZE TRANSFER BETWEEN FUNDS

 

Meeting Date:

April 19, 2004

Budgeted:N/A

 

Staff Contact:

Rick Dickhaut

Program/Line Item No.:N/A

 

 

Cost Estimate:N/A

 

General Counsel Approval: Yes

Committee Recommendation:The Administrative Committee reviewed this item on April 13, 2004 and recommended approval.

CEQA Compliance:N/A

 

SUMMARY:In the event expenditures continue as projected, the Capital Projects general reserve would be in a deficit position of approximately $500,000 by the end of fiscal year 2003-2004 if no action was taken.In contrast, the Conservation Fund has accumulated about $500,000 in general reserves over the past five years and is projected to have a balance of approximately $550,000 by the end of the fiscal year.Ordinance No. 67 adopted in 1993 reallocated 1.110% of the Districtís total user fee of 7.125% from the Conservation Fund to conservation, rationing, irrigation, erosion control, mitigation, water planning and/or water augmentation.The revenue from the 1.110% of the user fee has been continuously applied to the Conservation Fund since 1993 even though this revenue stream is available, pursuant to Ordinance No. 67, to be used for Capital Fund expenditures.Ordinance No. 67 provides authority to the Board to transfer these funds from the Conservation Fund to the Capital Projects Fund.

 

RECOMMENDATION:As permitted by Ordinance No. 67, District staff recommends adoption of Resolution No. 2004-__ (Exhibit 6-A) that would authorize a transfer of $500,000 from the Conservation Fund general reserve to the Capital Projects Fund general fund reserve.The Administrative Committee reviewed this item at its April 13, 2004 meeting and voted 3 to 0 to recommend approval.††

 

BACKGROUND:After completion of the 2002-2003 annual audit and the 2003-2004 mid-year budget amendment, it now appears that the Capital Projects general reserve would be in a deficit position of approximately $500,000 by June 30, 2004 if no action was taken.The funds in the general reserve had been accumulated over a number of years to be used toward the cost of a water supply project when one was developed.As a result of the environmental and other work the District has completed related to proposed water supply projects over the past several years, the funds that were set aside for this purpose have been depleted.The Capital Projects Fund currently does not receive a portion of the current 7.125% user fee, however, Ordinance No. 67 adopted in 1993 reallocated 1.110% of the fee from use specifically by the Conservation Fund to use for any District programs related to conservation, rationing, irrigation, erosion control, mitigation, water planning and/or water augmentation. However, the 1.110% has been continuously applied to the Conservation Fund since 1993, and it has accumulated approximately $500,000 of additional general reserves over the past five years.It is projected that the Conservation Fund will have approximately $550,000 in general reserves available as of June 30, 2004.

 

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