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ITEM: |
PUBLIC
HEARING |
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18. |
CONSIDER ADOPTION OF
MID-YEAR FISCAL YEAR 2015-2016 BUDGET ADJUSTMENT |
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Meeting
Date: |
February 17, 2016 |
Budgeted: |
N/A |
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From: |
David J.
Stoldt, |
Program/ |
N/A |
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General
Manager |
Line Item No.: |
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Prepared
By: |
Suresh
Prasad |
Cost
Estimate: |
N/A |
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General Counsel Review: N/A |
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Committee Recommendation: N/A |
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CEQA Compliance: N/A |
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SUMMARY: Annually, the District considers its financial position after the end of the first half of the fiscal year (FY). District staff has reviewed income and spending patterns since July 1, 2015 through the end of December 31, 2015 and determined that adjustments to the FY 2015-2016 Budget is required. The FY 2015-2016 Budget was adopted on June 15, 2015. Included in the budget adjustment process was a review of staffing levels, supplies, outside services, current work assignments and other factors affecting the current budget. The table below summarizes the proposed changes to the budget:
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Monterey Peninsula Water Management District |
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2015-2016 Budget |
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Mid-Year Budget Adjustment-Summary |
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Revenue |
Adopted |
Change |
Amended |
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Property Tax |
$1,570,000 |
$0 |
$1,570,000 |
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Permit Fees - WDD |
175,000 |
0 |
175,000 |
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Permit Fees - PED |
56,000 |
0 |
56,000 |
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Connection Charges |
175,000 |
0 |
175,000 |
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User Fees |
75,000 |
0 |
75,000 |
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Water Supply Charge |
3,400,000 |
0 |
3,400,000 |
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Mitigation Revenue |
2,412,000 |
0 |
2,412,000 |
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Recording Fees |
8,000 |
0 |
8,000 |
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Interest |
15,000 |
0 |
15,000 |
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Other |
15,000 |
0 |
15,000 |
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Subtotal District Revenues |
7,901,000 |
0 |
7,901,000 |
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Reimbursements - CAW |
1,841,900 |
(594,100) |
1,247,800 |
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Reimbursements - Watermaster |
70,200 |
0 |
70,200 |
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Reimbursements - Other |
67,000 |
(11,000) |
56,000 |
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Reimbursements - Legal Fees |
15,000 |
0 |
15,000 |
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Grants |
275,000 |
0 |
275,000 |
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Subtotal Reimbursements |
$2,269,100 |
($605,100) |
$1,664,000 |
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Carry Forward From Prior
Year |
1,220,000 |
0 |
1,220,000 |
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From Capital Equipment
Reserve |
0 |
89,700 |
89,700 |
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From Fund Balance |
2,021,400 |
1,034,750 |
3,056,150 |
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Total Revenues |
$13,411,500 |
$519,350 |
$13,930,850 |
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Expenditures |
Adopted |
Change |
Amended |
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Personnel |
$3,405,000 |
$39,300 |
$3,444,300 |
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Supplies & Services |
1,074,100 |
0 |
1,074,100 |
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Project Expenditures |
7,900,300 |
484,800 |
8,385,100 |
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Fixed Assets |
144,500 |
29,700 |
174,200 |
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General Operating Reserve |
354,600 |
133,550 |
488,150 |
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Debt Service |
230,000 |
0 |
230,000 |
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Election Expense |
228,000 |
(168,000) |
60,000 |
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Contingency |
75,000 |
0 |
75,000 |
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Total |
$13,411,500 |
$519,350 |
$13,930,850 |
As the revenue and expenditure tables indicate, revenue and expenditure
increases by $519,350 resulting in a balanced budget. In order to balance the budget and fund for
continuing work on the Ground Water Replenishment Project, additional funding
in the amount of $1,034,750 will have to be borrowed from District’s general
reserve fund to complete the project. Detailed
information regarding the proposed changes, as well as their effect on reserves,
is detailed in the background section of this report.
RECOMMENDATION: Following a presentation by District staff and a public hearing, staff recommends adoption of the proposed mid-year budget adjustment for FY 2015-2016.
BACKGROUND: The Board of Directors adopted the original FY 2015-2016 budget on June 15, 2015. The paragraphs below summarize the original budget, proposed mid-year adjustments to the budget and projected reserves accounts.
Revenues
The 2015-2016 adopted budget anticipated revenue sources in the amount of $13,411,500. It was projected that these revenues would be the same amount as budgeted expenditures resulting in a balanced budget. As of December 31, 2015, actual revenue collections totaled $4,061,842 or about 30% of the budgeted amount. Revenues for the first half of each FY year are low because one half of the District’s three major revenue sources, water supply charge, property taxes and reimbursements, are collected during the second half of each FY. District staff has analyzed the revenue activity for the first six months of the FY, as well as activities scheduled for the second half of the FY, and recommends various adjustments to the revenue portion of the budget as shown in Exhibit 18-A and discussed below:
- Project Reimbursements received from Cal-Am customers were decreased by $594,100 primarily due to Los Padres long term plan. This project was deferred to FY 2016-2017.
- Other Reimbursements were decreased by $11,000 due to several adjustments in the WDS permit processing.
- Capital Equipment Reserve Fund was increased by $89,700 as these accumulated funds will be used to fund for purchase of trucks. These funds were carried forward to this fiscal year from prior fiscal year.
- Fund Balance was increased by $1,034,750 to fund for Ground Water Replenishment Project. The funds for this will come from District’s general reserves.
The cumulative effect of these revenue adjustments is an increase of $519,350 in projected revenues for FY 2015-2016.
Expenditures
The original budget envisioned expenditures of $13,411,500 in the FY ending June 30, 2016. As of December 31, 2015, actual expenditures totaled $4,068,924, or approximately 30% of the budgeted amount. This low percentage at the mid-way point of the FY is not unusual because project expenditures for the first half of each FY year are historically low. District staff has analyzed the expenditure activity for the first six months of the FY, as well as activities scheduled for the second half of the FY, and recommends various adjustments to the expenditure portion of the budget as discussed below:
- The personnel portion of the budget was increased by $39,300 as shown on Exhibit 18-B. The increases were mainly attributed to adding positions within Conservation and Planning & Engineering departments which were approved by the Board at a prior meeting.
- The supplies and services portion of the budget has net effect of zero as shown on Exhibit 18-C. There are some minor adjustments made between the categories, however, it does not impact the overall supplies and services budget.
- The capital assets portion of the budget has an increase of $29,700 as shown on Exhibit 18-D. These adjustments are carried from prior fiscal year and has a net effect of zero on the current year budget.
- As presented on Exhibit 18-E, project expenditures increased by a net amount of $484,800. Some of the larger adjustments are as follows:
- Expenditures for Groundwater Replenishment Project were increased by $1,800,000 based on refined estimates for the project timeline.
- Reduction of $500,000 for Los Padres long term plan expenditures due to deferral of the project costs to next fiscal year.
- Reduction of $310,000 for Cal-Am Desalination project as most of the costs has been deferred to next fiscal year.
- Reduction of $522,100 for ASR program as some of the costs has been deferred to next fiscal year.
- Increase of $171,000 in Local Water Project due to additional projects approved by the Board at an earlier date.
The cumulative effect of the adjustments to the expenditure side of the budget is a net increase of $484,800 in projected expenditures for FY 2015-2016.
Reserves
The District’s reserve balance is projected to be as follows:
The above adjustments will result in an estimated reserve balance of 2,190,185 at June 30, 2016 as shown on Exhibit 18-F. This amount meets the minimum 5% of the operating budget established by the Board during the 2005-06 budget process.
EXHIBITS
18-A Revenues
18-B Personnel Costs
18-C Supplies & Services Costs
18-D Capital Assets
18-E Project Expenditures
18-F Reserves Analysis
U:\staff\Boardpacket\2016\20160217\PubHrngs\18\Item-18.docx