ITEM:

PUBLIC HEARING

 

17.

CONSIDER ADOPTION OF MID-YEAR FISCAL YEAR 2016-2017 BUDGET ADJUSTMENT

 

Meeting Date:

February 22, 2017

Budgeted: 

N/A

 

From:

David J. Stoldt,

Program/

N/A

 

General Manager

Line Item No.:

 

Prepared By:

Suresh Prasad

Cost Estimate:

N/A

 

General Counsel Review:  N/A

Committee Recommendation:  N/A

CEQA Compliance:  No CEQA Required

 

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, 2016 through the end of December 31, 2016 and determined that adjustments to the FY 2016-2017 Budget is required.  The FY 2016-2017 Budget was adopted on June 20, 2016.  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:

 

Monterey Peninsula Water Management District

2016-2017 Budget

Mid-Year Budget Adjustment-Summary

Revenue

Adopted

Change

Amended

Property Tax

$1,600,000

$0

$1,600,000

Permit Fees - WDD

175,000

0

175,000

Permit Fees - PED

56,000

0

56,000

Connection Charges

212,500

0

212,500

User Fees

95,000

0

95,000

Water Supply Charge

3,400,000

0

3,400,000

Mitigation Revenue

2,518,500

0

2,518,500

Recording Fees

8,000

0

8,000

Interest

20,000

0

20,000

Other

20,000

0

20,000

Subtotal District Revenues

8,105,000

0

8,105,000

Reimbursements - CAW

2,260,600

(215,300)

2,045,300

Reimbursements - Watermaster

74,600

0

74,600

Reimbursements - Reclamation

20,000

0

20,000

Reimbursements - Other

36,000

0

36,000

Reimbursements - Legal Fees

10,000

0

10,000

Grants

330,400

0

330,400

Subtotal Reimbursements

$2,731,600

($215,300)

$2,516,300

 

Carry Forward From Prior Year

941,000

567,510

1,508,510

From Capital Equipment Reserve

0

0

0

From Fund Balance

783,050

129,685

912,735

Total Revenues

$12,560,650

$481,895

$13,042,545

Expenditures

Adopted

Change

Amended

Personnel

$3,431,800

$0

$3,431,800

Supplies & Services

1,108,600

39,600

1,148,200

Project Expenditures

6,750,100

436,295

7,186,395

Fixed Assets

115,500

6,000

121,500

General Fund Balance

783,050

0

783,050

Flood/Drought Reserve

66,600

0

66,600

Debt Service

230,000

0

230,000

Contingency

75,000

0

75,000

       Total

$12,560,650

$481,895

$13,042,545

 

As the revenue and expenditure table above indicates, revenue and expenditure increased by $481,895.  In order to balance the budget and fund for continuing work on the Ground Water Replenishment Project, additional funding in the amount of $697,195 will have to be borrowed from District’s general reserve fund to complete the project.  Significant portion of the borrowing in the amount of $567,510 is carried over costs from prior year, which was budgeted in FY 2015-2016 but did not get spent in that fiscal year.  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 2016-2017.

 

BACKGROUND:  The Board of Directors adopted the original FY 2016-2017 budget on June 20, 2016.  The paragraphs below summarize the original budget, proposed mid-year adjustments to the budget and projected reserves accounts.

 

Revenues

 

The 2016-2017 adopted budget anticipated revenue sources in the amount of $12,560,650.  It was projected that these revenues would be the same amount as budgeted expenditures resulting in a balanced budget.  As of December 31, 2016, actual revenue collections totaled $4,347,048 or about 35% 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 17-A and discussed below:

 

 

 

 

The cumulative effect of these revenue adjustments is an increase of $481,895 in projected revenues for FY 2016-2017.

 

Expenditures

 

The original budget envisioned expenditures of $12,560,650 in the FY ending June 30, 2017.  As of December 31, 2016, actual expenditures totaled $3,637,769, or approximately 29% 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 cumulative effect of the adjustments to the expenditure side of the budget is a net increase of $481,895 in projected expenditures for FY 2016-2017.  

 

Reserves

 

The District’s reserve balance is projected to be as follows:

 

 

The above adjustments will result in an estimated reserve balance of 2,059,956 at June 30, 2017 as shown on Exhibit 17-F.  This amount meets the minimum 5% of the operating budget established by the Board during the 2005-06 budget process.  The projected ending reserve balance is an increase of $535,021.  The original adopted budget had a projected reserve balance of $1,524,935.

 

EXHIBITS

17-A    Revenues

17-B    Personnel Costs

17-C    Supplies & Services Costs

17-D    Capital Assets

17-E    Project Expenditures

17-F    Reserves Analysis

 

 

 

 

 

 

 

 

 

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