ITEM:

PUBLIC HEARING

 

13.

CONSIDER ADOPTION OF MID-YEAR FISCAL YEAR 2017-2018 BUDGET ADJUSTMENT

 

Meeting Date:

February 22, 2018

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:This action does not constitute a project as defined by the California Environmental quality Act Guidelines section 15378.

 

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 from July 1, 2017 through the end of December 31, 2017 and determined that adjustments to the FY 2017-2018 Budget is required.The FY 2017-2018 Budget was adopted on June 19, 2017.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

2017-2018

Mid-Year Budget Adjustment-Summary

Revenue

Adopted

Change

Amended

Property Tax

$1,750,000

$0

$1,750,000

Permit Fees - WDD

175,000

0

175,000

Permit Fees - PED

56,000

0

56,000

Capacity Fee

250,000

50,000

300,000

User Fees

3,425,000

670,000

4,095,000

Water Supply Charge

3,400,000

0

3,400,000

Recording Fees

9,600

20,000

29,600

Interest

20,000

10,000

30,000

Other

20,000

0

20,000

Subtotal District Revenues

9,105,600

750,000

9,855,600

Reimbursements - CAW

1,691,400

(55,500)

1,635,900

Reimbursements - PWM Project

0

4,112,500

4,112,500

Reimbursements - Watermaster

74,600

0

74,600

Reimbursements - Reclamation

20,000

0

20,000

Reimbursements - Other

29,300

0

29,300

Reimbursements - Legal Fees

16,000

0

16,000

Grants

1,250,000

(800,000)

450,000

Subtotal Reimbursements

$3,081,300

$3,257,000

$6,338,300

 

 

 

 

Carry Forward From Prior Year

853,900

0

853,900

Total Revenues

$13,040,800

$4,007,000

$17,047,800

Expenditures

Adopted

Change

Amended

Personnel

$3,593,600

$6,000

$3,599,600

Supplies & Services

1,364,100

(39,500)

1,324,600

Project Expenditures

6,420,100

(722,500)

5,697,600

Fixed Assets

893,500

0

893,500

Election Expense

0

7,000

7,000

General Fund Balance

276,500

4,756,000

5,032,500

Capital Equip. Reserve

188,000

0

188,000

Debt Service

230,000

0

230,000

Contingency

75,000

0

75,000

†††††† Total

$13,040,800

$4,007,000

$17,047,800

 

As the table above indicates, revenues increased by $4,007,000. The reason for a significant increase in revenues was due to reimbursement of $4.2 million from Monterey One Water for the Pure Water Monterey Project. This was money spent in previous fiscal years now getting reimbursed through the State Revolving Fund loan.Detailed information regarding all other 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 2017-2018.

 

BACKGROUND:The Board of Directors adopted the original FY 2017-2018 budget on June 19, 2017.The paragraphs below summarize the original budget, proposed mid-year adjustments to the budget and projected reserves accounts.

 

Revenues

 

The 2017-2018 adopted budget anticipated revenue sources in the amount of $13,040,800. It was projected that these revenues would be the same amount as budgeted expenditures resulting in a balanced budget.As of December 31, 2017, actual revenue collections totaled $5,876,721 or about 45% of the budgeted amount.Revenues for the first half of each FY year are low because one half of the Districtís 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 13-A and discussed below:

 

 

The cumulative effect of these revenue adjustments is an increase of $4,007,000 million in projected revenues for FY 2017-2018.

 

Expenditures

 

The original budget envisioned expenditures of $13,040,800 in the fiscal year ending June 30, 2018. As of December 31, 2017, actual expenditures totaled $3,748,114, or approximately 29% of the budgeted amount.This low percentage at the mid-way point of the fiscal year is not unusual because project expenditures for the first half of each fiscal year are historically low.District staff has analyzed the expenditure activity for the first six months of the fiscal year, as well as activities scheduled for the second half of the fiscal year, 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 decrease of $756,000. Additional $4,756,000 is set aside for General Reserve Fund balance. The total change is $4,007,000 in projected expenditures for FY 2017-2018.

Reserves

 

The Districtís reserve balance is projected to be as follows:

 

 

 

The above adjustments will result in an estimated reserve balance of 8,564,107 at June 30, 2018 as shown on Exhibit 13-E.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 $4,366,600.The original adopted budget had a projected reserve balance of $2,847,256.

 

EXHIBITS

13-A††† Revenues

13-B††† Personnel Costs

13-C††† Supplies & Services Costs

13-D††† Project Expenditures

13-E††† Reserves Analysis

 

 

 

 

 

 

 

 

 

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