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ITEM: |
DISCUSSION
ITEM |
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4. |
REVIEW PROPOSED MPWMD FISCAL
YEAR 2022-2023 BUDGET AND RESOLUTION 2022-14 |
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Meeting
Date: |
May
26, 2022
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Budgeted:
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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:
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Committee Recommendation: N/A
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CEQA Compliance: This action does not constitute a project as
defined by the California Environmental Quality Act Guidelines Section 15378. |
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SUMMARY: The proposed budget for Fiscal Year (FY) 2022-2023 is attached as Exhibit 4-B. While preparing the proposed budget, District staff was mindful of the continued economic conditions due to COVID-19 and as well as the current status of the District’s four main funding sources (User Fee Revenue, Property Tax Revenue, Water Supply Charge, and Pure Water Monterey (PWM) water sales). This budget assumes continuation of the adopted annual Water Supply Charge and the User Fee revenue from ratepayers of California American Water in FY 2022-2023. This budget also takes into account District’s existing Mechanics Bank (formerly Rabobank) Aquifer Storage Recovery (ASR) loan obligation. Proposed expenditures and revenues each total $32,695,400, which is higher for expenditures and revenues from the amount budgeted in FY 2021-2022. A more detailed justification of the proposed budget is provided in the transmittal letter which is part of the budget document. This proposed budget does include the use of reserves to balance the proposed budget. The FY 2022-2023 Budget also assumes payment of $230,000 towards debt service (interest and principal) for the Mechanics Bank Loan. The budget document has been presented in same format as in prior years.
RECOMMENDATION: Staff recommends that the Board discuss the proposed FY 2022-2023 budget and give general direction to staff to prepare the final budget document for adoption at the June 20th Board Meeting. No formal action is required at this meeting.
BACKGROUND: After compilation of the original requests from all
Divisions, a detailed review and several adjustments by Division Managers and
the General Manager, culminated this budget with proposed expenditures and
revenues for FY 2022-2023 totaling $32,695,400, of which $6,281,400 or 19%
includes reimbursement funds from grants, California American Water and other
agencies.
It also includes $12,201,000 for PWM water sales. Additionally, general reserves in the amount
of $1,060,600 (includes fund balance and carry forward programs) was used to
balance this budget.
In the past, District budgets had been balanced by use of previously accumulated reserves. At the District’s strategic planning session on September 29, 2004, staff recommended that a balanced budget be prepared for FY 2005-2006 using a combination of revenue and expenditure adjustments to eliminate the use of reserve funds. At the January 19, 2005 budget workshop, the Board adopted an eight-part strategy for balancing the FY 2005-2006 Budget. In being mindful of the 2005 Board adopted strategy, every effort was made to balance this proposed budget without the use of reserves. This proposed FY 2022-2023 Budget was balanced with the use of reserves to maintain all of District’s programs and services. The use of reserve was primarily due to expenditures related to PWM project and ASR project. This budget assumes the continued collection of the annual Water Supply Charge, User Fee revenues from ratepayers of the California American Water, and Property Tax revenues from the County.
4-A Draft Resolution No. 2022-XX
4-B Draft Fiscal Year 2022-2023 Proposed Budget
U:\staff\Boardpacket\2022\20220526\04\Item-4.docx