ITEM:		ACTION ITEM
15.	ADOPT PROPOSED FISCAL YEAR 2025-2026 MPWMD BUDGET AND RESOLUTION NO. 2025-04
Meeting Date:			June 16, 2025	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line-Item No.:
Prepared By:			Nishil Bali	Cost Estimate:	N/A
General Counsel Review: N/A
Committee/Board Recommendation: The Board discussed this item during their Budget Workshop on May 29, 2025.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines Section 15378.

SUMMARY: The proposed budget for Fiscal Year (FY) 2025-2026 is attached as Exhibit 15-B. The proposed budget sets aside funding for District needs and its strategic priorities and takes into account changes to the District’s revenue sources and related economic conditions. This budget assumes the continuation of User Fee revenue from ratepayers of California American Water but discontinues the collection of the Water Supply Charge following the Appellate court ruling in September 2024. Other revenue sources, such as Property Tax Revenue, Pure Water Monterey (PWM) water sales, Capacity Fees, Permit Fees, and various reimbursements, are assumed to continue.

Proposed expenditures and revenues, each total $46,584,868, which is higher than the FY 2024-2025 revised mid-year budget by 3.96%. A sectional breakdown of the proposed budget is provided below. A more detailed justification of the proposed budget is provided in the transmittal letter, which is part of the budget document.

Description	Budgeted
Personnel	$6,021,388
Services and Supplies	2,099,400
Project Expenditures	37,938,080
Reserves	526,000
Total	$46,584,868

The FY 2025-26 budget continues to set aside funding for the District’s key priorities including pursuing public ownership of the Monterey Water system; protecting/increasing the water supply through increased use of recycled PWM water; focusing on Seaside groundwater management, as well as adopting the Urban Water Management Plan and undertaking additional projects. The budget maintains existing services for managing rebates, adopting water efficiency standards, outreach, and continuing the Carmel River mitigation program.

RECOMMENDATION: Staff recommends that the Board adopt Resolution No. 2025-04, A Resolution of the Board of Directors of the Monterey Peninsula Water Management District Adopting the Budget for Fiscal Year 2025-2026.

BACKGROUND: The annual budget process involved compilation of requests from all Divisions, followed by a detailed review and adjustments by Managers and the General Manager, which resulted in a proposed budget totaling $46,584,868 for FY 2025-26. This included $12,750,068 or 27.37% in reimbursement funds from grants, California American Water, and other agencies. The budget also includes $20,963,250 in PWM water sales.

Staff reviewed and considered the eight-part strategy adopted by the Board in 2005 to develop balanced budgets. These measures continue to stay relevant and are reproduced below for reference.

1. Minimize impact on District constituents (reductions should seek to avoid significant adverse impacts on existing service levels). Phase out the use of operating reserves (diminish the use of operating reserves to balance the budget, and plan for re-establishing operating reserves to a prudent level of approximately 50% of the annual budget).
2. Structure permits and other processing fees to fully recover service costs (establish and institute fees that are sufficient to cover the costs of issuing permits and providing other services).
3. Explore ways to be more efficient and economical (review the way tasks are currently accomplished and solicit ideas from employees on how to be more efficient and economical in daily activities).
4. Minimize impacts on existing staffing level (reductions should seek to avoid significant adverse impact on existing regular staff in order to maintain satisfactory service levels for current programs and activities).
5. Invest in strategic projects (budget funds as needed to develop long-term water supplies).
6. Minimize environmental impacts (provide District services while minimizing the effects on, and improving, the environment).
7. Seek outside funding sources to leverage District revenues (pursue available Federal and/or State grants for priority locations on Carmel River where bank stabilization/restoration/channel clearing is needed and steelhead spawning habitat should be improved).
8. Adjust the User Fee as required to meet service program needs (if the above measures are not adequate to balance the budget, increase user fees to a level required to balance the budget, while striving to achieve objectives in the District’s Strategic Plan, including Mission and Vision Statements). 

Staff may recommend updates and revisions to the above measures in FY 2025-26 as part of the District's goal to develop a reserve policy. The proposed budget presented to the Board remains consistent with the above objectives, maintains the District’s programs and services, and provides funding for the adopted strategic goals.

EXHIBITS

15-A Draft Resolution No. 2025-04

15-B Draft Fiscal Year 2025-2026 Proposed Budget

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