FINANCE AND ADMINISTRATION COMMITTEE
ITEM:		ACTION ITEM
3.	RECEIVE AND FILE FIRST QUARTER FINANCIAL ACTIVITY REPORT FOR FISCAL YEAR 2025-2026
Meeting Date:			November 10, 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 Recommendation: The Finance and Administration Committee reviewed this item on November 10, 2025 and recommended ____________.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines Section 15378.

SUMMARY: The first quarter of Fiscal Year (FY) 2025-2026 concluded on September 30, 2025. Table comparing budgeted and actual year-to-date revenues and expenditures for the period July 1, 2025, through September 2025 is included as Exhibit 3-A. Exhibits 3-B and 3-C present the same information in bar graph format. The following comments summarize District staff's observations:

REVENUES

The revenue table compares amounts received through the first quarter of FY 2025-2026 to the amounts budgeted for that same time period. Total revenues collected were $5,982,793, or 51.4% of the year-to-date (YTD) budgeted amount of $11,646,216. Variances within the individual revenue categories are described below:

• Property tax revenues were $0, or 0% of the budget for the period. The first installment of this revenue is expected to be received in December 2025.
• User fee revenues were $1,360,301, or about 69.8% of the amount budgeted for YTD. This is lower than the budgeted amount, as collections for September are received after the close of the fiscal quarter. After September collections are booked, user fees are expected to be $2,020,187, or 103.6% of the YTD budget.
• Pure Water Monterey (PWM) Water Sales revenue was $3,952,373, or 75.4% of the budget for the period. This is water sales revenue for water purchased from Monterey One Water and sold to California American Water, and is a pass-through to the District. The FY 2025-26 PWM budget includes additional revenue from the PWM Expansion project, planned to be operational in November 2025.
• Capacity Charge revenues were $442,709, or 393.5% of the budget for the period. Actual collection was higher than the anticipated budget, as the forecasted figures are based on the estimated number of customers pulling permits. The higher revenue is related to a few large construction projects, such as a new airport terminal at Monterey, the conversion of an office building to an apartment complex on Garden Road, and other commercial projects.
• Permit Fee revenues were $70,514, or 142.5% of the budget for the period.
• Interest revenues were $94,792 or 63.2% of the budget for the period. This excludes the first-quarter interest revenue from the Local Agency Investment Pool, which is received in the second quarter.
• Reimbursements were $48,439, or 18.6% of the budget. These are for reimbursable project funds tied to the Aquifer Storage and Recovery, Watermaster, and District rebates. These billings are finalized at the end of every quarter after actual spending is finalized, and the reimbursements are received the following quarter.
• Grant revenue from the PWM Expansion project and Integrated Regional Water Management (IRWM) projects was $0, or 0% of the budget, as this revenue is received at the end of the quarter and is based on quarterly submission of expenditures to the State Water Resources Control Board and the Department of Drinking Water. The District expects to be reimbursed for approximately $3.8 million in grant expenditures for the first quarter of FY 2025-26, once expenditures are finalized.
• The Other revenue category totaled $13,705, or about 68.5% of the YTD budgeted amount. This category includes reimbursement revenues from legal and other miscellaneous services and recording fees.
• No Reserves were booked in the first quarter. This category includes potential use of reserves for the entire year, with adjustments typically made at the end of the fiscal year.

EXPENDITURES

Expenditure activity, as depicted on the expenditure table, is similar to patterns seen in past fiscal years. Total expenditures of $5,426,341 were about 46.6% of the budgeted amount of $11,646,216 for the period. Variances within the individual expenditure categories are described below:

• Personnel costs of $1,756,449 were about 116.7% of the budget. This was higher than the anticipated budget due to CalPERS' employers’ portion of the unfunded liability, paid upfront for the fiscal year.
• Expenditures on supplies and services were $475,682 or about 90.6% of the budgeted amount. This was lower than the anticipated budget due to lower YTD expenditures for legal and consulting services for the first quarter.
• Fixed asset-related purchases of $2,427 represented around 10.5% of the YTD budgeted amount. Orders are expected to be placed for new District vehicles as per the budget in the second and third quarters of the fiscal year.
• Funds spent on project expenditures were $3,191,783, or approximately 34.0% of the amount budgeted for the period. This is lower than budgeted, as water purchases from PWM expansion are not expected to begin until November 2025, and first-quarter grant payments (expected to be around $3.8 million) are being finalized.
• Contingencies/Other expenditures were 0% of the budgeted amount, as no contingency budget was spent during this quarter.
• Reserve expenditures were 0% of the budgeted amount. Adjustments to reserves are made at the end of the fiscal year.

EXHIBITS

3-A Revenue and Expenditure Table

3-B Revenue Graph

3-C Expenditure Graph

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