BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Work-Study Session to Consider the Fiscal Year 2024-25 Proposed Operating and Capital Rolling Biennial Budget.
End
RECOMMENDATION:
Recommendation
A. Receive, review, and discuss Santa Clara Valley Water District's Fiscal Year 2024-25 Proposed Rolling Biennial Budget;
B. Receive comments and input from the public regarding the Fiscal Year 2024-25 Proposed Rolling Biennial Budget;
C. Incorporate any changes deemed necessary into the Fiscal Year 2024-25 Proposed Rolling Biennial Budget; and
D. Continue this item, if needed, to the April 25, 2024, Special Board Meeting - Budget Work-Study Session.
Body
SUMMARY:
Santa Clara Valley Water District (Valley Water) develops the annual budget to allocate the public’s funds that are necessary to provide Santa Clara County with safe, clean water for a healthy life, environment, and economy. The development of Valley Water’s budget is accomplished in an open, transparent process providing opportunity for Board and public input.
Valley Water’s financial planning and budget development processes are governed by the District Act, Section 13 (Taxation) and Section 20 (Adoption of Budget). In accordance with District Act Section 20, “on or before June 15 of each year, the board shall meet, at the time and place designated by published notice, at which meeting any member of the general public may appear and be heard regarding any item in the proposed budget or for the inclusion of additional items.” Board Governance Policy EL-4 Financial Management guides financial planning, budgeting, and ongoing financial activities.
This agenda item presents Valley Water’s Chief Executive Officer’s Fiscal Year 2024-25 (FY 2024-25) Proposed Budget for Board consideration. The Proposed Budget was planned and developed to enable Valley Water to accomplish the Board’s Ends priorities in a cost-efficient and fiscally accountable manner, and to provide a balanced annual budget which is sustainable and complies with the District Act and the Board’s Financial Management Policy (EL-4).
The Proposed Budget was developed based on the Board’s FY 2023-24 Board Work Plan. Staff recommends a proposed FY 2024-25 Operating and Capital Budget of $1.092 billion, less $129 million in intra-district reimbursements. The total net proposed budget is $963 million. The gross budget is comprised of $465 million in capital outlays, $524 million in operations outlays, and $104 million in debt service. The proposed budget revenue is $695 million, which includes proposed groundwater production and other water charges for FY 2024-25. Debt proceeds are budgeted at $346 million and with the use of budgeted reserves, make up the difference between total outlays (including capital carryforward) and total revenues. Budgeted year-end reserves are $413 million, of which $152 million are legally restricted. Restricted Reserves are reserves with externally imposed legal restrictions or amounts constrained to specific purposes by their providers (such as grantors, bondholders, higher levels of government), through constitutional provisions or enabling legislation.
Additionally, Staff provides a FY 2025-26 Operating and Capital Plan of $1.283 billion, less $135 million in intra-district reimbursements, resulting in a total net proposed plan of $1.149 billion. The gross plan is comprised of $614 million in capital outlays, $545 million in operations outlays, and $124 million in debt service. The proposed plan revenue is $793 million, which includes proposed groundwater production and other water charges for FY 2025-26. Debt proceeds are at $342 million and with the use of reserves, make up the difference between total outlays (including capital carryforward) and total revenues. Planned year-end reserves are $382 million, of which $141 million are legally restricted. The FY 2025-26 Plan will serve as the forecast for the second year’s budget and be approved but not formally adopted by the Board. For the FY 2024-25 rolling biennial budget process, the Board will adopt a one-year Budget for FY 2024-25 and approve a one-year Plan for FY 2025-26. This means the first year’s appropriations are formally adopted by the Board, whereas the second year’s appropriations are not. The rolling biennial budget process is aligned with the guiding State, District Act and Valley Water Policies, and is conducive to long-term planning while remaining responsive to the dynamic and ever-changing needs of the organization and will need to be updated annually as the just completed fiscal year rolls off and the new second fiscal year is added.
On April 24 and 25, the Board will discuss the Budget, Water Charges, and Capital Improvement Program. Depending on the Board direction provided at the meeting, the FY 2024-25 Proposed Budget, as presented, may require additional modifications. The budget process is scheduled to conclude with the Board’s adoption of the FY 2024-25 Proposed Budget at its regularly scheduled meeting on May 14, 2024.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
Valley Water acknowledges that disadvantaged communities have historically been disproportionately impacted by the effects of drought and flooding and currently provides the Low-Income Water Rate Assistance Program to help low-income households pay their water bills. The development of Valley Water’s budget is accomplished in an open transparent process providing opportunity for public input into the decision-making process. To ensure meaningful awareness of Valley Water’s budget and engagement in the decision-making process, public hearings are noticed in county newspapers in various languages, including English, Spanish, Chinese, and Vietnamese. The FY 2024-25 Budget, Water Charges, and Capital Improvement Program processes include over nine (9) open session discussions, supported by the Balancing Act online budget simulation tool, providing the public significant opportunity for input.
FINANCIAL IMPACT:
There is no financial impact related to this agenda item. It is presented for information only.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably, foreseeable indirect physical changes in the environment.
ATTACHMENTS:
Attachment 1: PowerPoint
Attachment 2: FY24-25 Proposed Budget
Attachment 3: Project Details Pages
UNCLASSIFIED MANAGER:
Manager
Darin Taylor, 408-630-3068