BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Receive Overview of Valley Water's Current Budget Processes and Consider the Benefits and Drawbacks Associated with Biennial Budgeting.
End
RECOMMENDATION:
Recommendation
A. Review Valley Water's current annual budget process in relation to a biennial budget process in order to identify the benefits and drawbacks associated with each; and
B. Direct staff to implement a rolling biennial budget process to be updated annually after implementation of, and demonstrated stability of, the Infor Enterprise Resource Planning system.
Body
SUMMARY:
Valley Water is on an annual Capital Budget, Operating Budget, and Rate setting cycle. Based on staff's assessment, Valley Water could successfully transition to a biennial budget process, at the appropriate time, with investment of time and resources while also revising policies and procedures to accommodate the necessary budget process changes.
Background
Valley Water prepares the Operating Budget, Capital Budget and Rates on an annual basis. The Board has asked staff to examine the merits of adopting a biennial budget cycle conducive to long-term planning. Traditional biennial budgeting is defined as the practice of preparing and adopting budgets for two-year periods. As set forth below, staff is recommending a variation of the traditional biennial budgeting process. Staff evaluated the following budget process options for the purposes of this exercise:
o Traditional biennial budget with mid-cycle update - In a traditional biennial budget, staff submits, and the Board approves a 24-month appropriation. The budget is prepared in odd years and oversight is conducted in even years. A mid-cycle update process is employed to modify the second year of the budget.
o Rolling biennial budget updated annually - Under a rolling biennial budget process, the Board would adopt a one-year budget and approve an additional forecast that serves as the tentative spending plan for the non-bud...
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