ITEM:		ADMINISTRATIVE COMMITTEE
3.	RECEIVE AND FILE REPORT ON FOURTH QUARTER FISCAL YEAR 2004-05 FINANCIAL ACTIVITY
Meeting Date:			October 6, 2005	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Rick Dickhaut	Cost Estimate:	N/A
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on October 6, 2005 and recommended ____________________.
CEQA Compliance: N/A

SUMMARY: June 30, 2005 marked the conclusion of fiscal year 2004-05. Bar graphs comparing budgeted and actual year-to-date revenues and expenditures for the period are included as Exhibits 3-A and 3-B. Exhibit 3-C presents the same information in a table format. Please note that the final numbers are subject to change as additional entries and/or adjustments will be made during the annual audit. The following comments summarize District staff's observations:

REVENUES

The revenues graph compares revenues received during Fiscal Year 2004-05 to the amounts budgeted for that same time period. While there were some significant variances between the budgeted and collected amounts for individual revenue categories, the total revenues collected were over 95% of the budgeted amount of $4,109,000. Significant variances within the individual revenue categories are described below:

• Administrative permit fee revenues totaled $256,593, or about 244% of the amount budgeted. The excess revenue is attributed to a higher level of activity than anticipated as well as implementation of new and increased fees during the fiscal year.
• Connection charge revenues amounted to $576,356 which is approximately 154% of the budgeted amount. The higher than expected collections are due to increased activities, mostly due to entitlement transfers within the Del Monte Forest.
• User fee revenues were $1,842,612, or about 12% less than the amount anticipated. This decrease is due largely to higher than average rainfall which resulted in reduced water production and sales throughout the District.
• Property tax revenues of $892,909 were approximately 18%, or $197,000, under budget. The budget for tax revenues had been increased during the mid-year budget adjustment based on the first installment being approximately one-half of the total taxes to be received. At that time, staff believed that one-half of the additional taxes shifted to the State of California for the fiscal year had been taken out the first installment. However, the total tax shift was actually taken out of the second installment received in April resulting in the budget shortfall.
• The revenue budget included $50,000 as a placeholder for grant funds that might be received during the fiscal year. No grant funds were actually received.
• The “Other” revenue category was nearly $40,000 over budget due to various unanticipated miscellaneous revenues.

EXPENDITURES

Expenditure activity as depicted on the expenditure graph is similar to patterns seen in past years. Total expenditures were about 16% less than the budgeted amount of $5,039,000. Signifiant variances within the individual expenditure categories are described below:

• Expenditures for supplies and services were about 23% percent over the budgeted amount, mostly due to much higher than anticipated legal expenditures.
• Capital assets purchases equaled approximately 72% of the budgeted amount. Several expenditures, including the amount budgeted to upgrade the conference room, were not expended during the fiscal year.
• Funds spent for project expenditures were only 49% of the amount budgeted for the period. This percent is comparable to recent fiscal years. Project expenditures are typically under budget due to things such as delayed projects, etc.
• The Contingencies/Reserves category is only approximately 6% of the budgeted amount. The category includes items such as $159,600 for payback on the Harris Court office building which is not an actual cash flow item, $68,400 for contributions to the capital asset reserve and $93,800 for contingencies. Some of these items are not recorded until the year end audit process.

RESERVES

Although total expenditures exceeded total revenues by about $330,000, this shortfall is much less than the $900,000 difference reflected in the 2004-05 budget. As stated above, the final numbers are subject to change as additional entries and/or adjustments will be made during the annual audit. However, it appears that the reserve carryover to the 2005-06 budget should be significantly more than anticipated when the 2005-06 budget was prepared and adopted. The actual final numbers will be presented in the audited financial statements later in the year.

EXHIBITS

3-A Revenue Graph

3-B Expenditure Graph

3-C Revenue and Expenditure Table

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