FINANCE AND ADMINISTRATION COMMITTEE
ITEM:		ACTION ITEM
4.	RECEIVE AND FILE SECOND QUARTER FINANCIAL ACTIVITY REPORT FOR FISCAL YEAR 2023-2024
Meeting Date:			February 5, 2024	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 February 5, 2024 and recommended ____________.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines Section 15378.

SUMMARY: The second quarter of Fiscal Year (FY) 2023-2024 concluded on December 31, 2023. Tables comparing budgeted and actual year-to-date revenues and expenditures for the period are included as Exhibit 4-A. Exhibits 4-B and 4-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 second quarter of FY 2023-2024 to the amounts budgeted for that same time period. Total revenues collected were $11,083,506, or 45.8% of the year-to-date (YTD) budgeted amount of $24,219,125. Variances within the individual revenue categories are described below compared to the YTD budget.

• Potential revenues for the Water Supply Charge are $1,859,306 for the period. These have been placed in a reserve account pending the results of a retrial lawsuit by the District concerning these revenues.
• Property tax revenues were $1,503,617, or 115.7% of the budget for the period. The first installment of this revenue was received in December 2023. The second installment will be received in April 2024.
• User fee revenues were $3,085,241, or about 102.8% of the amount budgeted.
• Pure Water Monterey Water Sales revenue was $5,432,289 or 81.8% 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.
• Connection Charge revenues were $138,059, or 55.2% of the budget for the period. Actual collection was lower than the anticipated budgeted figure as the forecasted figures are based on the estimated number of connections for the permits filed. There were fewer connections for permits filed than budgeted for the current quarter.
• Permit Fees revenues were $114,557, or 115.7% of the budget for the period. Actual collection was higher than the anticipated budgeted figure as the forecasted figures are based on the estimated number of customers pulling permits. There were more permits received than budgeted for the current quarter.
• Interest revenues were $133,404, or 177.9% of the budget for the period. Actual interest was higher than budgeted as there has been a rise in interest rates.
• Reimbursements were $486,808 or 75.3% of the YTD budget. This is based on actual spending and collection of reimbursement project funds. This is due to projects being deferred and continued to subsequent quarters.
• Grant revenue was $182,652, or 1.9% of the budget. This is due to grant-funded projects being deferred and continued to subsequent quarters.
• The Other revenue category totaled $6,879 or about 91.7% of the budgeted amount. This category includes insurance refunds, miscellaneous reimbursements, and other miscellaneous services. Actual collections were higher than anticipated.
• The Reserves category totaled $0 or about 0.00% of the budgeted amount. This category includes potential use of reserves and the water supply carry-forward balance during the fiscal year for which adjustments will be 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 $9,349,532 were about 38.6% of the budgeted amount of $24,219,125 for the period. Variances within the individual expenditure categories are described below:

• Personnel costs of $2,370,050 were about 105.7% of the budget. This was slightly higher than the anticipated budget due to payment of the CalPERS employer portion of the unfunded liability paid upfront for the fiscal year.
• Expenditures for supplies and services were $720,221 or about 78.7% of the budgeted amount. This was lower than the anticipated budget due to legal and consulting services being lower than anticipated for the current quarter.
• Fixed assets purchases of $36,827 represented around 32.0% of the budgeted amount. This was due to some of the fixed asset purchases being deferred to the next quarter.
• Funds spent for project expenditures were $6,222,434, or approximately 34.0% of the amount budgeted for the period. This is lower than budgeted due to some of the project spending being deferred. This line also includes water purchased from Monterey One Water.
• There are no Contingencies/Other expenditures in the first half of the fiscal year. This was due to the contingency budget not being spent during this quarter.
• There are no Reserve expenditures in the first half of the fiscal year. Reserve adjustments are made at the conclusion of the fiscal year.

EXHIBITS

4-A Revenue and Expenditure Table

4-B Revenue Graph

4-C Expenditure Graph

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