Water panel mulls budget

The El Dorado Irrigation District board approved an interim budget for 2007, allowing the district to continue operating at 2006 spending levels, pending prioritization of capital improvement projects and decisions on how to pay for them.

Mark Price, assistant finance director, said a two-year operating budget, for 2007-08, will be presented to the board in January. It will reflect efforts to prioritize capital improvement projects and link them with a consultant's study of district hook-up fees, and water and wastewater rates.

Board members also were advised during the Dec. 11 presentation that to fund the projects, the district likely will have to seek additional financing by summer.

Price said the proposed 2007 budget reflects $100 million in new debt, although the actual amount of a bond issue won't be determined until the consultants' studies are completed. The district must maintain net revenues equal to or higher than 125 percent of its debt payments.

A proposed baseline budget for 2007 projects $44.7 million in expenditures compared with $40.8 million for 2006. It reflects an increase of approximately $2.7 million in employee salaries and benefits, and a $1.2 million increase for materials and services.

Price said, however, that $1.4 million of the increase in personnel costs represents a shift of some salaries and benefits from the capital improvement budget to the operating budget, as recommended by the district's auditors.

The increase in personnel costs includes a 1.8 percent cost-of-living adjustment, as well as merit raises.

The district, on the advice of auditors, also shifted $140,000 in software and maintenance license costs, as well as $100,000 for a habitat conservation plan from the capital improvement program budget, contributing to the projected increase in the 2007 materials and services budget.

Though overall expenditures on materials and services are projected to rise in the coming year, Price said the district expects to realize $100,000 in savings through bulk chemical purchases and a $170,000 reduction in electrical costs as a result of a solar farm at the El Dorado Hills Wastewater Treatment Plant.

Price said the proposed budget anticipates the addition of two positions -- a construction maintenance assistant in the wastewater division and an assistant right-of-way agent.

Other staffing increases may be considered based on capital improvement program priorities.

"We need first to do the CIP determination, then see what resources we need," said Steve Setoodeh, facilities management director. "The CIP prioritization will determine what workload is ahead for us."

Board members noted that a shift in property tax revenue initiated in 2004 to balance the state budget has ended, and the district expects to receive $10.6 million in property taxes for 2006. This is higher than the original budget projection of $8.5 million.

To compensate for the revenue lost through the tax shift, the board approved a temporary 4.3 percent surcharge on water rates, effective April 1, 2005. It was to expire in three years, or whatever period necessary to recover the lost revenue.

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• * * * The Bee's Cathy Locke can be reached at (916) 608-7451 or clocke@sacbee.com.