Notice is hereby given that a proposed budget has been submitted to the SRWD Board of Directors for the ensuing year 2025; a copy of such proposed budget is available below in this press release; any interested elector may file objections to the proposed budget prior to the final adoption of the budget; such proposed budget will be considered at the next regularly scheduled meeting of the Board of Directors to be held at their offices located at 0050 Oro Grande Dr. on Tuesday, November 12, 2024 at 4:00 p.m.
Dear Board:
It is my pleasure to submit the proposed Snake River Water District budget for 2025.
This budget message is prepared in accordance with state statutes and highlights important aspects of the proposed budget for 2025. I am including this letter and attachments for formal adoption of the 2025 Snake River Water District Budget in the Board packet for the regular meeting on November 12, 2024 at 4:00 p.m.
OVERALL ASSESSMENT
The Snake River Water District continues its history of successful financial management, and the proposed 2025 budget reflects a net operating income of $544,875 (after contingency).
Relative to the approved 2024 budget, the proposed 2025 budget shows a 12% increase in operating revenue and an 11% increase in operating expenses (before contingency). Relative to projected 2024 year-end levels, the proposed 2025 budget includes a 12% increase in operating revenue and a 9% increase in operating expense (before contingency).
The 2025 Change in Net Position is budgeted for $289,752. The primary factors for this result are $544,875 in Operating Income, $1,911,427 in Non-Operating Revenue, and $2,166,550 in Non-Operating Expenses. The Non-Operating Revenue is mostly Investment Income. The Non-Operating Expenses are for bond payments of principal and interest. The system improvements will consume cash, but the resulting new assets will be added to the balance sheet; thus, removing the expenditures from the P&L. The District continues the annual increase in the Water User Fees of 12% for next year. This increase is a critical component of the bond issuance completed in 2024 to pay for the Master Plan’s new infrastructure and replacing components of the aging distribution system.
Comparing this year’s budget to next year’s budget, most operating costs will be similar, although an inflation rate of 5% has been applied to account for the expected increase in normal expenses.
Regarding capital expenses for system improvements, the District is wrapping up the successful replacement of water assets in Loveland Pass Village this year. In 2025, the largest expenditures are budgeted for the new Base 2 Storage Tank. It is anticipated that specifications and construction plans for the tank will be completed in the spring of 2025. The road access construction and new transmission line are budgeted for 2025, and the new tank will be constructed in 2026. All work on the Storage Tank will be dependent on final approval for the special use permit from the US Forest Service. Other significant system improvements include $1,074,000 for upgrades to Base 2 Water Treatment Plant to improve safety. Pipeline Replacements have a budget of $1,628,488. Another $818,510 is budgeted for smaller projects such as improvements to the Base 1 Pump Station and hydrant replacements.
Tap fees and Interest Income for 2024 are projected to be $2,196,461, which is 148% above budget. The budget for Tap Fees in 2025 is $146,000 based on anticipated developments planned. The budget for Interest Income is $1,636,872 based on the current yield at ColoTrust and the estimated cash monthly balances.
OPERATING REVENUE AND EXPENSE
In 2024, actual Operating Income is projected to be $567,040 as compared to a budget of $487,773. This better-than-expected result is primarily the result of not needing the $144,799 Operating Contingency.
In 2025, Operating Income is budgeted at $544,875. This income is only a 4% difference from 2024 projections. Inflation continues to be persistent, and certain categories of expense are expected to outpace inflation; namely, insurance and legal fees. PFAS expenditures are budgeted at $105,000, but the District has received state grant funding to help defray costs related to studies and pilot testing for new treatments such as advanced filtration. Implementation of the new treatments is not expected until 2026.
Operating Revenue for 2025 is budgeted to be $2,139,491 which is 12% above the 2024 budget, simply based on the rate increase to fund the Master Plan. Operating Expenses (not including contingency) for 2025 are budgeted to be $1,430,222 which is 11% above the 2024 budget and 9% above the 2024 projected actual. The largest percentage increase in operating expenses for 2025 versus 2024 budget is a 211% increase in Water Rights Legal Fees based on the state of Colorado’s attempt to take away water rights in the Historic User Pool of the Green Mountain Reservoir. Operating Contingency for 2025 is budgeted at $164,394 which was calculated as 20% of Operating Expenses other than the Operations and Administrative contracts (fixed amounts).
NON-OPERATING REVENUE AND EXPENSE
Non-Operating Revenue for 2025 is budgeted to be $1,911,427 and is 108% higher than the 2024 budget of $920,000. Investment Income is budgeted to be $1,636,872 because the District has approximately $12 million in operating cash reserves and $26 million in bond proceeds - both earning an annual yield of about 5%.
Non-Operating Expenses for 2025 are budgeted at $2,166,550. Regarding capital expenses for system improvements, the District is wrapping up the successful replacement of water assets in Loveland Pass Village this year. In 2025, there are planned projects totaling $7,520,998 which will have a zero P&L impact. The largest expenditure is budgeted for the new Base 2 Storage Tank. It is anticipated that specifications and construction plans for the tank will be completed in the spring of 2025. The road access construction and new transmission line are budgeted for 2025, and the new tank will be constructed in 2026. All work on the Storage Tank will be dependent on final approval for the special use permit from the US Forest Service. Other significant system improvements include $1,074,000 for upgrades to Base 2 Water Treatment Plant to improve safety. Pipeline Replacements have a budget of $1,628,488. Another $818,510 is budgeted for smaller projects such as improvements to the Base 1 Pump Station and hydrant replacements.
BOARD APPROVAL
As District Administrator, I respectfully request the Board consider, discuss, revise, and approve the draft budget presented. The November 12th, 2024 Board meeting will have resolutions presented to adopt the budget, appropriate funds, and set the mill levy. Please contact me if you have any questions regarding any aspect of this proposed budget.
Respectfully Submitted,
Scott Price
Administrator- Executive Director
P.O. Box 2595
Dillon, CO 80435
Phone 970-468-0328
Email executivedirector@snakeriverwater.com
