On Tuesday, November 12, 2024 at the regular meeting of the SRWD Board of Directors, the proposed budget for 2025 was approved. A copy of the approved budget is available below.
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 $431,175 (after contingency). Relative to the approved 2024 budget, the proposed 2025 budget shows a 12% increase in operating revenue and a 19% 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 12% increase in operating expense (before contingency).
The 2025 Change in Net Position is budgeted for $176,052. The primary factors for this result are $2,139,491 in Operating Revenue, $1,911,427 in Non-Operating Revenue, $1,708,316 in Operating Expenses, 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. There are planned system improvement projects totaling $7,520,998 which 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.
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 $489,040 as compared to a budget of $487,773. There is a projected usage of $74,422 of the budgeted $144,799 Operating Contingency, which is primarily the result of Water Rights Legal Fees being $90,850 above budget.
In 2025, Operating Income is budgeted at $431,175. This income is 12% lower than 2024 projections. Inflation continues to be persistent, and certain categories of expense are expected to outpace inflation; namely, insurance and legal fees. The GIS Engineering budget has been increased by $45,000 to pay for a project that will digitize paper as-built record drawings of the District’s distribution system assets. These digitized drawings will be available to the Operations Team anytime, anywhere to solve problems. PFAS expenditures are budgeted at $105,000. 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 $1,524,972 which is 19% above the 2024 budget and 12% above the 2024 projected actual. A large increase in operating expenses for 2025 versus 2024 budget is a 418% 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 $183,344, 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 $920,020. 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%.
Regarding capital expenses for system improvements, the District is wrapping up the successful replacement of water assets in Loveland Pass Village this year. 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.
RESOLUTION #4-2024
RESOLUTION TO ADOPT THE 2025 DISTRICT BUDGET
A RESOLUTION TO SUMMARIZE EXPENDITURES AND REVENUES FOR EACH FUND AND ADOPT A BUDGET FOR THE SNAKE RIVER WATER DISTRICT, SUMMIT COUNTY, COLORADO, FOR THE DISTRICT FISCAL YEAR WHICH IS REFLECTED IN THE CALENDAR YEAR BEGINNING ON THE FIRST DAY OF JANUARY 2025 AND ENDING ON THE FINAL DAY OF DECEMBER 2025.
WHEREAS, the Board of Directors of the Snake River Water District has appointed Scott Price, District Administrator, to prepare and submit a proposed budget to the governing body of the District at the proper time, and;
WHEREAS, upon due and proper notice, published in accordance with Colorado law, said proposed budget was open for inspection by the public at a designated place, with an opportunity for review, and a public hearing was subsequently held on November 12, 2024, and interested electors were given the opportunity to state, file or otherwise register any objections to the proposed budget, and;
WHEREAS, whatever increases may have been made in the expenditures, like increases were added to the revenues so that the budget remains in balance, as required by law, and;
WHEREAS, notwithstanding any operating loss and negative change in net position, the District has sufficient reserves and liquidity to meet all its obligations on a timely basis.
NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the SNAKE RIVER WATER DISTRICT, Summit County, Colorado:
SECTION 1. That the estimated expenditures for 2025, including contingencies, are as follows:
| Operations and Administrative Expenditures | $1,708,316 |
| Bond Principal & Interest Expenditures | $2,166,550 |
| Capital/System Improvements | $7,520,998 |
| Total Expenditures | $11,395,864 |
SECTION 2. That the estimated revenues for 2025 are as follows:
| Total Operating Revenue | $2,139,491 |
| Non-Operating Revenue | $1,911,427 |
| General Property Tax | $0 |
| Total Revenue | $4,050,918 |
SECTION 3. That the emergency reserve account is as follows:
| Carryover from Previous Years | $1,500,000 |
| Transfers into or out of the Emergency Reserve Account | $0 |
| Total Projected Emergency Reserves on 12-31-24 | $1,500,000 |
SECTION 4. That projected capital/system improvement expenditures for 2025 are $7,520,998.
SECTION 5. That total funds (checking and savings) for the District are as follows for 2025:
| Beginning Balance | $37,944,582 |
| Estimated Operational Expenditures | $1,708,316 |
| Estimated Net Revenue | $4,050,918 |
| Estimated Bond Principal & Interest Payments | $2,166,550 |
| Estimated Capital Expenditures | $7,520,998 |
| Estimated Ending Total Cash and Securities | $30,599,636 |
SECTION 6. That the total funds on 12-31-25 without restriction are as follows:
| Total Estimated Cash and Securities | $30,599,636 |
| Less: |
|
| 2025 Estimated Year End Emergency Reserve Balance | $1,500,000 |
| 2025 Estimated Year End Capital System Improvement Balance | $18,718,339 |
| Estimated 12-31-25 Total Funds Without Restriction | $10,381,297 |