Aquifer district may dip into reserves to make budget for coming year

Kirk Holland, general manager of the Barton Springs/Edwards Aquifer Water Conservation District, gave the board of directors a balanced preliminary budget last week.

 

The problem? Holland had to look to reserve funds, to the tune of $208,000, to get the budget in the black at $1.6 million — and that’s after cutting about as much in spending.

 

The question he and directors faced last week was whether to go ahead and take the money from contingency and capital funds or scour the budget even further for savings.

 

“We’re concerned about the use of reserves to make this budget happen,” Holland told directors at a meeting Thursday, adding, though, that the budget had already been thoroughly scrubbed.

 

Holland told directors that the district has used $200,000 from reserves in the current budget year and that taking such an amount again in 2011 would be “uncomfortable.”

 

The district’s contingency fund has $376,000, and the capital reserve has $468,000.

 

The budget could be adopted as early as next Thursday.

 

The Barton Springs/Edwards Aquifer Conservation District is one of nearly 100 groundwater conservation districts in Texas that are authorized by the state to manage underground water resources in assigned geographical areas.

 

The district’s budget is funded mostly through water-use fees, and revenue from those fees is expected to decline in 2011. The district anticipates issuing fewer permits and bringing in less in water transport fees. In addition, a $100,000 grant it received under the federal Clean Water Act will expire at the end of this fiscal year.

 

Holland and board President Robert Larsen agreed they would discuss alternatives to digging into savings. For instance, Holland told the board the district could save about $9,000 by eliminating dependent coverage under the employee health insurance plan and could defer some spending until 2012.

 

Among the reductions in the preliminary budget were: cutting back on water quality monitoring for wells, scaling back on the study of desalination, and trimming spending on special investigations, such as the study of ground water flow patterns in certain parts of the district.

 

The preliminary budget does, however, include a 2 percent raise for employees, a $16,000 cost that Holland and the directors want to try to keep in the budget.

 

Holland presented the preliminary budget to the board Thursday night and told directors that the shortfall could have “some personnel impact” if they opt not to dip into reserves.

 

“Somebody has to go?” director Craig Smith asked Holland, to clarify the meaning of the phrase “personnel impact.”

 

“Yes,” Holland said. “There aren’t any easy answers that I see here, unfortunately.”

 

After the meeting, Holland told In Fact Daily that he didn’t want to speculate as to how many people could lose their positions and emphasized in a follow-up conversation that layoffs are just one option.

 

Holland told directors — four were present; Mary Stone was on vacation — they needed to form a standing finance audit committee, which the board had until four years ago and which is required under the Texas Water Code.

 

“We should have been looking at this all along,” Larsen told Holland about the spending.

 

After the meeting, Larsen told In Fact Daily that the district isn’t alone in its tight financial situation.

 

“We’re getting caught up in the same situation everyone else is,” he said. “We eventually will overcome this, but what it forces us to do is to cut some forms of research studies and operations that we didn’t want to cut.”