The Ukiah Valley Basin Groundwater Sustainability Agency on Thursday approved a proposed fiscal year 2025–26 operating budget that projects $1.32 million in revenue and $1.14 million in expenditures, and adopted a resolution to implement a 2.24% regulatory fee increase to be placed on the Mendocino County tax roll.

The budget, presented by the agency’s General Manager, funds activities intended to meet requirements of the Sustainable Groundwater Management Act. The GM said staff “recommends board approval of the proposed budget” and noted the revenue total represents a 48% increase from the prior year while expenditures reflect a 60% increase, driven chiefly by grant funds and a planned technical study of interconnected surface water and groundwater-dependent ecosystems.

Board members and staff emphasized why the increases matter. “We are trying to integrate where expenditures are going and what value we’re getting in response,” the General Manager said, noting line items linked to GSP implementation tasks including periodic model updates, a well inventory, a rate-and-fee study and the interconnected-surface-water study identified in the groundwater sustainability plan.

Directors pressed for more detail on actual spending to date and how that affects reserve and rate decisions. Director Bailey asked staff to provide year-to-date actuals and said it “would be really helpful that it was requested at the last meeting and recorded in the draft minutes that you would provide the spend that you've actually done this year.” The GM responded that current actuals would be presented and that the ad hoc budget committee had reviewed them during formulation.

Agency staff and contractor West Yost told the board the GSA realized year-end savings during a recent management transition to the City of Ukiah. Harry Starkey of West Yost said the city’s temporary assumption of some tasks produced roughly $30,000 in savings that are expected to “fall to the bottom line at the end of the fiscal year.”

Board members discussed reserves and the timing of outstanding invoices. The GM and West Yost said some invoices remain and that the current fiscal-year actuals are through April; one staff forecast cited roughly $350,000 of available budget in the last two months but said it did not expect that full amount to be spent. Director Bailey noted projected year-end fund balances ranging from $91,000 (adopted projection) to $177,000 (if spending is lower), and asked whether fee increases under consideration should be adjusted in light of higher-than-expected reserves.

Vice Chair Crane urged clearer presentation of core operations versus one‑time or grant-funded items so the public can see what revenue supports basic operations and what supports additional projects. Crane said the board previously discussed building reserves and that a multimonth reserve is prudent to manage uneven fee receipts and reimbursement timing.

The board voted unanimously to adopt the budget. The motion to adopt the recommended action passed on a roll-call vote with Directors Gaska, Bailey, Vice Chair Crane and Clerk Klein voting yes.

On a related agenda item the board adopted a resolution to place adjusted regulatory fees on the county tax roll; staff said the action implements a 2.24% increase tied to the fee study adopted in 2024. GSA legal counsel clarified the board was “not changing the GSA’s 2024 fee. We’re not adopting a new rate and fee structure. We’re only implementing the fee that was established in 2024,” and that the adopted approach presumes a 4% cap while the board chose a lower CPI-based increase. The fee resolution passed on a unanimous roll-call vote.

Public comment during the budget discussion urged caution. Sean White, a member of the public, said the GSA is “very young” and urged the board to “stay conservative” while it develops more financial data to guide future rate decisions.

Board members asked staff to return to the August meeting with finalized year-end actuals and recommended that the board consider a formal reserve policy; directors suggested a minimum of three months and discussed options between 25% and 50% of annual expenditures while the agency’s spending patterns are still developing.

The board also authorized limited contract extensions to ensure continuity of services while staff finalizes term dates and scopes for several vendors that support GSP implementation.

The agency scheduled a follow-up on year-end actuals and an itemized reserve policy for a future meeting so the board can align fee decisions with final fiscal-year results.