Board reviews finances, sees growing reserves and plans fee audit

During the Nov. 22 meeting, Assistant Executive Officer Mark Ito presented the board’s fiscal position and urged prudence despite a growing reserve balance.

Ito said the board’s current-year budget is $18,080,000 (a decrease of roughly $318,000 from the prior year). Based on revenues through fiscal month 3, the board projects roughly $24,960,000 in revenue — largely driven by license-renewal fees implemented via prior regulation — and projected expenditures of about $19,250,000. He described the board as “structurally imbalanced” in that revenue growth has outpaced planned expenditures and noted months in reserve are projected to increase by roughly three months per fiscal year, hitting nearly 19.7 months in later projections.

To address the growing reserve, Ito said staff will conduct a fee audit to “right size our fees,” meaning the board intends to align license and applicant fees more closely with the administrative cost of each license type. He noted some one-time and ongoing personnel and Attorney General costs as drivers of expenditure increases, including reclassification of education positions and higher legal-service usage.

Board members asked clarifying questions; no vote was required on the presentation. Staff said the fee audit will inform future budget-change proposals.

Quote: “We’re going to do a fee audit so we can right size our fees,” Mark Ito said when summarizing near-term steps.

What’s next: Staff will undertake the fee audit and present recommendations in a future meeting; the board will continue to monitor months-in-reserve and anticipated expenditures.