RCA approves midyear budget adjustments after sharp drop in development‑fee revenue

The Western Riverside County Regional Conservation Authority voted unanimously April 6 to receive the quarterly financial report and to approve midyear budget adjustments after staff reported a steep decline in development‑fee receipts.

Jennifer Fuller, Deputy Director of Finance, told the board that local development mitigation fee (LDMF) collections through the second quarter of fiscal year 2025‑26 were $6.5 million, down from $11.9 million in the same period a year earlier. "Fiscal year 2025‑26 LDMF revenues collected through the second quarter are $6,500,000 and are approximately $5,400,000 or 45% less than the $11,900,000 collected through the same period in the prior fiscal year," Fuller said.

Fuller recommended lowering the year‑end LDMF projection from $25.6 million to $18 million and reducing Transportation Uniform Mitigation Fee (TUMF) revenue projections from $1.1 million to $700,000. Staff also proposed contract and revenue reclassifications to reflect current collections and staffing changes, including proposed downward adjustments of roughly $7.6 million for LDMF and $400,000 for TUMF, about $333,000 in other revenue adjustments, and contract changes totaling about $168,000.

Why it matters: RCA relies heavily on LDMF as a primary revenue source for acquiring and managing reserve lands under the MSHCP. Fuller cautioned the board that LDMF is cyclical and tied to development activity: "The decline in LDMF does not appear to be from [a reporting] lag, but rather, it's by a decline in development activity in Western Riverside County," she said.

Board members pressed staff on forecasting methods and data sources. One member asked whether forecasts are tied to housing starts or permits; Fuller said the agency relies on historical patterns and noted that an RFP coordinated with WRCOG to obtain projections received no responses. "We can definitely look into more of just getting data from people as opposed to the projections themselves," she said.

Several members questioned whether recruitment for two new full‑time positions should continue amid the shortfall. Staff replied the positions are critical for implementation work approved at a prior workshop and that RCA remains within board reserve policy for the near term. "We're in compliance with board policies," Fuller said, adding staff will use reserves and internal projections to finish the current fiscal year without cutting already‑funded projects.

The motion to approve the staff recommendations was moved by the San Jacinto representative, seconded by District 3, and passed unanimously.

What happens next: The board approved the adjustments requested in staff Attachment 2; staff will implement the accounting reclassifications, proceed with the ongoing recruitments, and continue monitoring revenue receipts and project prioritization.