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Pacifica board reviews draft FY26–27 operating budget; plans June approval
Summary
Finance staff presented a draft FY26–27 operating budget and calendar, highlighting an assumption of flat water volumes, an anticipated 8% rate increase in January 2027, and a modest decline in interest income after using one-time proceeds; the board treated the draft as information and will consider formal approval in June.
The Pacifica Board of Directors received a draft of the FY26–27 operating (O&M) budget and a review of the board’s budget calendar during its April meeting. Jeff, the board’s finance presenter, said the document is for information only this month and that formal approval of both the O&M budget and a 10‑year capital-improvement plan is expected in June.
Jeff told the board staff is planning for flat water‑sales volumes year over year and identified several key assumptions: an 8% water‑rate increase scheduled for January 2027 (the final step of a previously board‑approved multi‑year increase), a modest decline in interest income after one‑time certificate proceeds are exhausted, and personnel changes that include step increases for most staff. He said nonoperating revenues and certain one‑time items have helped offset lower water‑sales revenue to date.
The presenter also called out drivers that shape the draft: lower-than-budgeted water volumes (which reduce operating revenue), favorable nonoperating revenue items totaling about $446,000 through the period presented, and roughly $913,000 in favorable contribution to CIP and reserves year to date. He said the district has assumed a portion of water purchases will come from a particular source and noted a confirmed increase in raw water costs identified in the packet.
Directors asked staff to continue work on strategies to increase connections and water sales, stressed the need to preserve liquidity and the asset base, and recommended continued diligence as the draft is refined. One director encouraged staff to look for ways to expand connections where feasible so the district can better sell excess capacity as housing projects proceed.
Next steps: staff will present the 10‑year CIP at the board’s next meeting, refine budget details with the finance committee and return to the board in June with a request to approve the O&M budget and CIP plan.
