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Committee reviews draft 2026–27 budget, hears proposal to increase reserve contribution
Summary
Staff presented a draft zero-based budget, reported a projected operating shortfall that partly relies on property-tax receipts, and proposed a modest reserve-rate add-on; committee agreed to send the draft and rate materials to the board to trigger a Prop 218 notice.
The Rancho Murieta Finance Committee on March 12 heard a detailed draft of the 2026'27 budget and preliminary rate analysis from district finance staff. Cecilia said staff shifted to a zero-based budgeting approach, reviewing 1.5 years of invoices vendor-by-vendor to correct historic miscodings and to produce a more accurate baseline for rate-setting.
Cecilia described a budget picture driven by rising operating costs: operating revenue was running about 57% of the annual budget to date (benchmark 58%), operating expenses ~59% and G&A ~71%. She said chemical and utility-cost increases, higher legal and consulting fees, and emergency repairs are driving a projected shortfall; at one point she quantified an operating deficit of about $448,000 (after property-tax receipts), and later projected the full budget package would still show a loss before applying property-tax income.
To limit reserve erosion, Cecilia proposed a targeted reserve contribution increase and said she was proposing a $5-per-account addition to strengthen operating and capital reserves; she framed that as part of a broader rate package to be finalized after audits and additional analysis. She noted district history of small annual increases (examples in the packet included prior $13 and $26-per-month steps) and told the committee that industry comparisons and CPUC-regulated water-company increases informed the approach.
Board members discussed options including tiered usage charges, rebalancing base vs. volumetric charges, and communicating with ratepayers; multiple members warned that any conservation-oriented reallocation of charges must be revenue neutral and supported by analysis. Cecilia said a tiered structure and other rate design work will require more time and better historical financial data once audits are complete.
The committee resolved to forward the draft budget and accompanying rate cards to the full board so the board can consider approving the Prop 218 noticing process to begin public notification.
What happens next: staff will finalize financial corrections, refine the proposed rate schedule and reserve contribution, and present a Prop 218 package to the board for potential approval and public notice.
