Title
Receive report from EAA staff regarding the public hearing process and consider recommendation from the Finance/Administrative Committee to adopt the annual operating budget and associated aquifer management fee and program aquifer management fee rates for fiscal year 2025.
Body
RECOMMENDED MOTION:
Move the board adopt Resolution and Order No. 11-24-113 of the Edwards Aquifer Authority Board of Directors adopting the annual operating budget for fiscal year 2025, as amended, and assessing the aquifer management fee and program aquifer management fee rates for 2025, as follows:
Agricultural aquifer management fee (General Fund) -- $2 per acre-foot
Non-agricultural aquifer management fee (General Fund) -- $50 per acre-foot
Non-agricultural program aquifer management fee (EAHCP Fund) -- $40 per acre-foot
SUMMARY:
The purpose of this agenda item is for the board to consider a Finance/Administrative Committee recommendation to adopt the proposed budget and the associated aquifer management fee (AMF) and EAHCP program aquifer management fee (PAMF) rates, for 2025, and to receive a report from EAA staff regarding the public hearing process.
EAA staff presented the General Manager’s 2025 Proposed Budget to the board on September 10th. On October 8th, the EAA board authorized staff to conduct a public meeting on the proposed budget, AMF, and PAMF rates. EAA staff held one public meeting on the 2025 proposed budget on Wednesday, October 9th both in the EAA Board Room and virtually, via Zoom Videoconference. Additionally, staff made the 2025 proposed budget and presentation available on the EAA website and social media. Public input and comments to the proposed budget could be submitted via written correspondence and delivered by US mail, email, or fax to the EAA, or provided in person before the Finance/Administrative Committee. A total of 3 individuals attended the public meeting (virtually) with 1 attendee in person. Oral comments were presented at the October 9th public meeting by the general manager of Bexar County WCID 10, a permit holder, pertaining to the assessment of aquifer management fees based on total permitted water in times when critical period management reductions are in effect. More specifically, the concern expressed was about having to pay fees for authorized water that cannot be pumped due to regulatory curtailments and that if critical period would continue into 2025 he would, in effect, be paying even more for that water under the new increase fee rate. He expressed a desire for the rules to be changed accordingly. EAA’s response is that the EAA Act establishes that the “authority shall assess the fees on the amount of water a permit holder is authorized to withdraw under the permit.” For agricultural use, the EAA Act states: “The fee rate for agricultural use shall be based on the volume of water withdrawn and may not be more than $2 per acre-foot.”
In addition, the EAHCP Budget Work Group, established by the EAHCP Implementing Committee, met on August 28th to review and discuss the EAA’s management of EAHCP revenue, expenses and reserve balance as it has done customarily in the past. The Work Group issued a report, which was presented to the Implementing Committee on October 10th and is attached to this summary as a public comment on the proposed budget. In a departure from previous years, the Work Group made no finalized recommendation for the Implementing Committee to forward to the EAA Board but referred items to the EAHCP Implementing Committee for discussion, consideration, and action in formulating a recommendation to the EAA Board regarding the 2025 proposed budget. Work Group items referred to the Implementing Committee for consideration related to funding and included: (1) disposition of reserve funds in relation to the new/renewed HCP; (2) the potential of managing the EAHCP program costs using a single, shared EAA reserve fund; (3) the prospect of disconnecting cost hikes from program-triggers when funding all springflow protection programs in the renewed EAHCP; and (4) the consideration for start-up costs for the renewed EAHCP. Each of these issues have been or will be taken under advisement as the financing structure of the new EAHCP is developed. At the Finance/Administrative Committee on October 22, the Chairman of the EAHCP Budget Work Group, Dr. Robert Mace of The Meadows Center and representing Texas State University, will present highlights of the EAHCP Budget Work Group report.
As proposed, the 2025 budget is broken down into three primary areas. The proposed 2025 General Fund Budget totals $24,777,414, with no changes proposed since the presentation of the General Manager's proposed budget. The AMF rate required to fund the operations of the General Fund is $50.00 per acre-foot, per annum, for non-agricultural users. The proposed agricultural AMF rate of $2.00 per acre-foot is set by statute in the EAA Act and is limited to General Fund revenue.
As proposed, the 2025 EAHCP Fund Operating Budget totals $21,075,501, which is an increase of $715,600, since the presentation of the General Manager’s proposed budget. This increase is due to amendments to the City of San Marcos 2025 EAHCP funding application considered earlier on this agenda. The EAA’s funding application includes forbearance payments for the Voluntary Irrigation Suspension Program Option (VISPO) Springflow Protection Measure. On October 1, 2023, the aquifer well reading at Well J-17 was below 635 feet mean sea level thereby requiring forbearance of pumping in 2025 and, per VISPO agreements, payment for forbearance. The Program AMF rate required to fund the EAHCP Fund is $40.00 per acre-foot, per annum, for non-agricultural users.
Also attached to this agenda item is the 2025 Proposed Budget summary document, which includes the EAHCP amendments discussed above and a draft resolution and order, which has been reviewed by legal counsel.
At the meeting on October 22, the Finance/Administrative Committee voted to recommend the board adopt a resolution and order of the Edwards Aquifer Authority Board of Directors adopting the annual operating budget for fiscal year 2025, as amended, and assessing the aquifer management fee and program aquifer management fee rates for 2025, as follows:
Agricultural aquifer management fee (General Fund) -- $2 per acre-foot
Non-agricultural aquifer management fee (General Fund) -- $50 per acre-foot
Non-agricultural program aquifer management fee (EAHCP Fund) -- $40 per acre-foot
STRATEGIC PLAN REFERENCE:
This agenda item supports the general EAA mission.
FISCAL IMPACT:
The total proposed 2025 General Fund budget is $24,777,414. The AMF required to fund the operations of the General Fund is $50.00 per acre-foot, per annum, for non-agricultural users. The agricultural rate of $2.00 is set by statute in the EAA Act and is limited to General Fund revenue.
The total proposed 2025 Edwards Aquifer Habitat Conservation Fund Operating Budget is $21,075,501. The program aquifer management fee required to fund the operations of the EAHCP is $40.00 per acre-foot, per annum, for non-agricultural users.