Revenue shortfall creates budget worries for aquifer district

Revenue is down for the Barton Springs Edwards Aquifer Conservation District and its board members are starting to worry.

The members expressed concerns at Thursday night’s meeting as they approved the fiscal year 2015 budget, citing a revenue loss of $26,000 from last year and nearly $40,000 in the last two. Though the budgetary gap is made up with funds from the district’s cash reserves, board members are concerned about the sustainability of borrowing from that pool. The district may soon be looking at both raising its rates and adding additional permitting fees.

“To go in and continue to take out is just concerning,” said board member Mary Stone. “If it was my budget at home I’d be really concerned.”

“It won’t sustain itself,” added Board President Bob Larsen.

The aquifer district has $1.36 million in a reserve account – money allocated for previous years’ budgets that went unspent. The stockpile has more than enough to cover the recent financial shortcomings, but expensive projects in the future could drain it quickly.

In the 2015 budget, transfers from the reserve account are meant to cover a new $160,000 “multiport” monitoring well. The well would be the district’s third, and data from the previous two has contributed significantly to its management of the Trinity Aquifer.

But the district won’t need a new well every year.

“If they did that on a regular basis, and we depleted those reserves and we operated on transfers year-to-year without replacing that money, it would ultimately become a problem,” General Manager John Dupnik said. “Even if we spend this money, we should be about where we have been, on average.”

Revenue constraints have forced Dupnik and his staff to trim from all corners, he said. But the operating budget for 2015 is somewhere between $1.5 million and $1.7 million (depending on how much is taken from the reserves), about equal to the expected revenue.

“Programmatically, since our revenues are starting to come down, that’s where we really had to shave and cut and adjust and really look to those more consistent operational expenditures to figure out if we can, on a long-term basis, maintain our programs with a little bit less money,” Dupnik said.

Fixing the district’s revenue problems could end up as part of a conversation at the State Capitol. Texas pumping fees are capped by the state water code, currently at 17 cents per thousand gallons, so Dupnik says that approaching the Texas Legislature in the 2015 session is a possibility.

“(The fee cap) is extraordinarily cheap, and it’s been like that for about 20 years now, so it’s getting to the point that just the cost of doing business is going to dictate whether we need to do that or not,” he said. “I don’t believe we’re there yet though.”

However, he conceded that with the ongoing drought, the political climate in the legislature might be just right for the conversation. An alternative, or even a concurrent measure, raised at the meeting was adding additional fees within permit applications.

According to Dupnik, for his organization, revenue and conservation are two sides of the same coin: the less water pumped out of the Barton Springs segment of the Edwards Aquifer – a goal of the district as a part of its conservation efforts – the less money it will bring in.

“If you really are effective in compelling conservation, it’s going to affect your revenues. It’s a reality, but our goals are to reduce pumping,” Dupnik said.