San Dieguito posts $26.3 million in revenue for FY2024-25; audit returns unmodified opinion

San Dieguito Water District posted $26,300,000 in revenue for fiscal year 2024-25, about 15% above the adopted budget, Finance and Administrative Services Manager Shoshana Aguilar told the board at its Jan. 28 meeting. Aguilar said higher potable water sales, meter service charges, property taxes and recycled-water sales contributed to the surplus, and that the district made its final debt service payment and now holds no debt.

The district spent about 87% of its operating budget and expended $3.1 million on capital replacement projects, Aguilar said. She reported the district's funded ratio for pension and other post-employment benefits rose from 71.57% to 73.86%. Aguilar said beginning net position was $24.7 million and projected unrestricted net position after appropriations and reserves was about $1,000,000. She noted that the capital improvement reserve is currently below target and the rate-stabilization reserve has no balance.

"We were able to meet the target level for our operating reserves," Aguilar said, adding the capital improvement reserve is about $4.2 million below target and the rate stabilization reserve needs roughly $3,250,000 to reach its board-approved target.

Outside auditors from the engagement partner Coley Delaney summarized the audit and required communications. Delaney said the district implemented GASB 101 (compensated absences) and that a change in accounting for the district's investment in the R.E. Badger treatment plant produced a prior-period adjustment. The audit firm issued an unmodified (clean) opinion, reporting no material weaknesses, no significant deficiencies in internal control, and no findings of fraud, waste or abuse.

Delaney summarized year-over-year movements: cash and investments increased by about $1.5 million, accounts receivable by $400,000, and inventory/prepaids by $1.3 million. A prior-period adjustment reduced reported investment in a joint venture by about $24.8 million and reclassified much of that amount into capital assets, which in turn increased depreciation expense.

Boardmembers asked about the timing of the next cost-of-service update, which Aguilar said staff expects to scope and issue a request for proposals around June or July 2026 and return the completed study to the board around February 2027. Aguilar emphasized that the board-approved rate increases already scheduled will go into effect this coming July and that staff plans to work with an outside rate consultant to revisit reserve policy and recommend any needed changes.

The board received and filed the FY2024-25 year-end financial report; no separate motion was required to file the report.