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The figures in Table 1 for 1992 and 1993 are the actual audited amounts. The 1994 audit is not yet completed. As indicated, expenditures in 1993 and 1994 were considerably in excess of the current levy cap of $125,000 and will be considerably in excess of the levy cap in 1995. Other watershed districts in the Twin Cities metropolitan area have encountered similar financial problems, and some have had their administrative fund levy caps raised to $200,000 by action of the legislature (e.g. Ramsey/Washington, Rice Creek, Minnehaha Creek). This has been done by special legislation, rather than by amendment to the Watershed District statute. Senator Leonard Price has introduced such special legislation in the Senate this session for the Valley Branch Watershed District (see attached). A companion bill has not yet been introduced in the House. All of the district's basic administrative expenses have increased very significantly since 1983, both because of inflation and because of increased development within the watershed district. As a metropolitan watershed district, the VBWD has special responsibilities --and associated expenses --under the Metropolitan Surface Water Management Act, Effective January, 1994 it also has new responsibilities under the Wetland Conservation Act, since it serves as the local governmental unit (LGU) for all municipalities in the district. Since 1983 the consumer price index has increased by more than 50% and some of the district's expenditures have increased at an even faster rate. The district's greatest expenses are for engineering services. In 1983 the hourly billing rate for the district engineer from Barr Engineering was $36 per hour. In 1995 it is $70 per hour, an increase of nearly 100%. The district's other expenses have also increased significantly since 1983. The manager's per diems, which are set by statute at $50, are the only expenses; that have not increased since 1983, and they would not be affected by the increase that the district is seeking in the administrative fund. The district's actual financial situation is a bit worse than what is detailed in Table 1. The district's fiscal year begins in January, but its tax receipts are not paid to it until July (50%) and December (50%). Accordingly the district should maintain an operating reserve in the administrative fund equal to 50% of the levy amount (i.e. $62,500). As shown in Table 2 below, the VBWD has not been able to maintain a reserve for the past three years and, as a consequence, it has an actual, current operating shortfall of more than $105,000 and a projected operating shortfall of more than $135,000 by the end of 1995. Table 2: Summary of Operational Shortfall 1992 1993 1994 1995 Administrative Fund. Balance $27,208 ($10,381) ($43,075) ($73,075) Recommended Operating Reserve (50% of $125,000 Levy) ($62,500) ($62,500) ($62,500) ($62,500) Operating Balance/(Shortfalb ($35,292) ($72,881) ($105,575) ($135,575) The VBWD is able to continue its operations only because Washington County has been advancing it funds. The VBWD will not be able to do what it is required to do by law and what the district's citizens expect of it unless the administrative fund levy cap is increased. For additional information contact Peter Zetterberg, President, Valley Branch Watershed District 626-0577 (days) or 770-2414 (evenings/weekends)