Title
Receive a report on the Lakes Resort and Operations Enterprise Fund providing an update on current year estimated financial condition.
Report
RECOMMENDATION:
It is recommended that the Budget Committee receive a report on the Lakes Resort and Operations Enterprise Fund providing an update on current year estimated financial condition.
SUMMARY:
As the fiscal year is ending, the Resource Management Agency (RMA) is projecting the Lakes Resort and Operations Fund will end the Fiscal Year (FY) 2018-19 with an operating deficit of $2,272,355. Since the formation of the Lakes Enterprise Fund, the Lake operations have yet to break-even, and between FYs 2013-14 to 2017-18, the Fund experienced annual losses ranging from $1.5 to $3 million, requiring general fund subsidies. The major contributing factors include the reliance on the reservoir levels for recreational purposes, the unpredictability of the annual weather cycle, and unprofitable scale of operations at Lake San Antonio (LSA).
Monterey County Water Resources Agency (Agency) owns and operates two dams, which formed the two bodies of water known as Lake Nacimiento and Lake San Antonio (collectively referred to as "the Lakes". The Agency operates these reservoirs to provide flood control services and maintain a sustainable water resource for Monterey County residents (current and future), including the Agricultural sector. The Agency provides an estimated annual reservoir release schedule, but actual releases are impacted by annual rainfall and can change without notice. The County's lease of the land for recreational activities provides no guarantee of yearly water levels.
Droughts are a recurring feature of California's climate, and between Fall 2011 and 2015, California experienced the driest period since record-keeping began in 1895. The latest drought elicited a formal emergency declaration by then governor, Jerry Brown beginning in January 2014 and ending in April 2017. Droughts hit agricultu...
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