The Pearl River Valley Water Supply District (PRVWSD) has mapped out its budget for fiscal years 2021 and 2022. However, district officials are keeping the financial future of the PRVWSD on their minds, stretching well beyond the next two years.
In fact, a recent study showed that the district would need to bring on additional revenue streams before it would be able to budget anymore for necessary projects, which would require more annual income.
More than five years ago, the Central Mississippi Planning and Development District (CMPDD) completed a study on the PRVWSD long-term financial outlook, along with ways the district can improve financially.
This study was the first, and last, of its kind to be done for the district. It was part of the PRVWSD master plan which was adopted in 2013. The master plan included an economic impact report to “help justify future funding requests.”
According to the findings from the study, the district could continue functioning as is for another 15 years.
However, PRVWSD staff indicated a need to increase the annual expenditures by $1,250,000 in the future for dredging, dock repairs and unplanned equipment purchases. To accomplish this, CMPDD found that the district would need to develop properties that were not being leased at that time to bring in additional revenue.
According to reservoir General Manager John Sigman, the district is a special fund agency, which means they receive no appropriation from the state general fund or tax revenue.
Their budget is funded through the following revenue sources: rent on property from the 6,200 annual residential and commercial lease fees; timber sales; income from water and sewer, which services four different sewer systems with 5,200 customers; campground fees; and building permits.
The majority of these funds are used for improvements and day to day maintenance of the district.
“Increases in expenditures can be had only if there are increases in revenue to support them,” Sigman said. “Some of our projects depend on obtaining grants, and we have to budget for them before we get the grants. This is why in a given year, the budget may exceed the revenue. Because we get no money from the state, our budget is actually a spending authorization.”
Annually, the district brings in approximately $6,742,380 from residential and commercial leases, $2,382,682 from campground fees, $4,328,070 from water and sewer services, $237,805 for building fees and $925,350 from the sale of equipment and timber.
Other miscellaneous income and park events revenue brings in an additional $3 million.
“Timber revenue is variable in time and price,” Sigman said. “It fluctuates as the price of timber moves and as our timber is ready for harvest. We harvest timber when it is ready to harvest, not when we need funds. We have delayed timber harvests in the past when prices were low. But you cannot delay timber harvest indefinitely because the trees start deteriorating and value is lost.”
Currently PRVWSD operates with an annual budget of approximately $20 million, which is funded through these revenue streams.
The requested budget for fiscal year 2021 is $20,209,440, which includes salaries, travel expenses, contractual services, commodities, among other expenditures.
The district has attempted implementing other revenue sources in the past, such as sales tax diversions from commercial properties and lake usage fees. However, due to strong opposition from leaseholders, the plans failed.
If the usage fee - which would have required boaters to purchase a sticker for their watercrafts before visiting the reservoir - would have worked out, the district would be collecting an additional $200,000 annually.
In the CMPDD study, five existing undeveloped properties were identified as potential growth opportunities for the reservoir, which would bring in significant income. One of these properties, Brown’s Landing, has since been leased for a residential development, which will include 212 home sites as well as commercial components.
“Brown’s Landing is the only new development underway at this time,” Sigman said. “We continue to generate new leases, which result in new revenue, within developed property like Lost Rabbit and Arbor Landing.”
Once lots begin to be taken on by individuals, Sigman said that property will then become a series of residential leases.
“We have been paid for the initial lease for Brown’s,” he said. “The rest of the money will come in as the property is leased to individual homeowners. These leases may average around $800 per year each.”
New options for revenue sources is something the district will continue to look into, however, Sigman said leasing property remains their largest revenue stream.
“We continue to consider new sources of revenue. The best revenue source is the business we are already in; leasing property,” Sigman said.