The Marin Municipal Water District is proposing a $183 million budget for the next fiscal year focused on water supply, watershed work and technology upgrades.

The district’s $67 million capital improvements fund will pay for launching major water supply projects, including the work toward the new pipeline that will tap into the North Marin aqueduct to redirect Sonoma County water to Marin reservoirs, said Bret Uppendahl, the district’s finance director.

Uppendahl said the proposed budget is a 12% overall increase “driven almost entirely by the capital fund increase of 35%.”

“Our top priorities,” Uppendahl said, “are in line with our strategic plan and other work plans. They include water supply resiliency, water system improvements, watershed restoration and then also technology modernization.”

The district board is set to hold a budget hearing on June 3. A draft budget was presented at a workshop on May 7.

The largest portion of the expenditure plan is the operating fund, which accounts for $113 million, 4% increase over the year prior, Uppendahl said.

District revenue is expected to be about $181.8 million.

“All of the revenues to support our capital investments and our operating expenditures are provided primarily by customer water rates,” Uppendahl said.

“It’s good to see, you know, we asked the customers to trust us on a rate increase two years ago, and to see a responsible investment with that money back into the system is a real good-feel moment for me,” board president Matt Samson said.

Water rate revenue makes up 91% of total revenue, Uppendahl said. The district says about $115.7 million from water sales makes up 70% of that; $26.3 million from service charges is 16%; $17.8 million from capital maintenance fees is 11%; and $5.8 million from watershed management fees 3%.

“The revenue projections that support all these expenditures are largely consistent with the existing rate structure,” Uppendahl said.

Uppendahl said the spending plan has increased about 5% annually over the past 10 years. The average increase in capital spending was about 12%, but that has more than doubled since 2023 because of the rate increases approved to boost supply and drought resiliency.

Other cost drivers for the budget increase include personnel services, which are primarily cost-of-living wage increases resulting in a 5%, or $3.2 million, increase over the previous budget. Purchased water, which primarily comes from the Sonoma County Water Agency, is projected to increase 8% by about $1 million.

Professional fees are also increasing 26%; electricity is going up 11%; taxes, fees and licensing are going up 23%; and insurance up 9%, Uppendahl said.

The district, which supplies water to 191,000 residents, operates five divisions: administrative support, operations, engineering, watershed and water resources.

The administrative support division has 60 full-time equivalent employees who will operate on a $18.9 million budget, an 8% increase, according to the draft plan. The division includes the board, the general manager and legal, personnel, public information, finance and other supportive teams.

The operations division, which works to deliver the water to customers, is staffed with 97 employees in maintenance, water treatment and support. The division has an estimated base budget of $32.7 million, a 1.1% decrease.

The engineering division has a base budget of $11.2 million for 45 full-time equivalent employees. The division is responsible for planning, design and construction. The division budget is a 15% increase over the previous year.

The watershed department, responsible for roads and trails, vegetation management and creek restoration, will operate on a $9 million budget, an 8.7% increase, with 27 full-time equivalent employees, 10 seasonal workers and three AmeriCorps staffers.

The water resources division is budgeted to operate with $8.6 million, a 15% increase, with 25 full-time equivalent staffers. The division is responsible for long-term water supply planning, water efficiency and quality.

The new fiscal year starts July 1.