Water Talks: Budget and Rates
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Water Talks: Budget and Rates

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Presentation by Eric Sandler, Director of Finance at May 31 Community Forum. Overview of the current Water Authority budget and recommended budget for FY 2012/13 and water rates for calendar year ...

Presentation by Eric Sandler, Director of Finance at May 31 Community Forum. Overview of the current Water Authority budget and recommended budget for FY 2012/13 and water rates for calendar year 2012.

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    Water Talks: Budget and Rates Water Talks: Budget and Rates Presentation Transcript

    • May 31, 2011 Eric Sandler Director of FinanceSan Diego County Water Authority
    • Capital Improvement Program (including CIP labor) 33.6% Water Purchases & Treatment 46.2% OperatingDepartments Debt Service5.5% 12.6% Other Expenditures Equipment Replacement 1.9% 0.2% 2
    •  Increasing costs to buy, transport water ◦ From 2008-2012, MWD approved rate increases totaling 55 percent for “Tier 1” treated supply ◦ Additional rate increases expected Investing in major water reliability infrastructure Changing sales volumes ◦ Water Authority sales down 38 percent since 2007 3
    •  Current budget reductions ◦ $2.4 million cut in FY 2010 ◦ $3.6 million cut in FY 2011 Elimination of spot water purchases Selling stored water Using rate stabilization reserves Challenging MWD’s rate structure 4
    •  Reduced water sales forecasts Shifting from “building” agency to “operating” agency ◦ Reorganization & consolidation for enhanced efficiency Manage personnel costs ◦ Staffing reductions to reflect agency’s evolution ◦ Increased employee contributions to pension benefits Seeking service efficiencies with Member Agencies 5
    • Water purchases & treatment $700,474 49% CIP Expenditures $321,129 23% Debt service $280,394 20% Operating departments $87,715 6% Hodges operations $6,052 <1% Equipment replacement $1,220 <1% Other expenditures $20,449 1% $1,417,434 100% Three categories account for 92% of the total budget:Water Purchases CIP Debt Serviceand Treatment 49% 23% 20% 6
    •  16 percent below amended FYs 10-11 budget Continues to fund vital water reliability projects and operations Comprehensive effort to reduce expenses and pass savings to ratepayers ◦ Deferred CIP spending (14 projects, $150 million) ◦ Operating department budgets reduced by $6.7 million ◦ Labor and benefit costs (including CIP) reduced by $4.5 million 7
    • Budgeted Staff Positions 310Full-Time Equivalents 298.00 300 294.00 289.55 290 285.25 280 (FTEs) 270 259.33 260 253.92 249.50 250 240 230 220 FY08 FY09 FY10 FY11 FY12 FY13 FY14  16% Reduction in FTEs (2008 – 2014) 8
    •  Recommended “all-in” wholesale treated water cost in 2012: $1,148 per acre foot 7.7 percent above estimated treated water wholesale cost for 2011 9
    • “All-in” Increase Melded Supply Distribution Rate Increase $82/AF $41/AF Storage * Customer 12% Service * ($10) 3% ($2)Transportation 12% ($10) Supply Water Authority MWD Increase 29% 50% 71% ($12) ($41) ($29) Treatment 23% ($19) *Converted to $/AF based on sales forecast 10
    • 250 200$ Millions 150 100 50 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Fiscal Year*Includes all estimated debt service payments on senior and subordinate issuances 11
    •  Award-winning budgeting and financial planning High credit ratings Fitch Moody’s S&P AA+ Aa2 AA+ Favorable financing terms ◦ Saving $50 million in interest from January 2010 bond sale 12