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.
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