Strong Financial Management

Strategic stewardship of the Water Authority’s financial resources enables the agency to perform its core function of delivering a safe and reliable water supply and to embrace its core characteristics – pioneering, visionary, agile and driven. By adopting a two-year budget, the Board of Directors emphasized a continued focus on innovation and efficiencies. At the same time, the Board adopted some of the smallest rate increases in the past decade, maintaining its commitment to delivering safe water at a reasonable cost.

• Two-Year Budget Prioritizes Innovation, Efficiencies and Stewardship

  The Board of Directors in June adopted a two-year, $1.58 billion budget for fiscal years 2018 and 2019. More than 90 percent of the budget was for water purchases and treatment, along with building and financing infrastructure. Projected cost increases for buying and treating water were largely offset by decreases in the Capital Improvement Program and stored water purchases; the budget projected that no stored water purchases would be necessary following the filling of the expanded San Vicente Reservoir. The budget focused on extending the useful life of facilities through careful asset management; safeguarding physical and cyber assets through improved infrastructure and technology security; developing balanced long-term water-use efficiency regulations; and implementing innovations to advance supply reliability, offset costs, and create more efficient agency operations.

  

• Rate Increases Held in Check for 2018

  By moderating upward pressure on water rates, the Board of Directors in June adopted rate increases for calendar year 2018 that were among the smallest in the past decade. Rate increases of 3.7 percent for both untreated and treated water accounted for higher rates and charges from the Metropolitan Water District of Southern California; a scheduled increase in water deliveries from the Water Authority’s independent and highly reliable Colorado River transfers; slightly higher projected water sales; and slight price increases for water from the Claude “Bud” Lewis Carlsbad Desalination Plant and the Colorado River. To minimize the effect of those factors, the Water Authority restructured its debt portfolio during the 2016-2017 budget cycle to reduce debt service payments by $78.3 million over the life of the refinanced bonds.

  

• New Contract Offers Low-Cost Power

  A new era of low-cost power started in September when the Water Authority executed a contract that will help control energy costs for the region’s water ratepayers. The contract, authorized by the Water Authority Board of Directors in July, allows the Water Authority to purchase power at wholesale rates through the Western Area Power Administration. The Water Authority will initially sell its power from Western – which markets and delivers power from Hoover Dam in Boulder Canyon on the Colorado River – to the California Independent System Operator, which manages most of California’s large-scale power grid. Over time, the Water Authority plans to develop a way for Boulder Canyon power to be delivered directly to agency facilities or the Carlsbad desalination plant, which could reduce power costs by up to $300,000 a year.

  

• Outstanding safety record benefits ratepayers

  The Water Authority ended the year with an excellent safety record that was nearly four times better than the industry average, indicating that the Water Authority had fewer work-related injuries and illnesses than most peer agencies. The Water Authority also maintains a workers’ compensation “experience modifier” that is significantly below the industry standard, and it completed the fiscal year without a single property claim. The figures not only reflect the Water Authority’s commitment to workplace safety and risk management, they translate into savings on insurance premiums – a benefit for ratepayers.

  

• Financial Statements

  Download PDF

  Statements of Revenues, Expenses, and Changes in Net Position

  For the Fiscal Years Ended June 30, 2017 and 2016

  	2017	2016
  Operating Revenues
  Water Sales	579,057,028	524,934,642
  Other revenues	3,727,332	3,240,007
  Total Operating Revenues	582,784,360	528,174,649
  Operating expenses
  Cost of sales	430,560,992	387,123,145
  Operations and maintenance	19,097,518	18,212,388
  Planning	9,040,200	8,651,233
  General and administrative	14,487,899	14,259,469
  Depreciation and amortization	62,014,987	59,493,116
  Total Operating Expenses	535,201,596	487,739,351
  Operating Income	47,582,764	40,435,298
  Nonoperating revenues (expenses)
  Property taxes and in-lieu charges	12,913,313	12,067,223
  Infrastructure access charges	31,144,704	30,434,370
  Investment income	2,237,947	5,985,490
  Other income	11,408,632	13,664,392
  Intergovernmental	11,452,308	12,213,866
  Gain (Loss) on sale/retirement of capital assets	(727,294)	27,580
  Interest expense	(95,533,730)	(85,112,986)
  Debt issuance costs	(352,544)	(6,381,194)
  Other expenses	(17,143,705)	(10,557,021)
  Total nonoperating revenues (expenses)	(44,600,369)	(27,658,280)
  Income before capital contributions	2,982,395	12,777,018
  Capital contributions
  Capacity charges	21,080,540	15,838,800
  Water standby availability charges	11,091,285	11,088,377
  Contributions in aid of capital assets	219,325	791,486
  Total capital contributions	32,391,150	27,718,663
  Changes in net position	35,373,545	40,495,681
  Net position at beginning of year, as restated	1,535,174,603	1,496,572,700
  Net position at end of year	1,570,548,148	1,537,068,381

  Download PDF

  Statements of Net Position

  June 30, 2017 and 2016

  	2017	2016
  Assets
  Current Assets
  Cash and investments	$56,840,335	$75,806,910
  Restricted cash and investments	149,126,977	162,359,461
  Water receivables	102,593,505	99,959,059
  Interest receivable	918,016	1,054,733
  Taxes receivable	1,153,812	1,198,883
  Other receivables	13,731,984	14,835,074
  Inventories	96,983,153	100,630,252
  Prepaid expenses	4,640,248	4,635,729
  Total current assets	425,988,030	460,480,101
  Noncurrent assets
  Cash and investments	135,072,833	125,312,636
  Restricted cash and investments	23,411,934	72,185,172
  Advances to other agencies	650,477	214,436
  Retention receivable	823,942	2,313,364
  Long-term loan receivables	20,000,000	20,000,000
  Net OPEB asset	-	2,264,891
  Capital assets
  Non-Depreciable	637,515,792	627,237,709
  Depreciable	2,853,904,858	2,863,737,737
  Total noncurrent assets	3,671,379,836	3,713,265,945
  Total assets	4,097,367,866	4,173,746,046
  Deferred outflows of resources
  Deferred loss on refunding	72,294,728	83,475,740
  Employer contributions subsequent to measurement date	16,163,814	6,198,142
  OPEB contributions subsequent to measurement date	324,982	-
  Deferred actuarial amounts related to pensions	8,560,959	-
  Deferred actuarial amounts related to OPEB	275,965	-
  Total deferred outflows of resources	97,620,448	89,673,882
  Liabilities
  Current liabilities
  Accounts payable and other liabilities	85,111,259	128,024,234
  Interest payable	20,806,003	19,462,367
  Construction deposits	429,144	434,034
  Short-term liabilities	345,000,000	345,000,000
  Current portion of long-term liabilities	57,293,370	56,430,666
  Total current liabilities	508,639,776	549,351,301
  Noncurrent liabilities
  Long-term liabilities	2,041,933,667	2,109,274,211
  Net pension liability	71,135,027	62,547,589
  Net OPEB liability	170,141	-
  Total noncurrent liabilities	2,113,238,835	2,171,821,800
  Total liabilities	2,621,878,611	2,721,173,101
  Deferred inflows of resources
  Deferred actuarial amounts related to pensions	2,561,555	5,178,446
  Net postion
  Net investment in capital assets	1,138,160,938	1,148,155,974
  Restricted for construction projects	147,352,064	156,718,296
  Restricted for debt service	235,337	158,377
  Unrestricted	284,799,809	232,035,734
  Total net position	$1,570,548,148	$1,537,068,381

  Download PDF

  Cash and Investments

  June 30, 2017 and 2016

  	2017	2016
  As of June 30, 2017 and 2016, restricted cash and investments balances were as follows
  Construction	$2,663,522	$55,448,642
  Debt Service Reserve	22,523,325	22,448,531
  Pay-As-You-Go	147,352,064	156,647,460
  Total	$172,538,911	$234,544,633
  As of June 30, 2017 and 2016, unrestricted cash and investments balances were as follows
  Operating	$55,645,254	$49,282,921
  Designated for Rate Stabilization	135,072,833	125,312,636
  Designated for Equipment Replacement	1,195,081	2,893,890
  Designated for Stored Water	-	23,630,099
  Total	$191,913,168	$201,119,546
  Total Cash Unrestricted	53%	46%