The board of directors of the San Diego County Water Authority approved a $479.9 million budget that will allow the Water Authority to continue providing a safe, reliable water supply to the region. Revenues and other funding sources for the fiscal year are expected at $490.8 million. The Water Authority's fiscal year begins July 1.
The Authority's expenditures are broken into five primary categories: water purchases, $227.4 million; debt service, $72.1 million; operating budget, $27.5 million; capital budget, $150.3 million; and equipment replacement, $2.64 million.
"The Water Authority considers water reliability and financial management to be top priorities," says Maureen Stapleton, Water Authority general manager. "This fiscally conservative budget embodies the strategies of the agency's direction and strives to fulfill the Authority's mission."
The largest component of the Authority's operating expenditures is in water purchases. The budget of $227.4 million for water purchases is based on a projected demand of 612,000 acre feet of water for the region. One acre-foot of water is approximately 326,000 gallons, enough to supply the needs of two typical households in a year.
When compared to the Authority's 2001-2002 adopted budget, water purchases are figured to increase 2.1 percent in terms of dollar value and 3 percent in terms of acre-feet. Water purchases account for 47.4 percent of the total budget.
The capital budget of $150.3 million reflects this year's funding of the Capital Improvement Program, a $1.214 billion program to enhance and increase the operational flexibility of the Water Authority's water delivery system. The budget is anticipated to cover the costs of planning, design, construction and implementation of 55 projects planned for this fiscal year. This represents a 14.5 percent increase from the prior year's budget. The CIP is contained under a separate cover through fiscal year 2014-2015 and is not included as an operational cost.
The second largest ongoing operating cost for the Authority is debt service. At 15 percent of the budget, the $72.1 million budgeted for the new fiscal year includes payment of principal and interest on the debt the Authority incurred to finance the Capital Improvement Program. This represents a 33.5 percent increase over fiscal year 2001-2002. It is anticipated that this cost wills likely increase over the next five years as the Capital Improvement Program continues to be executed and funded.
The Authority's operating budget includes the combined total of all departments that maintain the Authority's core mission programs. At $27.5 million, this represents a 4.7 percent increase over fiscal year 2001-2002. The increase is attributable to Capital Improvement Program costs transferred to operations as per audit recommendations. Additionally, seven full-time positions have been added to help achieve the agency's strategic goals.
The equipment replacement fund makes up less than one percent of the Authority's total budget. The $2.64 million pays for the annual depreciation expense for equipment and vehicles. It increased $790,000, or 42.7 percent from the prior year.
Revenues and other funding sources for the 2002-2003 fiscal year are projected at $490.8 million from a variety of sources. The largest source of revenues -- at 58.5 percent of the total - are projected water sales of treated and untreated water. This source of revenue is directed back into operational and maintenance costs for the CIP. The Authority estimates that it will sell approximately 612,000 acre-feet of water to wholesale customers during the fiscal year, generating water sales receipts of $287.2 million.
A new rate structure will be implemented, effective January 1, 2003, to fairly allocate the costs of providing water and other services to the Authority's member agencies. The new water rate structure has subdivided the former commodity rates per acre-feet into fixed charges for customer service and storage, and unit-based costs for transportation. The supply portion of the rate structure includes the rate and charges for water purchased by the Authority.
The San Diego County Water Authority is a public agency serving the San Diego region as a wholesale supplier of water from Northern California and the Colorado River. The Water Authority works through its 23 member agencies to provide a safe, reliable water supply to almost three million county residents.
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