Budget for fiscal years 2016 & 2017 set at $1.5 billion

Careful budgeting and planning helped keep budget increases to a minimum despite numerous changing and growing demands. The Board of Directors in June adopted a $1.5 billion budget [1] for fiscal years 2016 and 2017, up 2 percent from the prior two-year budget due largely to higher costs for the purchase and treatment of water. Water costs were projected to rise by 12 percent in fiscal years 2016 and 2017, partly because of increases in the cost of supplies from MWD and the purchase of highly reliable, drought-proof water from the Carlsbad Desalination Plant.

Expenses were held in check by lower spending on the Water Authority’s Capital Improvement Program, which decreased by 34 percent as major projects neared or reached completion. The lifetime cost of the CIP projects was reduced to $2.8 billion. In addition, the Water Authority continued to streamline the organization through the strategic reductions and reclassification of staff positions following a series of major cost-cutting moves in prior budgets.

The 2016 and 2017 budget for operating departments decreased 5 percent from the previous budget due to a combination of efforts to reduce expenses. Operating expenses comprise only 6 percent of the Water Authority’s $1.5 billion two-year budget.

In fiscal years 2016 and 2017, the Water Authority’s budget anticipated several major projects and initiatives. They included:

• Drought response – Helping the region meet state-mandated water-use reduction targets with outreach and conservation programs to assist customers and help member agencies avoid financial penalties by the state
• Carlsbad Desalination Project – Preparing to receive 50 million gallons of water a day from the plant for regional distribution
• Regulatory policy – Supporting a new program to address regulatory policy and planning, along with increased activities necessary to comply with various demands by regulatory agencies
• Dry-year modeling – Developing a model to assist in the prudent use of stored water reserves by accounting for variables such as weather, economic factors and evaporation
• Asset management – Maintaining the reliability of the Water Authority’s estimated $3.3 billion infrastructure
• Hydroelectric energy – Investigating the potential of new energy sources, such as a pumped storage project at San Vicente Reservoir
• Water supply planning – Forecasting changes in long-term water use by updating the Urban Water Management Plan