Water Authority board approves $1.338 billion budget for fiscal years 2006 and 2007

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Water Authority board approves $1.338 billion budget for fiscal years 2006 and 2007
Water treatment plant and major tunnel and pipeline among key funded projects
June 23, 2005

The San Diego County Water Authority board of directors today approved a $1.338 billion budget for fiscal years 2006 and 2007 that funds the agency’s operations and capital improvements. The Water Authority moved to a multiyear budgeting process for the 2004 and 2005 fiscal years to provide enhanced fiscal management of its many multiyear projects and long-range planning.

“The next two years will see a significant increase in water projects as we aggressively move towards diversifying our water resources and securing water supply reliability,” said Water Authority Board Chairman Jim Bond. “With the approval of this multiyear budget, the Water Authority’s begins full implementation of its plans to develop seawater desalination, build our first water treatment plant, complete the relining of the All-American and Coachella canals and move into the next phase of the Emergency Storage Project.”

The Water Authority’s first water treatment plant will produce 100-million gallons of drinking water per day beginning in 2008. The plant will help address the growing demand for additional treated water supplies in the region, especially during hot summer days.

In April, the board approved an agreement with the city of Carlsbad to develop a seawater desalination facility at the Encina Power Station. The development of regional seawater desalination facilities will provide a new, highly-reliable source of water for all of San Diego County.

The building of the San Vicente Pipeline project, the next phase of the Emergency Storage Project, will connect the San Vicente reservoir to the region’s water distribution system. The pipeline, with its accompanying pump stations, will provide access to water set aside in the reservoir for emergencies, such as a drought or major earthquake, that could cut off the county's supply of imported water.

The Coachella and All-American Canal Lining projects, when completed will provide an additional 77,000 acre-feet of water annually to San Diego County for the next 110 years.

Capital improvements represent the largest budget component. An appropriation of $570.5 million or 42.6 percent of the budget will fund 57 Capital Improvement Program projects.

In addition to capital improvement and operating funds, the budget includes expenditures for water purchases, debt service, equipment replacement and Quantification Settlement Agreement obligations.

The Water Authority's approved budget expenditures are:

Capital improvement program budget
$570.5 million
42.6 percent
Water purchases
$519.0 million
38.8 percent
Debt service
$178.3 million
13.3 percent
Operating budget
$ 66.2 million
4.9 percent
Equipment Replacement
$ 3.4 million
0.3 percent
QSA Environmental
$ 0.7 million
<0.1 percent

Total
$1.338 billion
100 percent

Estimated revenue and other funding sources for the next two fiscal years is $1.338 billion.

Water purchases represent the second largest component of the budget at 38.8 percent. Based on projected annual purchases of 585,000 and 600,000 acre-feet of water for the region, the Water Authority budgeted $519 million for water purchases for the two fiscal years. One acre-foot of water is approximately 326,000 gallons, enough to supply the needs of two typical households for a year.

The Water Authority's operating budget includes the combined budgets of all departments that maintain the Water Authority's core mission programs. At $66.2 million, it represents 4.9 percent of the overall budget and a 3.1 percent increase over the prior two fiscal years.

Debt service, which includes commercial paper and long-term debt service, represents 13.3 percent of the budget or $178.3 million over the next two fiscal years.

The equipment replacement fund of $3.4 million and a $700,000 allocation for the Quantification Settlement Agreement environmental and other commitments complete the $1.338 billion budget.

The Water Authority's approved budget covers the period from July 1, 2005 through June 30, 2007.
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