Business & Tech

EMWD Adopts Budget With Rising Costs

Eastern Municipal Water District Board President Joe Kuebler said "maintaining necessary levels of customer service has been a tough balancing act."

Eastern Municipal Water District officials said they face continued higher operational costs in the coming Fiscal Year but hope to not pass that on to customers.

The jump is due to increasing imported water supply rates, volatile energy prices and regulatory cost increases, according to a news release. The rising costs are coupled with less revenue due to lower property taxes--which make up 10 percent of revenue--fewer connections and decreased interest income, EMWD said.

Despite that, the water district approved Wednesday its 2011-2012 Fiscal Year budget of $219 million, a little more than 1 percent higher than last year's.

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“Through sometimes painful improvements to operational efficiencies, we are able to keep the operating budget increase below inflation as measured by the Consumer Price Index of 3.1 percent,” said EMWD Board President Joe Kuebler.

“Maintaining necessary levels of customer service has been a tough balancing act, but we realize the pressures on customers due to the economy," Kuebler said.

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High energy costs and regulatory requirements from both state and federal agencies have put pressure on rates, according to the news release. In addition, importing water from the Sacramento-San Joaquin Delta has been restricted due to regulatory requirements. And Colorado River supplies, although less expensive than from Northern California, have also been greatly reduced, the water district said.

Regulatory and environmental costs associated with the Air Quality Management District, among other entities, are expected to result in increased costs as well. Total environmental and regulatory compliance expenses, for example, are budgeted to rise 8.4 percent, the news release stated.

Revenue will also likely decline from fewer new water and sewer connections. Capping it off, interest rates are expected to remain low, reducing earnings on EMWD's investments, the news release stated.

Steps taken to reduce costs include increased energy efficiency, changing fleet operations, deferring purchases whenever feasible and reducing staffing levels through attrition. Some reserve funds have also helped ward off rate increases to customers, the news release stated.

To avoid buying all higher-priced, pre-treated water directly from Metropolitan Water District, EMWD said it is utilizing resources including groundwater, desalinating brackish water and exercising its option to take imported water and treat it less expensively.


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