The Santa Clara Valley Water District Board of Directors unanimously passed the $305 million budget for fiscal year 2009/2010 and delivered that with a zero percent groundwater production charge increase. The district budget is $108 million less than in FY2008/2009, largely due to completed capital projects, staff reductions, cutbacks, reprioritizations and consolidations.
“The budget reflects our commitment to address unprecedented financial challenges while continuing to deliver vital services, without increasing groundwater production charges,” said Sig Sanchez, chairman of the board. “We know the recession has had a major impact on the community and we did not want to put an increased financial burden on any of the customers we serve,” he added.
Like all government agencies, the water district is impacted by the worst recession since the 1930’s. However, careful strategic and financial planning has enabled the water district to effectively address the challenges of the recession, tightening credit, rising expenses and declining revenues while still maintaining high service levels and critical infrastructure.
The water district is demonstrating its commitment to fiscal responsibility and accountability through increased efficiencies and cost savings, cutting approximately $24.5 million from planned expenditures for FY 2009-10. Strategies employed in achieving the reductions include, but are not limited to:
- Elimination or delay of lower-priority projects
- Elimination of 29 vacant positions, in addition to 28 positions from FY 2008-09
- Consolidation of services and functions
- Cuts in temporary staff, overtime and non-mandatory training
- Cuts in services and supplies, including operating equipment purchases and travel
- Reduction of 25 fleet vehicles, replacing some with hybrids for fuel efficiency
- Postponing planned computer upgrade schedules
Achieving the cost savings is a major accomplishment considering the fact that water district revenues are declining, while costs are rising significantly. Several examples of shrinking revenues and growing costs are explained below.
Conservation:
Due to the board’s call for mandatory 15% water conservation, staff is expecting a $9.5 million decline in water utility revenue for FY 2009/2010. Also, it will cost the water district about $4.4 million to bring 31,500 acre-feet of “banked” water into the county to supplement supplies.
Flood Protection and Stream Stewardship Program:
This program derives it revenues from a portion of ad valorem property tax; the Clean, Safe Creeks special tax; benefit assessments; proceeds from debt financing; and income from investments. The declining property tax assessment roll may result in a $2.8 million reduction in property tax revenue.
Overall, this budget reflects a commitment to keep costs down during these difficult financial times. The board’s decision to hold groundwater production charges flat is different from the statewide trend. Many agencies across California are adopting double-digit increases. The water district will continue to deliver high quality products and services to the community in the most efficient way possible.