MWD Board Offers Financial Incentives to Spur Investment in Water Conservation, Reliability Projects
Offering incentives for local investment in water conservation and reliability projects and programs, Metropolitan Water District's board of directors distributed $36.3 million in unanticipated revenues from higher-than-budgeted water sales in fiscal year 2002-03 to the district's 26 member public agencies.
"In these difficult financial times, our board seized this opportunity to assist member agencies and stimulate investment in necessary and critical supply infrastructure, programs and projects that will help ensure future water reliability," said Metropolitan Chairman Phillip J. Pace.
Metropolitan's board agreed to return the funds in proportion to the percentages of untreated water revenues and other charges paid by the district's member agencies in the 2002-03 fiscal year that ended June 30. Agencies may choose whether to have the rebate credited to future MWD water bills or used to help fund local supply projects.
This distribution was made possible from the third highest water sales year in Metropolitan's 75-year history. Metropolitan's total sales in fiscal 2002-03 were 2.34 million acre-feet, leaving the MWD board with $36.3 million more than it planned to reserve. (An acre-foot of water is nearly 326,000 gallons, about the amount used by two typical Southland families in and around their homes in a year.)
"Although 2002 was the driest year in urban Southern California's recorded history and prompted higher demands, water sales did not reach the levels that we saw in 1990 at the height of the last major drought in 1991 because of the investments the region has made in water conservation, recycling and other water management projects that diversify the Southland's supplies," said Metropolitan Chief Executive Officer Ronald R. Gastelum.
"With the funds provided by our board, we're looking to prompt additional local investment that continues to expand the region's supply portfolio," Gastelum said.
The action marks the third time Metropolitan's board has provided rebates to its member agencies. In 1997, the board distributed $70 million in unanticipated revenues and actual cost savings, and another $33 million in 2001.
In 2000, Metropolitan's board used about $75 million in cost savings and revenues from higher-than-anticipated water sales to pay down the district's future debt service.
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