Metropolitan Board Approves 2005-06 Budget

LOS ANGELES--(BUSINESS WIRE)--June 14, 2005--Expanding water conservation and recycling programs as well as improvements in the vast water delivery system serving Southern California are fundamental elements of a $1.69 billion spending plan approved today by Metropolitan Water District's Board of Directors.

"This budget reflects our commitment to improve the reliability and quality of the Southland's water supplies and delivery capabilities to ensure that the region's water needs are met," said Metropolitan board Chairman Wes Bannister.

The 2005-06 spending plan is $86.4 million--or 5 percent--higher than fiscal 2004-05 primarily because of increases in Metropolitan's capital improvement budget. From July 1, 2005 to June 30, 2006, the capital budget is $500.6 million, covering more than 30 major construction contracts and 340 projects.

Metropolitan's key system improvements will include the construction of the Inland Feeder and two other new major imported water lines; expansion of a water treatment plant serving southwest Riverside and San Diego counties; and the addition of ozone treatment facilities at two district filtration plants, which are needed to meet increasingly rigorous water quality regulations.

Reflecting Metropolitan's commitment to ensuring supply reliability, the budget includes $38.9 million in financial assistance to MWD's member public agencies for conservation, recycling and groundwater clean-up projects. In addition, Metropolitan will continue its public outreach efforts to shift the region's water-saving focus from inside to outside the home, where up to 70 percent of water is used.

The 2005-06 budget anticipates sales of 1.9 million acre-feet of water during the fiscal year, or about 300,000 acre-feet less than 2004-05 because of this year's near-record rainfall in Southern California. An acre-foot of water is nearly 326,000 gallons, enough to meet the needs of two typical Southland families in and around their homes in a year.

To make up for decreased water sales, Metropolitan plans to use about $135 million from the district's rate stabilization fund to meet expenditures while avoiding additional rate impacts.

The district's operations and maintenance costs will increase to $289.9 million, up $7.4 million or 2.6 percent from the previous fiscal year. The increase, which is lower than the rate of inflation over the past year, reflects an enhanced focus on system maintenance to ensure reliability; higher water treatment costs associated with more stringent water quality regulations; and increased labor costs.

For more information on Metropolitan, visit the district's Web site at "mwdh2o.com."

The Metropolitan Water District of Southern California is a cooperative of 26 cities and water agencies serving 18 million people in six counties. The district imports water from the Colorado River and Northern California to supplement local supplies, and helps its members to develop increased water conservation, recycling, storage and other water-management programs.