Prudent financial management is a hallmark of the Water Authority’s long-term strategy to ensure a safe and reliable water supply both today and for decades to come. That approach paid off in tangible ways during the fiscal year when the Water Authority received its highest credit rating ever and set water rates near the low end of projections.

The Water Authority also planned a withdrawal of $20 million from the Rate Stabilization Fund in Fiscal Year 2017 to maintain smooth water rate adjustments during a tumultuous period of drought response. And strategic planning efforts didn’t stop there: The Water Authority’s Board adopted a Long-Range Financing Plan to ensure the agency’s stability for decades to come.

Estimated CY 2017 Wholesale Costs per Household

  • Credit Rating Reaches Historic High

    For the first time in its 72-year history, the Water Authority in May received a AAA credit rating from S&P Global Ratings, reducing the cost of financing vital past and future water reliability projects. The upgrade underscored the Water Authority’s commitment to sterling credit and enhanced already strong ratings from the major credit agencies. It also saved an estimated $200,000 during a bond refunding in June 2016. When issuing its AAA rating, S&P recognized the quality of the Water Authority’s financial planning and policies set by the Board, as well as the agency’s commitment to maintaining its financial position with timely adjustments to rates and charges.

  • Bond Refundings Save Millions

    The Water Authority has a long history of refunding bonds to save ratepayer money, including two such actions during the fiscal year that reduced long-term borrowing costs by nearly $80 million.

    $63.2 Million

    Savings from refunding $340 million in fixed-rate bonds issued in 2008 and 2010.* The refunding sale was in June 2016.

    $15.1 million

    Savings from refunding $195 million in fixed-rate bonds issued in 2008 and 2010.** The refunding sale was in September 2015.

    *On a present-value basis over the life of the refinanced bonds

    **On a net present-value basis through 2029

  • Aggressive Efforts Control Rates

    Water rates for 2017 were set in June – a 6.4 percent increase for untreated water and 5.9 percent increase for treated water. The increases were near the low end of projections due to careful management, a planned withdrawal from the Rate Stabilization Fund, and the Water Authority’s successful efforts to stop the Metropolitan Water District of Southern California from adopting a new fixed-rate scheme that would have shifted an inappropriate share of costs to the San Diego region. The rising cost of water resulted from continued rate increases by MWD, higher costs for drought-proof water supplies from the Carlsbad desalination plant, and reduced water sales as a result of state emergency regulations.

    Chart showing the History of Rate Increases
  • Financial Plan Focuses on the Future

    The Board of Directors adopted the 2015 Long-Range Financing Plan in January, capping a six-month effort to support the agency’s long-term financial stability. The document highlights the Water Authority’s transition to an agency focused on operations and asset management, instead of construction. It focuses on key financial policies, projected capital expenditures, debt issuances, financial performance metrics, and financial risks facing the Water Authority.

    Board in Action
  • Financial Statements

    Statements of Revenues, Expenses, and Changes in Net Position

    For the Fiscal Years Ended June 30, 2016 and 2015

    2016 2015
    Operating Revenues
    Water Sales 524,934,642 584,172,839
    Other revenues 3,240,007 4,567,285
    Total Operating Revenues 528,174,649 588,740,124
    Operating expenses
    Cost of sales 387,123,145 411,037,897
    Operations and maintenance 18,212,388 22,365,531
    Planning 8,651,233 8,416,134
    General and administrative 14,259,469 14,115,738
    Depreciation and amortization 59,493,116 57,751,284
    Total Operating Expenses 487,739,351 513,686,584
    Operating Income 40,435,298 75,053,540
    Nonoperating revenues (expenses)
    Property taxes and in-lieu charges 12,067,223 11,475,607
    Infrastructure access charges 30,434,370 29,895,726
    Investment income 5,985,490 2,905,952
    Other income 13,664,392 7,786,392
    Intergovernmental 12,213,866 11,148,139
    Gain (Loss) on sale/retirement of capital assets 27,580 32,557
    Interest expense (85,112,986) (81,792,704)
    Debt issuance costs (6,381,194) (16,840)
    Other expenses (10,557,021) (10,909,171)
    Total nonoperating revenues (expenses) (27,658,280) (29,474,342)
    Income before capital contributions 12,777,018 45,579,198
    Capital contributions
    Capacity charges 15,838,800 22,559,844
    Water standby availability charges 11,088,377 11,106,743
    Contributions in aid of capital assets 791,486 6,897,528
    Total capital contributions 27,718,663 40,564,115
    Changes in net position 40,495,681 86,143,313
    Net position at beginning of year, as restated 1,496,572,700 1,410,429,387
    Net position at end of year 1,537,068,381 1,496,572,700

    Statements of Net Position

    June 30, 2016 and 2015

    2016 2015
    Assets
    Current Assets
    Cash and investments (Note 2) $75,806,910 $111,130,235
    Restricted cash and investments (Note 2) 162,359,461 170,873,233
    Water receivables 99,959,059 90,113,890
    Interest receivable 1,054,733 1,222,552
    Taxes receivable 1,198,883 1,159,303
    Other receivables 14,835,074 15,697,438
    Inventories (Note 3) 100,630,252

    52,428,622
    Prepaid expenses (Note 4) 4,635,729 4,636,815
    Total current assets 460,480,101 447,262,088
    Noncurrent assets
    Cash and investments (Note 2) 125,312,636 115,405,373
    Restricted cash and investments (Note 2) 72,185,172 70,039,820
    Advances to other agencies 214,436 278,977
    Retention receivable 2,313,364 1,724,761
    Long-term loan receivables (Note 5) 20,000,000 20,000,000
    Net OPEB asset (Note 12) 2,264,891 2,157,000
    Capital assets (Note 6)
    Non-Depreciable 627,237,709 640,109,515
    Depreciable 2,863,737,737 2,617,179,700
    Total noncurrent assets 3,713,265,945 3,466,895,146
    Total assets 4,173,746,046 3,914,157,234
    Deferred outflows of resources
    Deferred loss on refunding 83,475,740 52,891,210
    Employer contributions subsequent to measurement date 6,198,142 4,142,513
    Total deferred outflows of resources 89,673,882 57,033,723
    Liabilities
    Current liabilities
    Accounts payable and other liabilities 128,024,234 75,697,190
    Interest payable 19,462,367 18,448,486
    Construction deposits 434,034 451,123
    Short-term liabilities (Note 9) 345,000,000 360,000,000
    Current portion of long-term liabilities (Note 10) 56,430,666 39,205,400
    Total current liabilities 549,351,301 493,802,199
    Noncurrent liabilities
    Long-term liabilities (Note 10) 2,109,274,211 1,913,161,795
    Net pension liability (Note 11) 62,547,589 57,843,537
    Total noncurrent liabilities 2,171,821,800 1,971,005,332
    Total liabilities 2,721,173,101 2,464,807,531
    Deferred inflows of resources
    Deferred actuarial amounts related to pensions 5,178,446 9,810,726
    Net postion
    Net investment in capital assets 1,148,155,974 1,102,128,289
    Restricted for construction projects 156,718,296 143,366,311
    Restricted for debt service 158,377 113,537
    Unrestricted 232,035,734 250,964,563
    Total net position $1,537,068,381 $1,496,572,700

    Cash and Investments

    June 30, 2016 and 2015

    2016 2015
    As of June 30, 2016 and 2015, restricted cash and investments balances were as follows
    Construction $55,448,642 $85,370,403
    Debt Service Reserve 22,448,531 12,240,775
    Pay-As-You-Go 156,647,460 143,301,875
    Total $234,544,633 $240,913,053
    As of June 30, 2016 and 2015, unrestricted cash and investments balances were as follows
    Operating $49,282,921 $8,150,206
    Designated for Rate Stabilization 125,312,636 115,405,373
    Designated for Equipment Replacement 2,893,890 5,116,513
    Designated for Stored Water 23,630,099 97,863,516
    Total $201,119,546 $226,535,608
    Total Cash Unrestricted 46.2% 48.5%

Water Authority Credit Ratings

S&P: AAA
Moody’s: Aa2
Fitch: AA+