North City Water District recently underwent a two month process to develop our budget for providing water service during 2019 and 2020. On December 18, 2018, our Board of Commissioners adopted the 2019-2020 Budget, which includes a rate increase for 2019.
The newly adopted 2019-2010 Budget can be viewed here >
Part 1 of our budget development process entailed a comprehensive review of operating costs from 2017 and 2018, which was presented at a Board meeting on November 20; a copy of this presentation can be found here >
Feedback gathered from Commissioners and staff during this November meeting was incorporated, after which we began Part 2 of our budget development process: a thorough review of the 2019-2030 capital budget. A second Board meeting was held to present these findings on December 4; a copy of this presentation can be found here >
Projected Costs of Capital / Infrastructure Improvements
Overall, North City Water District expects to spend around $45-50 million in capital / infrastructure improvements over the next 15 year period.
As shown on the above graphic (Slide 6 of the December 4 presentation; click to enlarge), revenue to cover these capital expenses is projected to come from the following sources:
– 50% from our capital programs
– 30-40% bond debt
– 10% from connection fees
Capital costs will be offset somewhat when we sell our old maintenance facility, shortly after construction is complete on our new maintenance facility in 2019.
Projected Rate Increases
In 2018, North City Water District was able to forego a rate increase, thanks to higher-than-expected revenues, resulting from lower than expected water usage in 2017 and 2018, along with two hot, dry summers.
The above graphic (Slide 8 of the December 4 presentation; click to enlarge) depicts our water purchase and usage: water purchases from Seattle Public Utility regional supplies are shown with a dashed line; water sales are shown with the solid line. The greyed area on the graphs depict our original forecast for water usage from our prior budgets.
In 2019 and 2020, we are projecting a 4% rate increase each year, in order to meet operating requirements for the next two years, as shown in the below graphic (Slide 9 of the December 4 presentation; click to enlarge). As soon as our Water System Plan is completed in early 2019, we will be able to perform a more detailed Cost of Service study, which may cause a slight adjustment to the 2020 rate projection.
Even though our forecasted needs are almost exactly the same as they were two years ago, we expect a significant increase in the cost of our wholesale water from Seattle Public Utilities, which will address the recently identified capital needs in the wholesale system.