Budget Update and Modest Rate Increase

2015 required careful attention to keep the budget balanced amidst the financial impacts of a record drought, rising operational costs, and ongoing system improvements and maintenance – updated

North City Water District reviews our financial status during the Fall season of each year and develops an annual budget for the upcoming year. Copies of detailed budget presentations are available here on our website; two Budget Overview Charts with explanations are presented below:

2016 Budget Document for PDF 2.xlsx

Revenue Chart:

Single Family Service Revenue
$4,585,271 (65% of our total revenue)
The bulk of the District’s revenue.

MFR Service Revenue
$909,894 (13% of our total revenue)
Multi-Family revenue (MFR) from duplexes, apartments and condominiums in our service area.

Non-SF Ser Rev
$701,074 (10% of our total revenue)
Non Single-Family Service Revenue from businesses, schools, and other government institutions.

Other Rev
$563,826 (8% of our total revenue)
Other Revenue includes late fees, antenna rentals, surplus sales.  It offsets the need for higher service rate increases.

IRR Ser Rev
$131,519 (2% of our total revenue)
Irrigation Revenue (IRR) from customers with separate irrigation meters.

FL Ser Rev
$83,072 (1% of our total revenue)
Revenue from separate Fire Line (FL) meters that customers pay to have available in the event of a fire.

$107,048 (1% of our total revenue)
Reserve funds cover expenses during slow revenue times.

2016 Budget Document for PDF 2.xlsx

Costs Chart:

Employee Costs
$1,621,625 (23% of our total costs)
Employee salaries and benefits.

Capital Transfers
$1,551,221 (22% of our total costs)
Rate funded contribution to capital are primarily in lieu of depreciation expense.  Current capital projects include the North City Pump Station, NE 178th Street Project, new water sample stations, and rebuilding/replacing Pressure Release Valves (PRVs).

Water and Power
$1,468,815 (21% of our total costs)
This is what we pay to Seattle Public Utilities as the source of our water, as well as the electricity required to run our facilities.

Debt Service
$866,145 (12% of our total costs)
This is the cost of repaying bonds and drinking water state revolving fund loans that provide extremely low financing for system improvements.

Taxes and Franchise Fees
$709,500 (10% of our total costs)
These are the dollars we pay to the Cities of Shoreline and Lake Forest Park for providing water service to a portion of their residents.

Admin, Pub Out, CS
$549,099 (8% of our total costs)
These are the fees we pay to conduct administrative functions, including legal, insurance, and billing services.

$220,300 (3% of our total costs)
Operations and Maintenance (O&M) costs include supplies outside of engineering services, vehicle maintenance, hydrant painting, and telemetry expenses (we’re almost 50% complete repainting hydrants!)

Vehicle Repl
$95,000 (1% of our total revenue)
Contributions funded by rates are made to a separate account that is used to fund the purchase of vehicles.

Balancing the 2016 Budget

One of the unintended consequences of conserving water is the impact it can have on District finances. Given that 91% of the District’s revenue comes from water use, decreased consumption can create a revenue shortfall. The District closely monitored this situation throughout this past summer to identify what adjustments might be necessary to avoid overspending—particularly in light of the ever-rising costs of operations and system maintenance.

We determined that the most logical way to keep the budget balanced was to modify the timing of upcoming capital expenditures: we will postpone the replacement of our old Maintenance Facility until the new North City Pump Station is complete.

As we committed to several years ago, we would rather make small, annual, incremental rate increases rather than wait as long as possible to make large rate increases, in order to make your water bills as predictable as possible. In light of all of these factors in 2015, our adopted 2016 budget will include a 3% rate increase.

If you have any questions about our budget, please give us a call at 206.362.8100.