Financial Status of BWD Promises Smooth Roll-Out of GSP
Last updated 8/24/2018 at 10:48am
There are perhaps only a handful of Borregans who read the details of Borrego Water District financial reports, and/or GSP Advisory Committee meetings, which are all posted on the BWD website.
But it is clear that continued progress on development of our GSP goes hand-in-hand with sound fiscal management of, and planning for, our water district plans and programs going forward.
According to the latest data and information, the BWD is now operating in the black. Up until several years ago, the BWD’s credit rating was at rock-bottom. It could not borrow money for needed infrastructure projects from any public or private source (at reasonable cost) to help stabilize ratepayer costs over longer time periods. It relied instead on “cash-on-hand,” which was paltry at best and frequently non-existent. That has all changed, due in large part to a re-focus on long-term, debt-based financing. Yes, water and sewer rates have increased (see Wendy Quinn’s fine series on that subject in the Borrego Sun), but the increases place the BWD rate structure in line with that of other communities in the region.
The BWD financial summary for FY2017-18 states, “Reserves are being increased from $4 million to $5.3 million to cover debt funding, a rate stabilization reserve fund, and capital replacement reserves.” That one sentence, out of hundreds of pages and scores of financial documents, covers much of the reason for BWD’s financial success: It represents thousands of man-hours spent over the past few years by BWD directors, management and staff, and consultants who reviewed, questioned, and otherwise provided valuable input on individual action items dictated by new BWD fiscal policies and procedures going forward.
The main categories of financial concern include: 1) capital improvement projects, 2) financial consequences for rate-payers in our community; 3) financial/legal obligations to debt holders; 4) spending trends; 5) bond and grant funding opportunities, and 6) investment options. BWD is now in position to address critical issues as they arise within the above categories, and to proceed apace with the GSP process. The GSP costs to date have run about $6 million.
BWD General Manager Geoff Poole says, “Although the GSP is being funded by the County, BWD is fortunate the financial issues had been resolved and funds are available to provide outside resources to help BWD evaluate and address key issues to support the GSP process. Examples of these expenses include legal and engineering consultants.”
There are also possible but yet unknown expenses to be incurred. “The ($6 million) does not include GSP implementation or any future legal challenges involving the Plan, if any,” Poole adds. “It is still our goal to avoid litigation in the future.”
Full story in the Aug. 23 issue of the Borrego Sun.