5-Year Financial Projection

In October 2015 the District awarded a contract to Raftelis Financial Consultants for the development of a 5-year financial forecast.  The forecast was presented to the Board of Directors in June 2016.  Also in June, the District acted in public session to amend its contract with Raftelis for the development of a water rate study.  On August 22, 2016 the Central Basin Board of Directors voted affirmatively to approve the first increase in water surcharge rates, recycled water rates, and meter service fees in five years. 

Water surcharges, recycled sales and meter service fees will be raised by 16.5% effective January 1, 2017.  On July 1, 2017, these same rates and fees will be raised again by 8%.  Rate increases of this magnitude are not, of course, the norm for wholesale utilities.  However, the District’s five-year financial forecast and the water rate study displayed conclusively that such adjustments were necessary to level the playing field on the District’s cost recovery after five years without raising rates. 

The graphic displays an improved performance projection for the District’s debt coverage ratio (DCR) over the next five years.  The green line is the DCR estimation.  The solid red line is the requirement performance ratio of 115%.  See “Debt Coverage Ratio” tab for more background on the DCR and its importance to the District’s financial functioning.