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Utilities Dept. Digging Out From Deficit

After facing $8 million of red ink in June, the agency is on track to be profitable by late 2013.

After staring at an $8-million deficit this summer, the San Juan Capistrano Utilities Department is slowly turning things around, officials said Tuesday.

First quarter revenue for the fiscal year that began July 1 met -- and in some cases surpassed -- projections.

With themore than it did a year ago, and revenue outpacing expenses, city finance officer Cindy Russell said the department is "on track."

Utilities Commissioner Ray Miller called the first-quarter financial report "the first positive news we've had in three years."

In June, commissioners learned their water budgets were $8.2 million in the red. So Russell mapped out a budget based on very conservative projections, a tack that seems to be working to the department's advantage.

. That scenario is based on the city's groundwater recovery plant pumping 4,725 acre feet a year.

Production so far this fiscal year is 1,413 acre feet, according to a report released Tuesday by the city manager's office.

Through Sept. 30, the groundwater recovery plant fund raked in $1.68 million from commodity usage charges and grants from the Metropolitan Water District of Southern California. Just under $4.1 million was collected in its water enterprise fund.

Expenses in each account totaled $3.1 million and $786,502, respectively.

Water enterprise operations costs, including those of the groundwater recovery plant and the cost of imported water, will be about $12.6 million this year (not including debt payments). Sewer enterprise costs run about $3 million.  Enterprise operational costs are budgeted at $15.6 million.

Administrative costs account for nearly 9 percent of the total Utilities Department budget, or $1.4 million. Those costs will be reviewed by the Utilities Commission at its next meeting.

Jim Reardon November 16, 2011 at 06:51 AM
Gosh, Jenna. This certain seems like good news. But let's see if we can decode it. Breakeven is "late 2013" -- two years from now. Assuming the GWRP sustains pumping at its present high rate between now and then. That is clear enough. But $1.68 million from "commodity usage charges" and "grants" is a mouthful. The usage charges are the water bills paid by all of us. In other word, the value of water sold at our exorbitant rates. The "grants" are subsidies being paid to the City by MWD for not purchasing their water. Your $4.1 million figure would appear to be a breathless dangling figure -- the value of all water sold by the City through 9/30? The expenses in "each account"? Which accounts? With respect to what? Can you please help us to understand these figures? Finally, how can we make any sense of a "cost" figure of $12.6 million for the year when it does not include the payments on debt? Isn't debt service a part of the cost to operate the water system? If it isn't, then why is it included in our water rates? Finally, is that $1.4 million in administrative costs included in the $12.6 million, or not? If it is $12.6 to operate, plus debt service, plus $1.4 million in administrative cost, then adding it up on your fingers, you can understand why the City has a deficit in Utilities! Next, we will hear that they need to raise our rates again.
SJCNative November 16, 2011 at 09:17 PM
Do you mean to tell me that this is not going to break even for another two years? How long has this plant been open? Is this in relation to the huge celebration for the Chiquita Reservoir I read about here but now the City has sold a portion of it after planning it for 20 years? Is this the same Utility Deparment that built this plant but never thought about emergency electricity for the pumps? What kind of yahoos are running this place? No wonder are rates keep going up.

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