Budget & Finance

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Budget & Finance

Metropolitan maintains an annual operating budget of nearly $2 billion, ensuring that our vast water system runs smoothly and that we will meet Southern California’s water demands for generations to come.

We make forward-thinking investments in supplies, storage, conservation, and treatment, and we responsibly maintain our existing infrastructure. Together, these strategically important programs provide Metropolitan with the operational flexibility to store water when it is available and deliver it to our communities in dry years. Our water rates, which recover the cost of providing reliable water service to our member agencies, are established in an open and transparent public process as part of the biennial budget.

Our Adopted Biennial Budget

At its April 9 monthly meeting, our board approved the proposed biennial budget for 2024/25, which strategically balances necessary rate increases with cost containment measures, including reducing departmental expenditures.

The budget and rates approved evolved through months of transparent deliberations, including input from member agencies, interested parties and the public. Metropolitan’s board began discussing the budget in February and has held four public workshops to consider Metropolitan’s expenditures and revenues.

Read our press release, April 9, 2024.

View the board letter and other supporting documents for the adopted FYs 2024/25 - 2025/26 budget and CYs 2025 and 2026 rates and charges here.

Our adopted biennial budget for fiscal years 2022/23 and 2023/24 as well as the adopted rates and charges for the calendar years 2023 and 2024 documents can be reviewed here.

Investing in Southern California

The adopted budget for fiscal years 2022/23 and 2023/24 appropriates $4.4 billion, including $600 million in capital investments to address aging infrastructure, respond to drought, and comply with regulatory requirements.

Among some of Metropolitan’s largest strategic investments in recent years:

Pure Water Southern California

Pure Water Southern California, formerly known as Regional Recycled Water Program, will take cleaned wastewater and further purify it to produce a new, drought-proof source of high-quality water for Southern California.

Conservation & Local Resources

Metropolitan has invested $1.5 billion in water conservation, recycled water and groundwater recovery since 1990.

Storage

Metropolitan has developed more than 5.5 million acre-feet of storage capacity – a 13 times increase in capacity since 1990.

Succession Planning

Metropolitan has an ongoing, dynamic effort to ensure the strongest possible future for Metropolitan by tapping the best talent, training employees, and developing leaders for the future.

Budget, Rates & Charges

For Metropolitan, a stable financial strategy is essential to managing imported water supplies and its local programs to provide its wholesale water service to its 26 member agencies, that serve 19 million people and support half of the state's economy. Metropolitan adopts two-year budgets. Our budget, rates, and charges reflect a careful balance between generating revenues in a fair manner to invest in the region's water future and managing rates through steady, modest increases that reflect the cost of service.

Adopted FYs 2024/25 – 2025/26 Budget and CYs 2025 and 2026 Rates and Charges

Adopted FY 2022/23 and 2023/24 Budget and CY 2023-2024 Rates and Charges

Adopted Tax Limit Determination FYs 2022/23 - 2025/26

Biennial Budget - FY 2024/25 and 2025/26, including Ten-Year Financial Forecast and Resolutions

Biennial Budget - FY 2022/23 and 2023/24, including Ten-Year Financial Forecast and Resolutions

Cost of Service Report - Fiscal Years 2024/25 and 2025/26

Cost of Service Report - Fiscal Years 2022/23 and 2023/24

Adopted FY 2020/21 and 2021/22 Budget and CY 2021 and 2022 Rates and Charges

Metropolitan sets its water rates every other year to recover the cost of providing water service to its customers in an open and transparent public process, concurrent with the biennial budget review process. Our principal revenue source is water sales, which includes all revenues received by Metropolitan from charges for the sale and availability of water, including our water rates, readiness-to-serve charges, a capacity charge and wheeling/exchange transactions. The current pricing system, which itemizes various costs associated with water delivery, was established in 2003.

The following table summarizes rate components for treated and untreated water:

Effective January 1^st	2024	2025	2026
Supply Rate*		$290	$313
Tier 1 Supply Rate($/AF)*	$332	-	-
Tier 2 Supply Rate($/AF)*	$531	-	-
System Access Rate ($/AF)	$389	$463	$492
System Power Rate ($/AF)	$182	$159	$179
Full Service Untreated Volumetric Cost ($/AF)*		$912	$984
Tier 1	$903	-	-
Tier 2	$1,102	-	-
Treatment Surcharge ($/AF)	$353	$483	$544
Full Service Treated Volumetric Cost ($/AF)*		$1,395	$1,528
Tier 1	$1,256	-	-
Tier 2	$1,455	-	-
Readiness-to-Serve Charge ($M)	$167	$181	$188
Capacity Charge ($/cfs)	$11,200	$13,000	$14,500

*On Nov. 14, 2023, at the FAIRP meeting, staff presented to the Board the status of the 2014 Purchase Order, which will end on Dec. 31, 2024. The adopted FY 2024/25 and FY 2025/26 Biennial Budget does not assume that the purchase order contracts will be renewed. As a result, the Tier 2 rate is not included in the proposed rates and charges for CYs 2025 and 2026; there is only a single supply rate. Metropolitan will revisit the purchase order commitments and similar structures as needed during the business model review through the CAMP4W process.

Definitions

Tier 1 Supply Rate – recovers the cost of developing and maintaining a reliable water supply
Tier 2 Supply Rate – set at Metropolitan's cost of purchasing water transfers north of the Delta, this rate tier encourages the maintenance of existing local supplies and the development of cost-effective local supply resources and conservation
System Access Rate – recovers costs associated with the interconnected regional delivery network necessary to deliver water to meet member agencies' average annual demands. Included are the costs of conveyance and distribution facilities
System Power Rate – recovers Metropolitan's power costs for pumping supplies to Southern California
Treatment Surcharge – recovers the costs of treating imported water
Readiness-to-Serve Charge - a fixed charge that recovers the costs of providing emergency service and available capacity to meet outages, emergencies and hydrologic variability
Capacity Charge – recovers the cost of providing peaking capacity within the distribution system which Metropolitan owns or has the right to use

Board Materials

Correspondence

Underlying Materials

Underlying Materials - Metropolitan has received requests in the past for data and other material used to generate or supporting Metropolitan's proposed rates and charges. Metropolitan provides this information for the current budget, rates, and charges for public review below (with proprietary formulas/code and employee-specific information removed).

Other Background Materials

The proposed biennial budget for fiscal years 2024/25 and 2025/26 and the proposed rates and charges for calendar years 2025 and 2026 are based on and supported by the information found in this section, as well as by the broader information available in the tab below at:

Adopted FY 2022/23 and 2023/24 Budget and CY 2023-2024 Rates and Charges

Adopted Resolutions

The adopted biennial budget for fiscal years 2022/23 and 2023/24 and the adopted rates and charges for calendar years 2023 and 2024 are based on and supported by the information found in this section, as well as by the broader information available at

Adopted FY 2020/21 and FY 2021/22 Budget and CY 2021-2022 Rates and Charges

Board Materials

Correspondence

Underlying Materials

Other Background Materials

Legal Documents, including Admin. Records

Rate Structure Administrative Procedures Handbook FY 2024/25

Rate Structure Administrative Procedure Handbook FY 2023/24

Historical Water Rates

Materials: 2019 Demand Management Cost Allocation Process

2022 Per-Acre Annexation Charge

Property Tax Rate	Fiscal Year
0.0035%	FY 2022/23
0.0035%	FY 2023/24

View the Proposed Tax Rate FY 2024/25.

The determination regarding the applicability of the MWD Act Section 124.5 tax limit is supported by the information found here.

Financial Reports and Documents may be found here.

Investor Relations

Issuing bonds helps to fund critical infrastructure investments that the regional economy depends on. These include investments in a regional recycled water program, water quality improvements and clean energy upgrades. Metropolitan is committed to maintaining our strong bond ratings and adheres to a policy of transparency with our investor community and general public.

Contacts

The Office of the Chief Financial Officer

Katano Kasaine
Assistant General Manager/Chief Financial Officer
(213) 217-7121

Adam Benson
Finance Group Manager
(213) 217-7121

Treasury & Debt Management

Samuel L. Smalls
Manager of Treasury & Debt Management
(213) 217-7863

Controller

Bernadette Robertson
Controller
(213) 217-7547

Revenue & Budget

Arnout Van den Berg
Section Manager
(213) 217-5771

Note: All information contained in the Financial Information pages is obtained from sources believed to be accurate and reliable. While all information presented is believed to be accurate and reliable, it is prepared without audit unless otherwise identified as audited financial information. Due to the possibility of human or mechanical error and other factors, this information is provided as is without warranty of any kind and MWD makes no representation, express or implied, as to the accuracy, reliability, completeness or timeliness of this information, and is not responsible for any loss or damage incurred by any party using this information. The information contained at this website has been included for general informational purposes only and no person should make any investment decision in reliance upon the information contained herein. This website and the information contained herein do not constitute an offer to sell or the solicitation of an offer to buy any securities.

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Budget & Finance

Adopted FYs 2024/25 – 2025/26 Budget and CYs 2025 and 2026 Rates and Charges keyboard_arrow_down

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