Jim Madaffer: Strategic Steps to Address Emerging Fiscal Realities
Across the country, public agencies are scrambling to fill holes created by the pandemic – financial holes and, worse yet, holes in the workforce. It is safe to assume, until a vaccine is developed or an antibody treatment is found, we are living the new normal.
As we hope and pray that the worst days of the coronavirus are behind us, I am so thankful that the Water Authority took aggressive early action to protect employees and that we have had no COVID-related illnesses. I’m also grateful to report that our region’s water treatment and delivery systems are in good shape, and that they continue to provide clean, safe drinking water 24/7 due to the efforts of a few thousand employees of the Water Authority and its 24 member agencies. These dedicated public servants are doing their jobs day and night, despite numerous personal and logistical challenges.
That said, our region’s water agencies are collectively facing serious declines in revenues; businesses are not using water as expected, which means water sales have plummeted. Unlike some other industries, most of our costs are fixed. In fact, the Water Authority’s operating departments only account for about 6 percent of the budget.
This means that even when water sales drop, we still must pay the “mortgage” on the system – from pumps to pipes to filtration and whatever other costs we cannot control, such as increases from our water suppliers or higher costs for energy and treatment chemicals. For instance, we expect the Los Angeles-based Metropolitan Water District of Southern California to raise rates in San Diego County by more than 7 percent in 2021 despite our pleas for relief on your behalf.
Details about the financial impact of coronavirus will take weeks or months to emerge, but the Water Authority is already taking proactive steps to address anticipated challenges, from instituting a hiring freeze to assessing which non-essential projects and expenses can be deferred. I assure you that we are working every day to sustain our core mission to maintain the many values that we provide our region and make smart choices to ensure our long-term viability.
It is not an easy task, but we have 75 years of history that say we can do this together – and I know we will.
On a hopeful note, the region’s water agencies have joined forces to raise thousands of dollars for the Jacobs & Cushman San Diego Food Bank through voluntary donations by board members and employees. We’re always looking for opportunities to raise more money given the ongoing significance of the need. Click here to donate – and do not forget to share the link with family, friends and others who may want to participate. Every dollar helps feed those in need.
