By most measures, 2016 was transformational for the Contra Costa Water District. The year began with much-needed precipitation, yet our customers recognized the value of not wasting this valuable resource and continued to save water. In turn, we are adapting to the changing needs of our customers to provide great service at a great value during a time of great change. This annual report covers some of the improvements we’ve made and looks forward at what’s to come.
In 2016, our business acumen helped us maintain financial flexibility amid challenges of reduced water sales. Our current business model is not built around declining usage and we are working to change that for the future. We continue to prioritize new revenues and cost management over price increases. In 2016, we restructured debt and leveraged reserves to maintain our financial flexibility. We made adjustments to our operations to modernize business processes, reducing expenditures without diminishing our high quality service and we entered partnerships to optimize our existing assets. We renegotiated labor agreements, which resulted in reductions of health care expenses, ensured continued strength and viability of our retirement system, and maintained labor stability in uncertain times. And, most importantly, when Gov. Jerry Brown lifted the statewide restrictions, we kept our promise to our customers by eliminating the temporary price adjustment and rescinding many of the water-use restrictions imposed during the drought.
In a landmark deal with the state, we protected District investments totaling more than $1 billion. In the event that the California Water Fix actually gets constructed as planned by the Gov. Brown, this agreement ensures our assets can still deliver high quality water for our customers without impacting the Delta or other water users. As the California Department of Water Resources moves forward with the WaterFix, intended to achieve the co-equals of enhancing Delta habitat and improve water supplies, we took a significant step to safeguard against impacts on our facilities and operations. The agreement, which you’ll read about in this report, is an iron-clad insurance policy that goes into effect if the tunnel project ever gets built. It is important to note that our customers are relieved of any financial burden as a result of this agreement. CCWD remains engaged as the financial aspects of the WaterFix are worked out between the participants, which CCWD is not one.
On the regional front, we’ve started efforts with neighboring water agencies on the Bay Area Regional Reliability project. This collaborative evaluates ways to leverage existing infrastructure investments for regional benefit, facilitate the transfer of water during shortages, bolster emergency preparedness, and improve climate change resiliency. Preliminary indications are that these evaluations will point to the further expansion of Los Vaqueros Reservoir. This year, we received substantial interest and financial contributions to determine whether this asset, combined with new facilities, could improve water supply reliability for the region. What this means to CCWD customers is potential new revenue that can be applied to existing or new costs without diminishing any of the benefits customers already receive from the expanded reservoir. We’re working with interested agencies on a sensible plan and expect to apply for Proposition 1 funding in 2017.
A changing water landscape and unprecedented state mandates means it’s as challenging as ever to provide excellent service and high-quality water. Yet, our resilience to this new normal is evident. These challenges represent opportunities. We accomplished a lot and the future is bright for those served by the Contra Costa Water District.
Thank you for reading.
Jerry Brown | General Manager