$1.2 Billion in Unplanned Spending

From 2012 through 2016, MWD spent almost $1.2 billion on unplanned expenses – significantly exceeding not only its budget but the amount it overcharged ratepayers.

Here’s a summary of MWD’s overspending, taken from the detailed table below:

$420 million – Turf removal subsidies/conservation programs

$260 million – Purchase of 12,719 acres of land in the Palo Verde Valley

$175 million – Purchase of 20,000 acres of Delta islands property

$129 million – Supply programs

$125 million – Other Post-Employment Benefits (OPEB)

$64 million – Other

——

$1.2 billion – Total

Date Funds AuthorizedFunds Authorized ForSource Of Funds†Amount Authorized
(millions)
Fiscal Year $ Spent In$ Spent (actual and projected - in millions)Expenditure Type & NotesSource
Total($1,194.5)
6/10/13OPEB TrustWRSF($25)2013($25)Actual ExpenditureSlide 31
6/10/13R&R FundWRSF$252013$0Fund TransferSlide 31
6/10/13WMFWRSF$252013$0Fund TransferSlide 31
8/20/13Hoover Dam Visitor Center Loan & Hoover Dam Air Slots LoanWRSF($25.6)2014($25.6)Actual ExpenditureSlide 12
9/10/13Foundational Actions Funding ProgramWRSF($3.3)2014($1.3)Actual ExpenditureSlide 9
9/10/13Foundational Actions Funding ProgramWRSF($3.3)2016($1.7)Projected ExpenditureSlide 9
2/11/14Conservation/Turf SubsidiesWRSF($20)2015($20)Actual ExpenditureSlide 21
4/12/14OPEB TrustWRSF($100)2014($100)Actual ExpenditureSlide 21
4/12/14R&R FundWRSF$1002014$0Fund TransferSlide 21
4/12/14WMFWRSF$2322014$0Fund TransferSlide 21
5/13/14On-Site Retrofit ProgramWMF($7.5)2015($0.2)Actual ExpenditureSlide 19
5/13/14On-Site Retrofit ProgramWMF($7.5)2016($7.3)Projected ExpenditureSlide 19
6/30/14Supply ProgramsWMF($25)2014($25)Actual ExpenditureSlide 12
6/30/14Operating ExpensesR&R($25)2014($25)Actual ExpenditureSlide 12
9/9/14Semitropic ProgramWMF($5.8)2015($5.8)Actual ExpenditureSlide 19
10/14/14Yuba Transfer ProgramWMF($20)2015($8.8)Actual ExpenditureSlide 19
10/14/14San BernardinoWMF($1)2016($1)Projected ExpenditureSlide 19
12/9/14Conservation/Turf SubsidiesWMF($40)2015($40)Actual ExpenditureSlide 19
1/13/15SWC Buyers Grounp Initial DepositWMF($0.5)2015($0.5)Actual ExpenditureSlide 19
2/10/15Multi-Year Water PoolWMF($46)2016($1.5)Projected ExpenditureAuthorizing Memo
Slide 19
3/10/15Kern-Delta ProgramWMF($2.5)2015($2)Actual ExpenditureSlide 19
3/10/15SWC Buyers Group TransferWMF($71)2015($11.5)Actual ExpenditureAuthorizing Memo
Slide 19
3/10/15Arvine-Edison ProgramWMF($3)2016($3)Projected ExpenditureSlide 19
3/10/15Conservation Advertising & Outreach (aka "external affairs")WMF($2.5)2016($2.5)Projected ExpenditureSlide 19
3/10/15Kern-Delta ProgramWMF($2.5)2016($0.5)Projected ExpenditureSlide 19
3/10/15SWC Buyers Group TransferWMF($71)2016($0.5)Projected ExpenditureSlide 19
5/11/15Yuba Transfer (Additional)WMF($6)2015($2.7)Actual ExpenditureSlide 19
5/11/15Yuba Transfer (Additional)WMF($6)2016($3.3)Projected ExpenditureSlide 19
5/26/15Conservation/Turf SubsidiesWSF($50)2015($50)Authorized ExpenditurePage 5
5/26/15Conservation/Turf SubsidiesWMF($140)2016($140)Projected ExpenditureSlide 19
5/26/15Conservation/Turf SubsidiesWRSF($160)2016($160)Projected Expenditure;
This amount transferred to WMF
Slide 19
7/14/15PVID Land PurchaseWRSF($100)2016($100)Actual ExpenditureSlide 13
7/14/15PVID Land PurchaseR&R($164)2016($160)Actual ExpenditureSlides 13 & 14
9/22/15SNWA TransfersWRSF($44.4)2016($44.4)Actual ExpenditureSlide 10
11/10/15AVEK Exchange & Storage ProgramSupply Programs($16.6)2016($16.6)Authorized ExpenditurePage 1
1/13/16Bard Fallowing ProgramUnclear($1.8)2016($1.8)Authorized ExpenditurePage 1
2/9/16Sacramento Valley transfersUnclear($0.5)2016($0.5)Authorized ExpenditurePage 1
2/9/16Salary AgreementsUnclear($10.5)2016($10.5)Authorized ExpenditurePage 1
3/8/16Delta Islands PurchaseDebt($196)2017($196)Projected Expenditure
*$175M in debt issued in Dec 2016
Page 1
$175M debt issuance

*Although MWD initially authorized the purchase of the Delta islands in March 2016, the Board “took another bite at the apple” in May 2016 and choosing to move ahead with the purchase. Due to litigation, escrow closed in July 2016 and the Board authorized issuing debt up to $196M in September 2016.

†Source of Funds Key

  • WRSF – The Water Rate Stabilization Fund was created to avoid water rate spikes during wet periods when water sales typically decline. MWD’s Board policy says the fund is supposed to maintain enough cash to “stabilize” rates for 18 to 30 wet months. However, MWD has been spending the money on a wide variety of unrelated projects and programs.
  • WMF – The Water Management Fund is used for what MWD calls “variations in revenues and costs due to hydrology.”
  • R&R – The Replacement and Refurbishment Fund is used to finance certain capital program expenditures.
  • Unclear – MWD did not disclose the funding sources.
© The Truth about The Metropolitan Water District of Southern California.