Hist and Proj Operating Receipts FY 2011 2 17 2010 - DC Water

Boys Town of Washington, DC - During 2009, DC WASA summer college interns painted the family center interior, removed
shrubs, provided landscaping and trash collection services. Also, for the fourth year in a row, a DC WASA staff member served as
Santa for the children.
Retail Rates and Fees - In 1997, shortly after DC WASA's creation, the Board eliminated all discounted and free service and
adopted a 42 percent rate increase to compensate for ten years without any increase and the resulting lack of maintenance and
investment in an aging and deteriorating water and sewer infrastructure. Since that time, there have been gradual increases in retail
rates - ranging from 2.5 to 9.5 percent. This is a continued reflection of the Board's policy to keep rates reasonable and affordable in
order to minimize the impact on retail customers. Additionally, since DC WASA does not make a profit, in years of better than
expected performance, any excess revenues that are generated above the system need, are placed in a Rate Stabilization Fund
(RSF) or are used to fund capital projects, both of which lower customer rate increases in the future. However, the RSF has been
drawn down by approximately $25 million in both FY 2008 and 2009 and it is anticipated that additional draw downs will be made in
FY 2010 leaving very little to underwrite rates in FY 2011. The use of the RSF in FY 2008 and 2009 reduced needed rate increases
by approximately 9.5% and helped to avoid rate shock in those years.
We have carefully reviewed our Ten-Year Financial Plan and near-term rate increases required to provide sufficient revenues to
cover our capital program and resulting debt service costs over the same period. Our budget proposal includes use of $2.6 million
from the RSF in FY 2011, a $0.77 per Cd combined retail water and sewer rate increase in FY 2011, following a 9.0 percent
increase approved in FY 2010, an increase to the Customer Metering Fee of $1.85 per month and an increase to the lAC of $1.24
per monthly ERU. With these proposed changes in FY 2011, the monthly impact to the average residential customer will be $8.66;
about the average cost of one lunch at a sandwich shop in downtown DC.
DC WASA's proposed rate increases are primarily required to collect the revenues previously under collected due to the existence of
a large rate stabilization fund, adjust for revised trends in consumption and to pay for increasing debt service costs, which will rise
from approximately 24 percent of the FY 2010 budget to 26 percent of the FY 2011 operating expenses. These debt service costs
finance the District's share of DC WASA's proposed $3.8 billion capital program, which is discussed in more detail later in this book.
In addition to the proposed retail rate increases, we are proposing an approximate $0.06 per Cd increase in the PilOT fees alone to
ensure that we fully recover the costs of this District of Columbia fee. This fee represents costs assessed by the District of Columbia
since 1997 and rise in accordance with increases in the volumetric retail rates. Through FY 2009, DC WASA has paid over $153.1
million in the PilOT fee. The ten-year plan projects annual increases to the PilOT fees between $0.8 million to $1.9 million.
DC WASA's current and proposed rates and fees remain very competitive with other water and wastewater providers 'in the mid-
Atlantic and the eastern United States. In fact, the FY 2008 independent comprehensive budget review noted that DC WASA's recent
rate increases have been much lower than other similar utilities. DC WASA's proposed monthly residential bill (including the lAC,
Budget Overview and Performance
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