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

(AWWA) verifies that the growing re-investment needs of water and sewerage utilities is significant throughout the nation and
provides the potential for economic challenges as agencies may need to grapple with replacement needs against the need to comply
with more stringent regulatory standards for safe drinking water and environmental improvements. Many cities like Washington, DC
have miles and miles of pipes that were buried 100 years ago or more and which must be replaced over the next few decades.
AWWA refers to this as "the dawn of the replacement era". They estimate that $250 billion nationally may be required over the next
30 years for water infrastructure replacement alone. Ultimately, the utility ratepayers must finance these needs and their associated
costs where other sources of funds are unavailable.
The economic recession that has been and continues to be experienced by all industries has had an impact on all aspects of
construction. Energy costs have materially retreated from their highs of only a few years ago. Major development projects have also
fallen to record lows due to the lack of available financing. Unemployment is at record highs. How all of this will impact the future
costs of our CIP is yet to be determined. While these are very uncertain economic times, we recognize the magnitude of the multiple
challenges facing us and our customers as we attempt to maintain our infrastructure and meet the requirements of the regulatory and
government mandates. We will continue to monitor the complex environment we are operating in and assess its impact on our CIP
planning and budget.
The Office of the Deputy Mayor for Planning and Economic Development has expressed a desire to redevelop the area immediately
surrounding the new ballpark to take advantage of the momentum and potential for the area. The DC WASA Departments of Sewer
Services, Fleet Management and related facilities are directly across from the new stadium, and we have continued to negotiate with
the relevant parties on the potential relocation of our facilities. In the prior year's budget, we included $42.5 million to cover the
estimated costs of relocation and development of a new site. We anticipate no impact on DC WASA ratepayers as these costs are
expected to be fully reimbursed by the District. This budget has been rolled over into the current CIP and we will continue to ensure
that all appropriate steps are taken to protect the essential public services and assets that are located in the vicinity and to ensure
that any potential relocation will not interrupt vital services.
One rapidly developing area of the District of Columbia is NoMA, the area west of Union Station to New York and New Jersey
Avenues and from Massachusetts to Florida Avenues. Many construction projects in this area are underway with many more
planned over the next several years. The area is characterized by very old water and sewer infrastructure that needs to be replaced
and/or rehabilitated to reliably support the planned development.
Budget Overview and Performance
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