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

Regional Macro-Economics
DC WASlt's top priority is to provide safe portable drinking water and environmentally friendly wastewater treatment to our retail and
wholesale customers in the District of Columbia metropolitan area, Montgomery County and Prince Georges County in Maryland
(through Washington Suburban Sanitary Commission), and Fairfax and Loudoun Counties in Virginia. DC WASA's retail customers
include 'Residential, Commercial and Multifamily', (which is the largest base), Federal Government', DC Government', and the 'DC
Housing Authority.' There are slightly more than 590,000 residents in the District of Columbia living in approximately 284,000
households and merely 134,000 customers with the responsibility to pay for the majority of operations, maintenance and replacement
of the water and sewer infrastructure throughout Washington, DC. Compared to the additional 1.5 million living throughout the DC
WASA service area and using a small portion of the wastewater collection and a larger portion of the treatment facilities, there are
fewer customers to share the burden of the aging infrastructure assets serving the residents, visitors and governmental entities in
Washington DC.
The economic downturn has impacted all customer sectors, demonstrated through above average unemployment rates in the District
and surrounding jurisdictions, and local government layoffs and commercial closings throughout FY 2009. In addition, approximately
15.7o/o of the families in Washington DC live at or below the poverty level. While the Census Bureau recently noted that the DC
metropolitan region had several jurisdictions in the top 10 wealthiest communities in 2008 in the United States, unemployment
continues to rise. During this same time period, water and sewer consumption fell below the anticipated one percent resulting in
reduced receipts.
At DC WASA we believe that identifying and understanding customer requirements is a strategic component of our planning process.
Therefore, the rate setting process must be sensitive to the local economy in terms of socio-political and macro-economic trends.
This is manifested in trends such as lower metro rail ridership (less employees coming into the City for jobs), and higher commercial
leased vacancy rates. However, tourism appears stable as demonstrated by strong hotel vacancy rates and solid restaurant
patronage in downtown Washington, DC. According to the Greater Washington lnitiative, the region's job sector includes 12o/o of the
work force in the federal government, 10o/o state and local government, and 23o/o professional services and spending from the federal
government represents 33% of the regional economy. This federal spending supports a large portion of the professional services
business in the area. Analysts at George Mason University predicted that the region will end 2009 with a net job loss. However,
projections of federal hiring of up to 120,000 employees over the next few years may signal a faster rebound for the region than in
most of the nation.
As we review our strategic goals and revise our short and long range planning documents, we will continue to review and analyze the
economic, political and demographic signals and trends in the region, as illustrated in the key facts and summary in the following
pages. The number of customers and their ability to pay plays a significant part in the sizing of services, improvements and
revenue/rate expectations.
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