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

Recent economic projections of the DC economy from various expert sources vary. However, the presence of the federal
government along with announcements of new offices and projections for an increase in the federal workforce help to mitigate the
loss of commercial and District govemment customers.
Major Accomplishments
The FY 2009 - 2018 financial plan and Board policy set out severalfinancial and organizational goals to be accomplished in FY 2009.
During FY 2009, DC WASA met or exceeded the financial goals set out by the Board and the FY 2008 - 2017 financial plan. Senior
debt service coverage, reserve levels, and budget performance met or surpassed Board policies, as discussed in more detail below.
* DC WASA Board policy requires senior debt service coverage of at least 140 percent, greater than the indenture requirement of
120 percent. DC WASAS senior debt seruice coverage in FY 2009 was at 297 percent, reflecting implementation of the
Board's policy of gradual and predictable rate increases and lower than projected capital spending. Senior debt service coverage
will decline to 148 percent in FY 2018 as capital spending and related debt issuance increase. Subordinate debt service
coverage (subordinate debt service includes DC WASA's subordinated lien revenue bonds, DC WASA's share of the District of
Columbia general obligation debt, Little Seneca Reservoir debt, and Jennings Randolph Reservoir debt) in FY 2009 was at 161
percent. DC WASA is required to have 100 percent coverage of subordinate debt service. Combined debt service coverage was
at 134 percent in FY 2009.
* DC WASA utilized $25 million of the rate stabilization fund in FY 2009,leaving a remaining balance of $28.6 million in the
fund. This utilization of RSF reduced the FY 2009 DC retail rate increase by approximately 9.5 percent.
* DC WASA Board undertook an in-depth review of the size of the existing operating reserve to ensure strong levels of operating
cash to provide emergency contingency funds and liquidity, while maintaining DC WASA's strong credit rating. The Board
concluded that the appropriate level of operating reserve should be 120 days of budgeted operations and maintenance costs. ln
FY 2009 the DC WASA Board approved revised financial policies requiring cash reserves (excluding the rate stabilization fund) to
be the greater of to 120 days' operating and maintenance expenses or $125.5 million. DC WASA consísfently met this goal
during FY 2009, with an average daily balance during the year of $130.7 million, $5.2 million greater than the Board's
policy.
* DC WASA continued its strong operating budget performance in FY 2009. Operating cash receipts were below budget by
$11.5 million, or 3.3 percent; operating expenditures are $25.4 million, or 7.0 percent, less than the Board-revised budget. During
FY 2009, DC WASA experienced lower than anticipated costs for electricity and chemicals driven by the decline in market prices
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