NID working to balance revenues with expenditures
May 6, 2014
Last year, as part of NID's water rate setting process, we held multiple public meetings with interested parties. These included meetings of our Water Rates Committee, a board workshop and a public hearing.
While most district customers understand the need for periodic water rate adjustments, they want to be sure that increases are necessary and that the district is doing its part in keeping its costs down. During this process and in response to queries from concerned citizens, we explained our cost-cutting process.
As part of the financial process, I asked each of my department managers to document and quantify specific financial efficiency measures. Most were relatively small compared to the district's $60.4 million budget, but together they added up to nearly $1.4 million in reduced costs.
As part of NID's overall budgeting process, your elected board of directors carefully reviews all district operations. While the board and staff are confident the district is operating efficiently, we continue to evaluate processes and procedures for opportunities to find additional financial efficiencies.
These efficiencies may be increasing power generation opportunities, changing a process to reduce costs or finding a new vendor for products we purchase.
Most significant among the savings in 2013:
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• The district's outstanding safety program and low injury rate have resulted in $105,000 annual savings in workers' compensation premiums. We achieved an additional $104,000 in savings through safety training and documentation with our insurer, the Special District Risk Management Authority.
• Staff reorganizations in the engineering, water operations and maintenance departments have resulted in savings of $130,000. This has been accomplished through restaffing and retirements. No employees were laid off.
• Delayed purchase of some new vehicles, a change to a new Internet service provider and more automated water flow measurement equipment (replacing man-hours and travel time) have resulted in another $100,000 in savings.
The district is also working proactively to increase other revenues. A key revenue source in the coming years is our hydroelectric energy production. As of April 2013, NID is operating under a new power sale agreement with PG&E. We have also obtained grants to improve our water systems and watershed, and we have increased revenues along with public recreational opportunities through concessions at Rollins and Scotts Flat reservoirs.
Our state and region are clearly in a drought, and that will have a direct impact on the district's financial position in the coming months. We are asking customers to conserve water (10-15 percent is called for in our Drought Contingency Plan) and because of the drought, we anticipate significant declines in the water sales' revenue that supports the NID water utility. On the staff level, special dry-year operations can cost more than normal years, but we are confident that we have made all of the necessary adjustments to reduce impacts to our customers.
Our customers should be aware that NID rates remain affordable and less than those charged by comparable water purveyors, which, again, is a testament to our efficiency and frugal behavior. The district's commitment to service will not change; we are working every day to make sure your water is of the highest quality and there when you need it.
Rem Scherzinger is general manager at Nevada Irrigation District.