Hi Ms. Hall (and bcc to others that have emailed similar concerns in the last few days),
Thank you for your email about Menlo Park Municipal Water operations and funding. I wanted to provide some information about the financials of the water system in response to these messages. The water system operates as an enterprise fund, and by definition, must fully cover its expenses, using from funds paid by water customers of the system. No subsidies are currently provided to the system by any other funding source.
For example, based on our audited financials for the last two years, we’ve fully covered our operational expenses each year with surplus funds remaining. This surplus is reinvested in our capital infrastructure as needs are identified and funds are available. The attached documents are pages excerpted from the City’s Comprehensive Annual Financial Report (CAFR) for the water funds. I’ve added the yellow highlights to the income statement (page 3 of each PDF) that shows the annual revenue and expenditures for each year, and a summary of this info is provided in the following table as well.
2017-2018
2018-2019
Total operating revenues
$11.34m
$12.85m
Total operating expenses
$8.95m
$10.08m
Net income
$2.26m
$3.09m
Source link
2018 CAFR pages 189-192 of PDF
2019 CAFR pages 185-188 of PDF
As you can see, the resulting surplus is between $2-3 m per year which is reinvested in the system. If you have any other questions, please feel free to reach out.
Thank you,
Nikki
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Nicole H. Nagaya, P.E.
Public Works Director
City Hall - 1st Floor
701 Laurel St.
tel 650-330-6781
menlopark.org
From: Debbie Hall
Sent: Monday, September 7, 2020 11:26 AM
To: _CCIN
Subject: Menlo Park Water Dept.
.
Dear City Council members,
I recently read Ron Shepherd's letter recommending that you consider selling the city water department. His arguments are compelling and I had the same reaction some months ago when looking at the city's budget. It seems the department is far too small to provide all that Menlo Park customers need (water quality testing labs, measurement and reporting; customer service and billing; maintenance and repair in a timely manner; water treatment and disinfecting). Furthermore, per Shepherd's letter, it appears to be running a large annual deficit and requires significant upcoming capital improvements. CalWater, on the other hand, is the largest regulated water utility west of the Mississippi and is far better positioned to provide the service and critically needed maintenance. They are a profitable, publicly traded utility with over $714 MM in revenue (in 2019) that made $273 MM in capital improvements that year.
As a city council, you have a huge job and I so appreciate all you are doing to keep our city finances in line. Thank you! This year especially it has been a tough job. Please consider the benefits of selling the water district.
Best,
Debbie Hall
1245 Hillview Drive
Menlo Park
