Water Authority Plans For Continued Drought, Weak Economy

In fact, the document is shaped by slight increases in water and sewerage sales, a reduction of almost 50 percent in income from service fees — and an increase of more than 60 percent in debt service.

When non-cash expenses like depreciation are factored in, the budget anticipates a net loss during 2009 of just over $100,000.

But that’s a vast improvement from the $1.6 million of red ink projected in the 2008 budget. The authority’s revenue has been decimated by two years of drought during which water sales were down tremendously.

The authority’s debt service is increasing dramatically — $45,000 a month — because it refinanced its debt in 2006 and during most of 2007 made interest-only payments. Now it’s starting to pay principal, so the annual debt service payment will be $1.84 million, compared to $1.18 million this year.

Bicknell pointed out that the county’s payment of $1.5 million on the Bear Creek Reservoir debt contributes significantly to the authority’s near-break-even budget.