Fiscal Year 2009-10 Adopted Budget

The FY 2009-10 adopted budget was reviewed by the Santa Clara Valley Water District Board of Directors in its work study sessions of May, and it was adopted on June 1, 2009. Despite reduced water revenues and higher costs for conservation outreach, construction and water banking, the FY 2009-10 adopted budget generates efficiencies agency-wide while maintaining service effectiveness and critical infrastructure. Key highlights include:

Responding to the economic crisis
The District is responding to the impacts of the ongoing recession in our community by cutting costs throughout our agency. These cost savings allow the District to propose no increases in groundwater production charges, and address possible structural budget deficits in the Watersheds and Stream Stewardship programs. For FY 2009-10, we have:

• Reprioritized work to address critical needs first, coupled with elimination or delay of lower- priority projects
• Reduced staffing by 29 positions
• Consolidated services and functions wherever possible
• Cut temporary staff, overtime and nonmandatory training
• Cut cell phone usage in half; limited travel and supplies
• Reduced 25 fleet vehicles, replacing some with hybrids for fuel efficiency
• Extended district-wide planned computer upgrade schedule

Strategic planning for fiscal accountability
The District's business and budget priorities are driven by its strategic plan, which outlines three top issues and goals to be addressed over the next five years. These issues and goals, and strategies to address them in the adopted FY 2009-10 budget, are included below:

Issue 1 - Effective business practices and fiscal accountability must be demonstrated.
Goal: Stakeholders acknowledge significant improvements in our business practices and fiscal accountability.
Strategy 1: Improve product and service delivery
Strategy 2: Implement prudent financial plans
Strategy 3: Demonstrate value to key stakeholders


Issue 2 - Workforce capability, adaptability, efficiency and accountability must be achieved.
Goal: High workforce engagement is achieved to meet business needs in a changing and diverse environment.
Strategy 1: Improve workforce and organizational adaptability
Strategy 2: Create an environment of commitment and accountability


Issue 3: - The value of our assets must be maintained.
Goal: Assets are effectively and efficiently managed and protected.
Strategy 1: Make coordinated, environmentally responsible and prioritized asset investment decisions
Strategy 2: Strengthen and enhance our water supply reliability
Strategy 3: Prepare for continuity of service during disruptions

Continuing water shortage
As water shortages continue into a third year, consumer actions to meet the Board's call for mandatory 15 percent water conservation are projected to result in water utility revenue reductions of $9.5 million in FY 2009-10. Increased public outreach on water conservation is budgeted at $1 million, while importing 31,500 acre-feet of "banked" water into the county is budgeted at $4.4 million.

Asset management and dam safety
The District manages its assets to minimize risk of failure in providing reliable products and services. In addition to developing a District-wide asset management framework in FY 2009-10, key asset management activities include:

• Completing scheduled condition assessments and planning funding estimates as part of the Annual Maintenance Work Plan for the District's Water Utility Enterprise and Watersheds, allocated approximately $0.6 million and $2.5 million, respectively.
• Focus on systematic approach toward asset management

The District carries out a comprehensive dam safety program for its 10 dams, and works with state and federal regulators on dam operation and safety, including seismic stability evaluations. Activities for FY 2009-10 include:

• Analyzing and reporting on dam surveillance, safety, site geology and inundation map studies, and conducting post-earthquake dam assessment training, allocated $1.8 million.
• Dam/reservoir maintenance and associated environmental planning, allocated about $1 million.
• Completion of field and lab investigations for the Almaden, Anderson, Calero and Guadalupe dams, and beginning the field and lab investigations for Stevens Creek and Lenihan dams as part of the Seismic Stability Evaluation capital project; budgeted at $2 million.

Leveraging federal stimulus funding
The District was successful in securing federal stimulus funding of $10 million in April 2009, which brought the much-needed Lower Silver Creek flood protection project back on track. In addition, the U.S. Army Corps of Engineers, a district partner, received $12.5 million to complete the District's Downtown Guadalupe Flood Protection Project. Additional stimulus funding is being pursued.

Construction costs
The District is assuming a 7 percent annual increase in construction costs, despite the economic downturn. This increase continues to be driven by global demand for materials. The market conditions factor-previously set at 10 percent-is reduced to zero in the FY 2009-10 budget, reflecting a local and national trend of strong availability of experienced, well-qualified contractors for District capital construction.

Workforce planning
For FY 2009-10, the District will be developing and implementing a pilot program in its Water Treatment Operations and Maintenance division that will address retirement projections; succession planning; optimization of staffing to meet operational requirements; knowledge management and transfer processes; training and development plans; and recruitment strategies.

As part of its cost-cutting and efficiency measures, the District has cut 29 positions in the adopted FY 2009-10 budget, and will use future vacancies to supplement critical work. Executive management will continue the process to review positions as they become vacant to determine appropriate disposition. In addition, several positions are being redeployed to key strategic areas, while staffing for lower-priority work has been reduced.