The Palmdale Water District (PWD) Board of Directors voted 5-0 this week to approve a $29.86 million budget for the calendar year 2023.
The budget, effective Jan. 1, 2023, indicates expected operating expenses to increase $2.3 million, or nearly 8.5%, from 2022’s budget of $27.86 million. Inflation and drought mandates played significant roles in the budget increase, according to a PWD news release.
PWD Finance Manager Dennis Hoffmeyer said the 2023 operating revenue is based on selling 14,500 acre-feet of water, which is equal to about $32.6 million. It is $851,000, or 2.7%, higher than the 2022 budgeted figure. Total revenue also includes $550,000 in potential capital improvement fees.
According to the PWD news release: “Increased cost in water production is the result of the drought, which requires PWD to operate more wells to pump groundwater due to cutbacks in surface water allocation from the state… Increased expenses in personnel costs for 2023 are due to cost-of-living increases, healthcare expenses and retirement funding. There also will be four new positions added.”
“Because of the state-mandated conservation of 20%, we had to reduce the projected water sales by about 2,000 acre-feet,” Hoffmeyer said. “Along with water-use restrictions due to the drought, we have hyper-inflation that is pushing up costs for everything. I’m confident with what we put together in this budget that we will meet our goal of maintaining our cash reserves.”
Budget figures show that PWD will end this year with about $12.8 million in cash reserves and with an identical reserve amount planned for the end of 2023.
A complete 2023 budget package will be available in January on the PWD website at www.palmdalewater.org.