Enclosed is the FY 2008-09 operating and capital project budgets for the Hetch Hetchy Water and Power Enterprise as recommended by the Mayor and approved by the Board of Supervisors.

Projected revenues to support the operating budget and capital projects total $141.3 million: $102.3 million from the sale of power and energy, $24.3 million from the sale of water, $7.5 million from the sale of gas and steam, $4.7 million from interest income, and $2.5 million from other non-operating revenues.

The operating budget totals $103.5 million, a net decrease of $9.2 million over last year’s approved budget of $112.7 million. The net change primarily reflects decreases for power purchases and one-time funding for professional services and equipment. Five (5) new positions were added to Hetchy Power to support the administrative, warehouse and retail functions and $1.0 million was added to Hetchy Water to support fisheries studies, watershed, ecosystem protection, and amphibian/reptile monitoring in the Yosemite area.

Hetch Hetchy’s capital budget totals $37.4 million: $11.5 million allocated to Sustainable Energy Account projects (SEA), $14.4 million to support other Hetchy Power projects, and $11.5 million to support Hetchy Water’s infrastructure.

The FY 2008-09 budget also includes a general reserve of $0.4 million.