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

The projected revenues to support the operating budget and capital projects total $281.2 million: $223.5 million from net sale of water; $35.2 million from fund balance; and $22.5 million from other non-operating revenues and interest income.

The operating budget totals $228.7 million, a net increase of $29.5 million over last year’s budget of $199.2 million. The net increase reflects a $23.4 million increase in debt service payments on the 2006 bond series; a $1.0 million increase in County-Wide Cost Allocation Plan (COWCAP); a $3.0 million increase in services of SFPUC; and a $2.0 million increase to the Hetch Hetchy assessment.

The Water Enterprise capital budget of $52.5 million funded through revenues includes $21.5 million for the main replacement program, $17.3 million for the Phase 1 of the Automated Meter Reading System, and $13.7 million for regional projects.