Director, Associate Cooperative Extension Specialist University of California Agriculture and Natural Resources, California, United States
Abstract Submission: Water agencies must maintain financial stability to fulfill their core of delivering water to residents and businesses. In California, water agencies plan for periodic drought and water scarcity through investments in infrastructure and demand management programs. During severe drought, water agencies even boost conservation programs or augment supplies to ensure continued operations. These actions can impact utility finances by increasing operational expenses, reducing revenue, or requiring new unexpected spending. To what extent could drought affect water utility finances and what metrics are valuable to capture changes? To examine this question, for municipal water agencies in California, we combined data on water supply and use for municipal water agencies in California with data from annual water utility financial reports collected by the California State Controller. Together, the data set considered fiscal data within municipal enterprise funds for 483 municipalities from 2001 to 2022. We compared financial performance indicators with drought indices, operations, and agency characteristics. We clustered water systems and used Ordinary Least Squares (OLS) and linear mixed regression modeling to evaluate explanatory factors of key financial capacity metrics, including Adjusted Operating Ratios, annual revenue, and depreciation, and more. The modeling provides new potential tools for water management to assess and improve fiscal performance of water agencies in California that experience periodic drought. The presentation will discuss results from the analysis and potential implications for water policy, which are widely applicable to urban water agencies.
