Tampa Bay Water must approve a budget by August 1 of each year, but the development starts about nine months earlier. It’s an inclusive process involving staff and our member governments to ensure the best possible budget for the regional utility.
The process begins each November with the utility’s departments submitting proposed budgets. At the same time, Tampa Bay Water reaches out to its members to determine if they will have any special needs in the coming year that could affect the budget. The budget expenses are revised with that information, but the single largest driver of Tampa Bay Water’s annual budget is bond debt service. Repayment of bond debt constitutes about 43 percent of the utility’s total expenses, so the utility keeps a close eye on refinancing or repayment opportunities to reduce debt service.
Likewise, operating costs, like water treatment chemicals and power, are also significant drivers, constituting about 14 percent of the utility’s total expenses. These costs vary year to year, so staff must take market forces into consideration when budgeting these expenses.
In addition to expenses, Tampa Bay Water must also develop a forecast of income, which is generated primarily through the sale of water. That means an accurate budget relies on an accurate forecast of longer term, annual demand. Thankfully, our long-term forecasting is nearly as accurate as its short-term forecasting as evidenced by the lack of mid-year rate increases over the past decade.
Once demands are forecasted, the utility then determines which sources will be used to meet that demand. A number of factors affect this decision, including where water is needed, long-term weather forecasts, sustainability, reliability, permitted quantities, water quality, cost and more. The recommended blend of water affects the rate because some sources are more expensive to treat than others. For example, surface water is more expensive than groundwater and desalinated seawater is more expensive than surface water.
Tampa Bay Water develops a draft budget document in March that includes all the anticipated expenses and income forecast. That draft document is reviewed with each member government to ensure our customers’ needs are being met and address any concerns. In April of each year, a budget workshop is held to review the proposed budget with the board, answer questions and address any policy-related concerns.
Once the final budget is presented to the board for approval in June, it has been thoroughly reviewed by our staff, our member governments’ staff and our board members. The result is an award-winning annual budget that balances affordability, reliability and sustainability for the Tampa Bay region.
