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Board of Water Works Approves 2013 Budget

Tuesday November 20, 2012

Today at its November meeting, Louisville Water Company’s Board of Water Works approved the company’s 2013 operating and capital budgets. The 2013 plan continues the focus to provide a high-quality supply of drinking water for less than a dollar a day and investments to enhance the water delivery and customer service systems.

Above and Underground Focus
The capital budget is $74.3 million and includes projects that will improve the water treatment and customer service systems.

Louisville Water will complete rebuilding the Crescent Hill Filtration Plant in 2013. The work over the past three years has included nearly every aspect of the treatment process at the 103-year-old facility. The final stages include renovating the filtration system and rebuilding the coagulation basins.

The capital budget includes $9 million to assess, repair or replace water mains throughout the service area. Louisville Water has over 4,100 miles of water main in its system. Each year, engineers identify several miles of main to assess and renew as part of an ongoing infrastructure improvement program.

The budget also includes two customer service initiatives. First, Louisville Water will expand automated meter reading (AMR) to southeast Jefferson County. AMR is technology that allows Louisville Water to more effectively read a water meter using a small radio transmitter on the meter that captures consumption data. Instead of walking through a neighborhood, Louisville Water meter readers can drive through the area as software inside the vehicle captures the meter reading. Louisville Water currently uses AMR in Oldham and Bullitt Counties; it’s ideal for more rural areas where homes are further apart. The company will also begin a three-year project to replace the customer care and billing system. When complete in 2015, this project will create additional customer service options and help streamline the work orders for field crews.

Operating Budget Reflects a Continued Decline in Water Consumption
Revenue for 2013 is projected at $167 million, based on an estimated sale of 36.5 billion gallons of water. The estimate is half-a-billion gallons less than 2012. Downward trends in water sales continue to create challenges since over 75% of Louisville Water’s operating costs are fixed. Much of the consumption patterns are tied to the weather. Even with the record heat in 2012, water sales are below budget. Plus, Louisville has moved from a manufacturing-based economy to a service-based economy that requires less water. 

The 2013 budget reflects success in Louisville Water’s efforts to be a partner in regional water-supply solutions. Contract operations with Hardin County #1 at Fort Knox and the River Ridge Development Authority will continue to provide a new source of revenue.

The operating and maintenance budget is $68.6 million, a 4.3% increase from 2012. Higher costs for power and pension expenses represent the largest part of the increase.

“Louisville Water, like so many other businesses, continues to slowly recover from the economic recession,” said Greg Heitzman, President and CEO of Louisville Water. “While water consumption continues to decline, we are optimistic about the growth outside of our current service area. Our abundant supply and low-rates allow us to work with water utilities in surrounding communities.”

Maintaining Affordable Water Rates
The 2013 budget includes a 3.75% water rate increase, effective January 1. The average residential bill will increase monthly by 77-cents to $21.40 for a customer using 5,000 gallons of water. This equals 72 cents a day. The 2013 rate increase mirrors the 2011 and 2012 increases.

Louisville Water continues its commitment to help customers who struggle to pay their water bills. The 2013 budget includes $95,000 for the Customer Assistance Program administered by three local entities that work directly with clients. Louisville Water funds the program with 10% of the proceeds from the home water and sewer line protection programs.

The projected 2013 dividend for the company’s stockholder, Louisville Metro is $19.7 million. Louisville Water estimates a dividend of $19.2 million for 2012.