Revenue vs Deductions

The chart above depicts the trend showing the annual difference between revenues and expenses for the Kennebec Water District from 1993-2005.  1993 was the year that the Kennebec Water District’s water treatment facility came online and the financial requirements of the District changed substantially. Adequate revenue was necessary to cover the new costs of debt service incurred in the construction of the plant and covered storage tanks as well as the added operational costs associated with the plant.    

There are a few major points to be made regarding this chart. Point 1: in no year did revenues generated meet or exceed expenses. In order to ensure that KWD did not experience an operating loss for the year, funds intended for capital improvements such as main replacement projects had to be diverted to cover operating costs.  Point 2: expense levels are very stable over the complete 13 year period. Kennebec Water District implemented many cost saving measures during the period to control expenses without compromising its service standards. Point 3: Beginning in 2005, there is a sharp jump in expenses due primarily to major price increases in electricity, chemicals, construction materials, health insurance, fuel oil, gasoline, and pavement – all of which were already prime expense contributors for the District. Our rate case proposal is based on projections of expenses and revenues for 2007. The year 2006 is not shown in our comparisons because it is still in progress and actual annual costs have not been determined, although half year costs indicate the 2007 projections are on track. KWD has a fiscal year running from January through December. 

revded

Click Image to Enlarge