Sparing the surprise: December decisions to fuel 2022-23 biennial budget

Share this post

Colorado River

When it comes to CAP’s financial planning process, water rates and the Biennial Budget, there’s generally no jolt of surprise.

Since there is a direct relationship between the budget and rates, it is important that the methodical, 2-year process of budget and rates work seamlessly together to help prevent any “rate shock” for customers.

Here’s a snapshot of this financial planning process:

  • In December, it is anticipated that the Central Arizona Water Conservation District Board of Directors will approve and adopt a new CAP Strategic Plan that takes effect in 2022.
  • This Strategic Plan serves as the basis for the Biennial Budget, which starts with each area’s Business Plans for 2022-23 and then identifies the resources to accomplish those plans through the requested budget.
  • The budget has to align with the rates that CAP has published previously, so CAP puts as much forethought as possible into the rates and budget, collaborating with water users and stakeholders through open dialogue to identify goals, objectives, key issues and future initiatives.

Zoom out from the budget’s extensive information, and this document is all about communicating the path to help CAP achieve its critical mission of reliably delivering water to central and southern Arizona. Also, as a cost-of-service entity that does not make a profit, CAP has a responsibility to provide this water supply at a reasonable price.

Here’s one way this is done: The 2-year financial planning process allows the CAWCD Board of Directors to primarily focus on water rates, strategic planning, reserves and financial strategy one year (during “even” years) and the budget in the subsequent year (“odd” years). One part of the process informs the next.  Each is then reviewed in its “off” year for any necessary changes.

This is why 2020 has included quarterly Water User Roundtable discussions that have included the topic of water rates. CAP also publishes water rates every two years as part of the integrated framework of the CAP financial process.

The 2021 year, therefore, will primarily be about developing the budget for the next two years.

Interested in more information? See our Biennial Budgets webpage.

No surprises necessary.