(Washington, DC) In a rare move for a governmental agency, the Board of Directors of the District of Columbia Water and Sewer Authority (DCWASA), today unanimously adopted budgets for revised fiscal year 2003 and fiscal year 2004 that hold the line on operational spending while increase programs that improve customer service.

Board Chairman, Glenn S. Gerstell, said that this is banner day for the Authority for several reasons. "First, it is rare to find a governmental agency that does more with less and is still able to amply fund projects to provide better customer service. We have achieved that with our budgets."

"Second, our operational budgets continue to be lower than they were in previous years – specifically, in FY '98, the approved budget was $263 million and six years later with general inflation of over 15 percent, our adopted 2004 budget is only $259 million. The revised fiscal year 2003 budget is $249 million - $4 million less than the originally Board adopted budget last year."

Gerstell, a District resident and managing partner of the firm Milbank, Tweed Hadley & McCloy LLP, added that, "the most important factor in devising and adopting these budgets is that they reflect DCWASA's daily, ongoing commitment to provide excellent customer service to our residents throughout the District of Columbia. Our customers have high expectations from us and rightfully so because we deliver one of the most important services in the city – safe drinking water and then clean and recycle it to the Potomac River."

For FY 2004, the management originally proposed an increase of $7.5 million over DCWASA's approved 2003 budget of $253.7 million. The Board directed management to reduce that figure and see where other efficiencies can be made to bring this number down. The management was successful in doing this, and reduced the number by more than half, to $3.3 million over 2003's budget.

Chairman Gerstell also noted that, "It was not an easy feat holding the line on operating costs and still increase the quality of our service delivery because there are escalating energy and chemical costs, among others, that are not always under the Authority’s control. In fact, while these costs have increased over time, we had to find savings elsewhere within our budgets."

DCWASA's Capital Budget was comprehensively designed to reflect a "lifetime budget" for its 10-year Capital Improvement Program (CIP) - $4.9 billion. This reflects the anticipated costs of all projects in the CIP during the ten-year period and provides for better planning. This is only the second year we have created a lifetime budget.

In order for customers to realize the benefits of the capital program, DCWASA is also proposing a small rate increase for next fiscal year (FY 2004 – 4.4 percent) and in FY 2005, 5 percent. There is NO rate increase for this fiscal year. This spring, DCWASA will conduct informational community meetings and a formal public hearing for customers about the rates proposal.

Among many other projects, the budgets also reflect funding for improvements to the water system infrastructure in various parts of the city including nearly $40 million worth of improvements in Anacostia and improvements to the combined sewer system projects worth $142.1 million.

In his remarks to the Board at its January meeting today, Gerstell stressed that the budgets are designed annually to put customers first in all phases of planning. "The budgets reflect our ongoing commitment to provide excellent customer service to our residents throughout Washington, DC and to our suburban partners. We will live up to our motto: Serving the Public, Protecting the Environment."