OC Register Gets Facts Wrong about IRWD

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Contact Shannon Reed, Public Affairs Manager
reeds@irwd.com, (949) 453-5500

 

Orange County Register Watchdog columnist Teri Sforza's explanation of retained earnings in her Nov. 22 blog post entry "Special districts have nest eggs" was both inaccurate and misleading. She incorrectly implies through a mischaracterization of the term "retained earnings" that Irvine Ranch Water District (IRWD) is sitting on an accumulated cash "nest egg" of over $1.2 billion.

Sforza tells readers to think of retained earnings as the "accumulated profits and losses of the district over time." That is an outdated definition that is inconsistent with the local government reporting standards used in the documents where Ms. Sforza obtained her figures.  In fact, enterprise districts such as IRWD are required to report in our retained earnings figures total capital assets minus related debt, including all constructed facilities and infrastructure.    

In 2009 IRWD reported $1.2 billion in retained earnings which includes approximately $1.0 billion in infrastructure constructed over approximately 50 years.  This infrastructure, which serves about one fifth of the County, includes more than 1,100 miles of drinking water pipelines, more than 400 miles of recycled water pipelines, more than 900 miles of sewer pipes, 53 reservoirs, and two large wastewater treatment plants. Obviously this is not "accumulated profits" or some frivolous rainy day nest egg as alluded to by the Watchdog.  These are tremendously important public infrastructure assets without which water could not be supplied or delivered and sewage could not be collected or treated.  The balance of our reported retained earnings, approximately $200 million, pays for new construction and the high cost of replacement and refurbishment of these facilities as they begin to age.  Last year, the district invested over $90 million in new and replacement infrastructure creating local jobs and improving service to our customers.

IRWD provides water, sewer, recycled water and urban runoff services to more than 300,000 residents and numerous major employment centers. Our residential and business customers benefit from modern water and sewer infrastructure and among the lowest rates in Orange County. This did not happen by accident.  It is the result of careful and prudent fiscal planning over many years. Our goal is to always provide customers with low, stable rates, a diverse and highly reliable water supply, and excellent service.   The goal of the Watchdog, which we believe was not achieved in this article, should be to provide readers with accurate, factual information.

Paul D. Jones II
General Manager
Irvine Ranch Water District

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