Delivering a critical service: Board approves 2021 budget

Delivering a critical service: Board approves 2021 budget
November 24, 2020

Today the Board of Water Works, the governing body for Louisville Water, approved the company’s 2021 operating and capital budget. The upcoming year could be called the “Year of the Customer,” since many projects focus on improving the customer experience and helping those who are struggling during the pandemic.

The Board approved the budget in the midst of one of the most challenging years in the company’s 160-year history. As an essential employer, Louisville Water has gone extra lengths to ensure the safety of its employees who manage the systems that produce and deliver the region’s drinking water. The quality and reliability of Louisville pure tap® has never been more important, and Louisville Water continues to be ranked as one of the top utilities in North America for quality that goes above and beyond.

Managing through a Stressful Time

The COVID-19 pandemic has impacted the company’s 2020 financial performance with net income forecasted to dip $5 million below budget by the end of the year. The biggest driver is water sales. To date, consumption is down 5.9 percent, primarily from businesses and factories that temporarily closed in the spring.  The continued economic uncertainty in the business climate is a ripple effect for Louisville Water as it projects it will sell 32 billion gallons of water in 2020, the lowest amount in 52 years. Louisville Water’s 2021 budget includes a rebound in water sales and net income from the unusually low levels in 2020.

As Louisville Water prepares to end this year and begin a new budget, an important consideration is the large number of customers, approximately 18,000 to date, who have past-due balances. Since March 13, Louisville Water has not turned off water service for non-payment to ensure customers have drinking water for health and hygiene. Louisville Water is working with community partners on relief efforts through the Drops of Kindness program, and in 2021 the company will expand a new service for payment plans to cover an outstanding balance. The 2021 budget includes an initial $250,000 to the Louisville Water Foundation for local non-profits to use for customer assistance. 

Tools and Technology

The 2021 budget includes more than $23 million for projects that will improve how customers communicate with Louisville Water and monitor their water usage. Work is already underway to upgrade the automated phone system, provide an online chat function, and redesign the company’s website and payment portal. Louisville Water recently began replacing thousands of older water meters with new technology that will eventually allow for near real-time usage information.

Water Quality and Water Mains

The 2021 capital budget continues a long-standing commitment to quality, service and reliability. The $112 million capital budget includes at least $36 million for projects to inspect, replace and repair a percentage of the 4,200 miles of water main and for improvements at the water quality treatment plants.

The Price of Drinking Water: A 90 cents a month increase

The 2021 budget includes an increase of 22 cents a week or 90 cents a month in the average Louisville Water bill. Most residential customers use 4,000 gallons of water monthly and with the increase, the average monthly bill for drinking water will be $24.91. That amount includes a charge for the water service and then a charge based on every 1,000 gallons of water used. The increase helps pay for the operations of the water system that delivers 120 million gallons of drinking water daily to nearly one million people.