The board of directors of the Metropolitan Water District of Southern California Tuesday approve a cost-cutting plan to reduce expenditures in response to lower water sales and concerns about the financial impacts of COVID-19 on its member agencies.

The cuts will save about $11.7 million, while allowing MWD to continue providing a safe, reliable water supply, according to district officials. Staff will continue exploring additional opportunities for savings to bring back to the board for a mid-cycle budget review next summer.

The full consequences of the pandemic’s financial impact on MWD’s member agencies are not yet known, and declining revenue, low water sales and an increased reliance on district reserves necessitate fiscal discipline, said MWD board Chairwoman Gloria Gray.

“While most of our member agencies are successfully managing through these difficult times, there is a lot of uncertainty ahead,” Gray said. “So it is critical that we take every step possible to cut spending without sacrificing the essential service we provide to the region.

“COVID-19, wildfires and other challenges to our water supply due to climate change require us to maintain and adapt our water system to ensure Southern California’s people, businesses, hospitals and communities have the water they need through these difficult times,” she said.

The board also directed staff to develop a penalty-free payment deferment program, evaluate potential new revenue-generating programs, and place a moratorium on non-emergency, unbudgeted spending. The latest cuts come on top of additional measures to reduce spending made in April, when the board approved the biennial budget.

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