MWD Board Approves Budget Cuts in Response to COVID-19

In response to lower water sales and concerns about the financial impacts of COVID-19 on its
member agencies and the public, the board of directors of the Metropolitan Water District of
Southern California today voted to approve a cost-cutting plan to reduce district expenditures.

The cuts will save about $11.7 million, while allowing Metropolitan to continue providing the
safe, reliable water supply Southern California depends on. 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 Metropolitan’s member agencies
are not yet known, and declining revenue, low water sales, and an increased reliance on district
reserves necessitate fiscal discipline, Metropolitan board Chairwoman Gloria Gray said.

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

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.