If the state of California had a theme for 2006, it might have been the “Year of Investment.” This theme continued beyond the close of fiscal year 2005-06 and into November when California voters passed a comprehensive package of measures to add reliability to the state’s water systems, highways and schools. This underlined Californian’s growing understanding and appreciation for the need to replace, repair and renovate the state’s infrastructure.

2006 was also a “Year of Investment” for Metropolitan Water District. This theme for Metropolitan is hardly unique. It also defines 2005, 2004 and every year going back to 1928 when the agency was first formed. That is because making investments in water supply reliability has been, and continues to be, Metropolitan’s primary responsibility.

Metropolitan’s financial structure does more than provide affordable, reliable service for a diverse population. It also generates money for future investments that will help keep water rates reasonable, and provide an environmentally
friendly and economically sound and sustainable water supply.

In 2006, Metropolitan showed a renewed commitment to invest in the structural integrity of its water distribution and treatment systems with a $2.2 billion capital investment program that continues Metropolitan’s tradition of supporting
and nurturing local efforts in conservation, recycling and groundwater recharge.

The benefit for capital improvement projects, like those completed in 2005-06 and those budgeted in 2006-07, is evident. Old systems get repaired and work more efficiently. New systems are put into place that take water reliability and
quality to a higher level. Structures go up, tunnels are made through mountains, and new waterways are created.

What may be more difficult to visualize is the benefit of long-term investments like conservation and recycling, though they are just as significant. Some of these investments involve relatively easy lifestyle changes and produce real
water savings. For one day in one household, the benefit may be measured in baby steps—a few dozen gallons here, a few hundred gallons there. But when one adds up the efforts of millions of homes and businesses over a period of
months or years, there is a measurable detour from the status quo. Building on the legacy of its visionary founders, Metropolitan continues to invest in programs and projects that incrementally take us to a better place and toward a better use of our water.

In February, the Metropolitan board named its 13th general manager, Jeffrey Kightlinger, formerly the district’s general counsel. With Jeff leading Metropolitan’s strong team, the district was well situated to continue its core work. To address future needs, Metropolitan initiated an apprenticeship program that offers a two-year curriculum for electrical and mechanical technicians so the next generation of qualified personnel will be prepared to replace those who
will be retiring. This ensures continuity of service and institutional know-how.

Externally, much of the year’s work focused on the two major sources of the district’s imported water. One, the Sacramento-San Joaquin Delta, provides drinking water for two-thirds of the state, irrigates a substantial portion of
California’s farms, forms the state’s most important fishery habitat and is home to more than 10,000 species of migratory fowl. Levee failure in the Delta is a major concern because it would impact each of those uses. Metropolitan has invested significant time and resources in the Delta Visioning process, working with the state of California and other stakeholders to help develop a plan for how the
environmentally sensitive area will be protected in the coming years and keep a vital water supply reliable. Metropolitan’s board has adopted principles that support development of a long-range multiple-use vision by 2007 that considers all options for Delta land uses, statewide storage investments and the moving of Delta water.

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