OCWD reaps $58 million PFAS settlement windfall as FY26 spending drops
Orange County Water District, California · Meeting date: September 10, 2026 · Published: September 16, 2026
The Orange County Water District reported a massive revenue boost from PFAS litigation alongside significant capital and operational underspending, leaving the utility in a highly liquid position at the close of fiscal year 2026.
Key points
- The district received $58 million in PFAS legal settlements, driving total FY26 revenues to $336.3 million—nearly $66 million over budget.
- Total expenses came in at $165.7 million, which was $42.9 million under the revised budget.
- Replacement and refurbishment (R&R) spending was $19.8 million lower than planned due to project delays, including the Anaheim Valve Vault and Santiago floating pump station.
- PFAS operations and maintenance costs were $7.8 million under budget following downward revisions of previous cost estimates.
Full report
The Orange County Water District (OCWD) closed its 2026 fiscal year in a robust financial position, bolstered by a $58 million cash injection from per- and polyfluoroalkyl substances (PFAS) legal settlements and widespread underspending across its capital and operational accounts.
According to the district's end-of-year budget-to-actual report presented to the Administration and Finance Issues Committee on September 10, total revenues reached $336.3 million, outstripping the $270.4 million budget by nearly $66 million. The revenue surge was primarily driven by the PFAS settlements, alongside a $7.1 million boost in investment revenues stemming from higher-than-anticipated reserve balances and interest rates averaging 3.5 percent.
Simultaneously, OCWD reported significant underspending. Total expenditures for FY26 landed at $165.7 million, falling $42.9 million short of the $208.5 million revised budget.
Capital project delays accounted for the largest portion of the unspent funds. The district's replacement and refurbishment (R&R) budget was $19.8 million under budget. A district staff member noted that several major projects will carry over into the next fiscal year, including the Santiago floating pump station refurbishment, the Anaheim Valve Vault project, and the I-24 and I-25 well pump and valve replacements.
Operations and maintenance (O&M) costs for PFAS treatment also came in $7.8 million under budget. Staff explained to the committee that earlier accrual estimates had relied on preliminary data that overestimated the combined costs for the district and its groundwater producers.
Additionally, the district saved $5.8 million on water purchases, entirely forgoing a planned 5,000 acre-foot purchase of untreated water from the Metropolitan Water District (MWD) due to favorable basin levels. Unspent water funds will be retained in the district's water reserve for future use.
The district's general fund also saw a $7.9 million surplus, aided by reduced chemical costs for the Groundwater Replenishment System (GWRS). Lower-than-planned water production, prompted by heavy rain events, reduced the utility's need for chlorine and citric acid during the fiscal year.
This summary was generated by AI based on the source document and may contain errors.
Source: Administration Finance Issues Committee Meeting, Orange County Water District