Financial and Capital Highlights Fiscal Year Second Quarter Charles Turner, Director of Finance

Presentation Topics Staff prepared a quarterly financial report and accompanying analysis - Board Work Session Includes key variances and operational highlights - Prior year (FY ) and year- to-date budget to actual -Information for each business service, G&A, and other statistics Includes key variances in Capital Program 2 Consolidated Enterprise Operating Services – Water Service – Sewer Service – Recycled Service – General & Administrative (G&A) – Other Statistics Capital Summary/Conclusion

Consolidated Enterprise Summary

Consolidated Enterprise 4 Highlights: Overall, Consolidated operating revenues exceeded the budget by 0.6%, with expenses 0.1% above budget. Connection Fees for 2,000 EDU/EMS through Q2 were less than expected compared to prior year of 2,388 EDU/EMS. G&A expenses below budget as IT projects are scheduled to occur in Q3 and Q4 Debt expense below budget due to low interest rates and debt restructuring during Q2.

Operating Services Summary

Water Services 6 Summary: 49,493 acre feet (AF) sold -0.2 % above budget Revenue was 0.7% below budget Total operating costs were $61.0 million versus $60.9 million for budget, or 0.1% above budget. Net Operating Revenue for Water System Capital Funding was $0.5 million below budget, at $5.4 million. Highlights / Key Variances: Lower Sales: Domestic water sales were $1.8 million below budget – Tier 3 and 4 sales were 649 AF lower than prior year (drought response) – Water budgets and allocations to be evaluated in coming months Higher Costs: Unanticipated rehabilitation to Wells 33 (Mountain) and 36 (Washington) of $0.5 million Imported water source shift (more CRA water)

Water Services (continued) 7

Sewer Services 8 Summary: Treatment flows were 45.1 million gallons per day (MGD), or 2.4 MGD below budget Sewer revenue was $38.3 million, and $1.3 million or 3.5% above budget Operating costs were 0.5% or $0.1 million over budget Net Operating Revenue for Sewer System Capital Funding was $1.2 million above budget, at $10.3 million. Highlights / Key Variances: Unplanned Maintenance costs were $0.2 million – Digesters cleaned at MVRWRF and TVRWRF – Tertiary pump repair at TVRWRF

Sewer Services (continued) 9

Recycled Services 10 Summary: 19,359 AF sold – 1.2% below budget Revenue was 4.0% below budget Operating costs were 2.9% or $0.1 million under budget. Net Operating Revenue for Recycled System Capital Funding was $0.1 million below budget, at $1.3 million. Highlights / Key Variances: Electricity expense was $0.1 million or 24.0% below budget – Conservative budget assumption

Recycled Services (continued) 11

General & Administrative 12 Highlights / Key Variances: (across all departments) Total G&A expenses were $1.3 million or 8.2% below budget

Other Statistics 13

Sewer Connections (EDUs) 14

Services Summary 15

Capital Operating Fixed Assets (OFA) Capital Improvement Program (CIP)

Operating Fixed Assets 17

Capital Improvement Program 18

Summary and Conclusions 19 For Second Quarter Fiscal Year : – Consolidated Enterprise results were strong: -Total operating revenue above target (by 0.6%) -Total expenses slightly above target (by 0.1%) – Water revenue below budget, consistent with drought response – Sewer system performed better than budget target – Recycled system performed below budget target – Connection fees substantially under forecast (25% lower than the prior four quarter average)

Contact Information Charles Turner Director of Finance (951) x

Allowance for Doubtful Accounts Trend 21