1 Fork Union Sanitary District Financial Overview January 6, 2010 (Updated for May 5, 2010)

2 A Brief Overview of the Fork Union Sanitary District  Established as a Sanitary District in 1966  Intended to provide water to the Fork Union area specifically to those homes that had inadequate water supplies  The system was funded, initially, by the Federal Housing Authority through loans and grants  The water supply was initially from a water treatment plant on the James River

3 Intake Location on the James River

4 A Brief Overview (con’t)  The James River water treatment plant was damaged during Hurricane Camille in August  It was rebuilt and damaged again in June 1972 during Hurricane Agnes.  The Fork Union Military Academy helped the Sanitary District through the use of wells from the Academy to supply the customers with the loss of the James River Plant

5 Picture of Treatment Plant

6 Picture of Intake at River

7 A Brief Overview (con’t)  Wells have been used since the loss of the James River Treatment Plant  Over the years wells have been added and lost primarily due to contamination  The wells in the Sanitary District have high levels of iron and manganese  These minerals result in a rust colored water that does not work well in washing machines with white clothing

8 Picture of Water Treatment Plant

9 A Brief Overview (con’t)  Water treatment plants have been added at two of the largest producing wells in order to treat for the iron and manganese  The system had two standpipe tanks for storage that were built in 1968 and 1981  These tanks were replaced in 2005 with two elevated tanks in order to increase the storage capacity and the pressure on the system

10 Stand Pipe and Elevated Tank

11 Financial Overview  Recent Revenue and Expense History  Recent Rate History  Upcoming Fiscal Year Needs  Recommendations of the FUSD Advisory Board  Additional recommendations and timeline

12 Recent Revenue and Expense History in Tabular Form FY05FY06FY07FY08FY09 Revenue from Water Sales $ 276,496 $ 276,496 $ 289,266 $ 289,266 $ 311,086 $ 311,086 $ 319,310 $ 319,310 $ 278,482 $ 278,482 Expenses $ 271,779 $ 271,779 $ 284,333 $ 284,333 $ 285,578 $ 285,578 $ 341,284 $ 341,284 $ 343,807 $ 343,807 Net Reserve (or Loss) for Year $ 4,717 $ 4,717 $ 4,933 $ 4,933 $ 25,508 $ 25,508 $ (21,974) $ (21,974) $ (65,325) $ (65,325)

13 Recent Revenue and Expense History in Chart Form

14 Rate History of FUSD  The Water Usage Rates have had three tiers for the last 29 years  The base service rate is the minimum charge and includes the first 2000 gallons of water usage  The next tier is for water used up to 300,000 gallons  The highest tier is for water used over 300,000 gallons

15 Rate History (con’t) Base Rate $ 6.50 $ $ $ Rate for each 1000 gallons up to 300,000 gallons $ 1.50 $ 2.00 $ 5.83 $ 7.00 $ 7.35 $ 7.72 Rate for each 1000 gallons over 300,000 gallons $ 1.00 $ 3.00 $ 3.60 $ 3.78 $ 3.97

16 Rate History (con’t)

17 Rates in Surrounding Jurisdictions Monthly Rate of Household Using 5000 gallons Albemarle County Service Authority $ $ Buckingham County $ $ Charlottesville $ $ Goochland County $ $ Gordonsville $ $ Louisa County Water Authority (Zion crossroads) $ $ Town of Louisa $ $ Lake Monticello $ $ FUSD (Current) $ $ 38.60

18 Current Fiscal Year Needs  This fiscal year is projected to finish with the following revenue and expenses:  Revenue $286,000  Expenses$326,000  Net Reserve or (Loss)($ 40,000)  The cash balance has been used up over the last two fiscal years and this slow negative cash flow each month has already started to send this fund into the red!

19 What has happened?  Revenue has been reduced by the loss of Creative Interiors, and the reduction in use of water by the three largest users VEPCO, FUMA and the Nursing Home  In the last two years significant repairs have been needed to the aging system. These included pump replacements, vehicle replacement, large section of pipeline replacements, settling basin upgrades  The result is a negative cash flow and a reduction of cash in the bank

20 Alternative Tables of Rate Increases  Current Rate  Flat 5% Increase ($14,000 increase in revenue)  Flat 10% Increase ($28,000)  Flat 15% Increase ($42,000)  Flat 10% in small users and a 50% increase on the large user rate ($37,500)  Flat 10% in small users and a 75% increase on the large user rate ($43,500)  Flat 10% in small users and a 100% increase on the large user rate ($52,700)

21 FUSD Advisory Board  The Fork Union Sanitary District Advisory Board met this year to review the rates  Several scenarios where evaluated  The FUSD Advisory Board reviewed these scenarios and made a recommendation of an across the board 10% increase  They revisited this decision and made a more recent recommendation of an across the board 15% increase

22 Estimated Revenue Based on Flat 15% Increase CategoryUsage RateMonthly Average UsageExtended Amount Monthly Minimum Charge $ $ 7, Usage Rate Less Than 300,000 gal/month $ 8.881,900,000 $ 16, Usage Rate More Than 300,000 gal/month $ ,000 $ 2, Amount of Increase Total Monthly Billings (Average) $ 26, Total Estimated Annual Revenue Using an Average Monthly Revenue $ 321, $ 41, Average Bill for a household 5,000gallons $ Monthly Increase for a typical household using 5000 gallons/month $ 5.79