1. Consolidation of the Murrieta California Water District into the Western Municipal Water District November 2005

2. Outline Background on Western & MCWD Why Consider a Merger? The Process The Merger Analysis Lessons Learned

3. Western Municipal Water District

5. Why Merge? Possible Reasons to Merge –Larger District better able to solve complex problems Water Supply & Wastewater Collection –Rapid Growth, Aging Facilities –Possibly Better Service for Those Customers in Murrieta –Allows MCWD & WMWD to lower overhead costs to retail customers

6. Process Western Requested to Consider Merger by Murrieta County Water District Formed Joint District Ad Hoc Committee –2 Directors & GM from Each Agency –Formed a Public Blue Ribbon Committee Selected 6 Citizens from the Community Included to 2 Directors & GM’s

7. Process Developed an Agreement between District’s Filed an Application with LAFCO –Proposed methods to deal with: Operation/Overhead Costs Employees Service Agreements w/ Other Agencies Existing MCWD Board Proposed Merge Date – 12/1/05

8. Merger Analysis Hired Consultants in Different Disciplines –Water Supply –Operations –Water & Sewer Masterplanning –Water Quality –Operations –CFD Financing –Finances

9. Financial Impacts Labor Resources –16 employees w/ 9 in Office Overhead Savings –GM, AGM, Fin. Mgr., Attorney, Auditor, Office, –Approximately $1,000,000 over 5 Years Invest Savings in Needed Capital Facilities Reduced Risk of Lack of Water Supply Reduced Costs to All Retail Customers

10. Lessons Learned Two Previous Merge Attempts Failed Differences: –Motivation - Water Supply Peril –Support - Elected Officials Solidly Behind Merger –Goal – Better Service, Reduce Costs Larger District able to Secure Water Supplies