2004-2005 Budget

MISSION STATEMENT
The mission of the El Toro Water District is to provide its customers a safe, adequate and reliable supply of water and wastewater service in an environmentally and economically responsible way.

FINANCIAL OBJECTIVES
Fiscal 2004-05
• Establish a revenue cash flow plan that is sufficient to fund the operating budget including the capital restoration and replacement program.
• Establish a reliable, stable and predictable rate adjustment strategy that minimizes impact to customers
• Establish and maintain a minimum reserve level sufficient to fund legal, board mandated and working capital requirements.
• Employ cost containment and reduction strategies and practices as appropriate to cost effectively maintain reliable service levels.
• Identify new and innovative opportunities to generate additional non-rate revenue.
• Monitor and proactively participate in local and statewide discussions regarding potential reductions in property tax revenue.

BUDGET ASSUMPTIONS
Fiscal 2004-05

Revenue:

• WATER SALES are based on the purchase of 11,000 acre-feet (af) of water and delivery of 10,700 af to customers. The average annual sales for the past five years, supports this level of sales.

• RECLAIMED WATER SALES are projected on the average annual guaranteed sales to the Golden Rain Foundation, which is 300 af.

• NON-RATE REVENUE reflects contractual services performed for other districts, shared maintenance of joint facilities, communication site leases and other miscellaneous revenues.

• PROPERTY TAX REVENUE represents our share of the 1% general property taxes. The Stand-by Fee initiated in the 1995-96 fiscal year amounts to $35.00 per equivalent dwelling unit.

• WATER & SANITATION RATE ADJUSTMENTS no rate adjustments have been proposed for the current fiscal year.

• OTHER CASH FLOWS includes anticipated proceeds from the 1994-95 sale of the Allen-McColloch Pipeline (AMP) to the Metropolitan Water District of Southern California (MET), the proceeds of the sale of capacity in the District’s R6 reservoir to Santa Margarita Water District, the return of unused funds from SOCWA and the use of reserves.

• INTEREST INCOME is expected to remain flat over the 04-05 year.

Expenses:

• ORGANIZATIONAL CHANGES are the result of restructuring in the operations departments.

• PURCHASED WATER costs are increased as a result of rate changes initiated by Metropolitan Water District and Municipal Water District of Orange County.

• SOCWA cost for regional treatment have decreased in both the area of operations and capital.

• OPERATING COSTS are projected at or below last year in most non-personnel categories. Budgeted personnel costs are projected to increase as a result of anticipated Cost of Living (COLA), merit increases, planned promotions and increases in the cost of medical and workers compensation insurance. Increases have been significantly offset by organizational changes noted above and increased employee contribution to the District provided employee & family medical plan.

CAPITAL RESTORATION & REPLANCE PROGRAM:

Ten-Year Capital Restoration & Replacement Program

Staff continues to assess the accuracy of the ten-year capital restoration & replacement program first developed in 1998. The long-range study was undertaken to determine the District’s financing needs. From this study a detailed five-year plan was developed. Expenditures of $2,161,076 are required for the 2004-05 fiscal year. Funding for the year will be supplied by (1) Revenues and cash flows from all sources and (2) Existing previously generated internal funds (reserves).

RESERVES:

The District maintains three types of reserves: (1) those legally required to be held as the result of contractual agreement (2) committed capital restoration & replacement program reserves for projects approved by the Board of Directors, (3) reserves that the Board deems to be in the best interest of the District to be maintained at or above a minimum levels and (4) working capital. The current minimum reserve level, established by Board policy, is $8.3 million. The District’s fiscal year 2004-05 Budget includes a provision to utilize reserves to fund a portion of the five-year Capital Restoration & Replacement Program.

Where the money comes from.

Where the money goes.

Water Rate Yearly Comparison Chart.

Yearly Income Statement Comparison 2002-2005.

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