4.1 ERMUSR 04-11-2017 - Laserfiche WebLink

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The results of the operations for the Water Fund in terms of cash flow and the breakdown of the cash balances for the past four years are as follows: Water Fund Cash Flows $3,000,000 $2,500,000 $2,000,000MEI $1,500,000 $1,000,000 I 11111 111111 1 $500,000 - za� $- 2013 Receipts 2013 2014 Receipts 2014 2015 Receipts 2015 2016 Receipts 2016 Disbursements Disbursements Disbursements Disbursements Operating costs ■Debt payments ■Operating receipts Water Fund Cash Balances $4,800,000 $4 367 165 $4,255,964 $4,200,000 $3,681,481 $3,600,000 '1 ' $3,000,000 .11111 $2,400,000 $1,800,000 Mill 11111111 $1,200,000 0111111 $600,000 $- 2013 2014 2015 2016 Unrestricted — Unrestricted designated reserve* *Unrestricted Designated Reserve:This reserve is established to address the short-term financial variability inherent in operating a Water Utility.Potential sources of this variability include but are not limited to:risks associated with natural disasters,reduction in overall customer usage,changes in total system usage resulting from the actions of large customers,failure to achieve budgeted levels of net income,changes in interest income,and general operational exposures. The target level for this reserve,included as the red line in the chart above,is 6 months operating expenditures less depreciation plus the sum of next year's total principal and interest payments.The balance above this target level shall be unrestricted. The cash provided by operating activities has remained strong and was sufficient to cover the amount of capital and debt needs in 2016.As mentioned in the analysis of the Electric fund it is important to continue to monitor future cash need with the use of a projection and capital improvement plan. People +Process. Going Beyond the -6- Numbers 72