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The results of the operations for the Electric Fund in terms of cash flow and the breakdown of the cash balances for the
<br /> past four years are as follows:
<br /> Electric Fund Cash Flows - Excluding Refunding Bonds
<br /> $40,000,000
<br /> $35,000,000 PIIIIIIIIMII
<br /> $30,000,000
<br /> :: t::
<br /> ....i.
<br /> .... ' rei.,11;:17,64.13.i'l'H,:::::
<br /> ._
<br /> $15,000,000 ;;
<br /> $10,000,000 '- all t 't 're?5'.:
<br /> I: 1111111
<br /> $5,000,000 a [Z- '
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<br /> 201� 202016201
<br /> ■Operating costs I Debt payments ■Operating receipts
<br /> Electric Fund Cash Balances
<br /> $16,000,000 _
<br /> $14,680,691
<br /> $14,000,000 —$13,175,626
<br /> $13,803,692
<br /> $13,175,626
<br /> $12,000,000 $12,097,110
<br /> $10,000,000 IIIII
<br /> $8,000,000
<br /> $6,000,000
<br /> $4,000,000
<br /> 1111
<br /> $2,000,000 —
<br /> $- , , I I
<br /> 2014 2015 2016 2017
<br /> iii Unrestrictedr--------
<br /> mom for debt service (bond covenents)
<br /> Unrestricted designated reserve*
<br /> i
<br /> * Unrestricted designated reserve: established to address the short-term financial variability inherent in operations.
<br /> Potential sources of this variability include risks associated with natural disasters, reduction in overall customer usage,
<br /> changes in total system usage resulting from the actions of large customers, failure to achieve budgeted levels of net
<br /> income, changes in interest income, and general operational exposures.
<br /> The target level for this reserve, included as the red line in the chart above, is the sum of six months operating
<br /> expenditures less depreciation and less purchase power costs, plus the sum of next year's total principal and interest
<br /> payments, plus one month budgeted average purchase power cost. The balance above this target level shall be
<br /> unrestricted.
<br /> The cash provided by operating activities has remained strong and was sufficient to cover the amount of
<br /> capital and debt needs in 2017. We recommend that the Utilities continue to closely monitor future cash
<br /> flow with the use of projections and the capital improvement plan. 111()I.11
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