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Projected Operating Results – Existing Rates <br />- 5 - <br />2-2. A summary presentation of the historical and projected operating results is also <br />shown in Exhibit 2-A. <br />Table 2-2 <br /> Projected Operating Results-Water <br />Existing Rates <br />Fiscal Year 2025 2026 2027 2028 2029 <br />Operating Revenues $3,153,746 $3,153,746 $3,153,746 $3,153,746 <br />Less Operating <br />Expenses (4,127,970) (4,322,616) (4,454,230) (4,871,800) <br />Plus Non -Operating <br />Revenue 574,568 567,013 412,725 239,366 <br />Plus Fees and Transfers 304,925 438,925 438,925 438,925 <br />Change in Net Position(1) $500,000 $(94,732) $(162,932) $(448,833) $(1,039,762) <br />Net Position as Percent <br />of Revenues -3.0% -5.2% -14.2% -33.0% <br />(1) 2025 EOY change in net position estimated by ERMU staff based on 2025 YTD actual results <br />Cash Reserves <br />A summary of the impact of the projected operating results on ERMU’s cash reserves for <br />the Study Period is shown at the end of Exhibit 2-A and in Table 2-3 below. The 2025 <br />end of year reserve balance is as estimated by ERMU staff based on 2025 YTD results. <br />As shown below, under existing retail rates and estimated revenue requirements over the <br />Study Period, the unrestricted cash reserves for the water utility are projected to decrease <br />from $10.5 million to $6.8 million by the end of the Study Period. ERMU has a newly <br />revised reserve policy that sets a minimum target for reserves equal to 2 months operating <br />expenses plus $8 million catastrophic reserve plus a capital reserve equal to average <br />annual capital expenses plus the next year’s principal and interest expense. Based on <br />97