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/j <br />Elk River <br />Municipal Utilities <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />November 2, 2007 <br />To: Elk River Municipal Utilities Commission <br />Jerry Takle <br />Jerry Gumphrey <br />Jim Tralle <br />From: Bryan Adams <br />Subject: Cash Flow Projections <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />Twice annually we update our electric and water financial projections to ensure we have the <br />necessary financial resources in the future. These times are at year's end during the budget <br />process and after the audit. Attached are the electric and water projections reflecting the 2008 <br />budget assumptions. <br />In summary, these financial projections reflect similar results as previous years. In the water <br />department, the cash reserves level off at about $3,000,000 depending upon how much we desire <br />to use from reserves to pay for future wells. In 2011 and 2015 we are starting to use reserves to <br />pay for water tower and well construction. The large growth years for the water department <br />should be ending in the 2015 time. Four of our bond issues will also be paid off by this time <br />frame as well. <br />Our previous goal in the electric department is to add approximately $250,000 annually to our <br />reserves until we achieve approximately $3,500,000. This will allow us approximately three <br />months operating reserves. This will be achieved in approximately the 2013 time frame. <br />