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i <br /> 110 Elk River <br /> Municipal Utilities <br /> ' 13069 Orono Parkway phone: 763.441.2020 <br /> Elk River,MN 55330 Fax:763.441 8099 <br /> October 19, 2005 <br /> To: Elk River Municipal Utilities Commission <br /> ' Jerry Takle <br /> John Dietz <br /> Jim Tralle <br /> ' From: Bryan Adams <br /> ' Subject: Electrical & Water Financial Projections <br /> Twice annually we update our electric and water financial projections to ensure we have <br /> ' the necessary financial resources in the future. These times are at years end during the <br /> budgeting process and after the audit. Attached are the electric & water projections <br /> reflecting the 2006 budget assumptions. <br /> In summary, these financial projections reflect similar results as previous years. We <br /> continue to have adequate financial reserves with the assumptions made, although our <br /> ' cash reserves are thin in the next few years. The bottom line for both the electrical and <br /> water projections are highlighted reflecting the total cash balance. The financial <br /> projection in the later years of these studies should be viewed with some caution because <br /> ' they are very dependant on assumptions of sales growth rate, connect fees, capital <br /> projects, wholesale and retail rates changes. Your staff continues to be conservative in <br /> these assumptions. <br /> 1 <br />