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Ji <br />Elk River -~-~ <br />Municipal Utilities <br />13069 Orono Parkway <br />Elk River, MN 55330 <br />May 2, 2005 <br />To: Elk River Municipal Utilities Commission <br />Jerry Takle <br />John Dietz <br />Jim Tralle <br />From: Br}pan Adams <br />Subject: Cash Flow Projections <br /> <br />phone: 763.441.2020 <br />Fax: 763.941.8099 <br />At last months' commission meeting, our auditors presented the results of their annual <br />utility audit. One of their comments was that staff continue the cash flow studies which <br />project future revenues and expenses to ensure we have adequate financial resources to <br />carry on business. Attached for your review are the updated Springstad cash flow studies <br />for both the electric and water departments. These studies are updated twice annually, <br />once after the audit and again during the budgeting process. <br />The result of this study is consistent with past studies, that being; our cash reserve <br />continues to rise with time for both departments. The trend is in the right direction. If <br />this trend is correct, we will be able to start funding from cash reserves for some of our <br />larger projects instead of bonding. <br />One trend we need to look at more closely is the rate of increase of the general and <br />administrative area. Both the electric and water departments are increasing faster than <br />the other areas. <br />