1. City of East Point FY 2012 Budget Presentation

2. Comparison of FY11 vs. FY12 Budget Policies Proposal FY 11 TotalFY12 O&M Changes FY11 Current Budget 94,652,326 96,762,688 2,110,362 Policy Changes: A&G Allocation 2,923,850 4,103,523 1,179,673 Net Change 97,576,176 100,866,211 3,290,035 Proposed Changes to Budget: Franchise Fee 3,692,057 Debt Service (Water & Sewer) 3,679,495 Depreciation 5,788,000 MEAG Wholesale Cost 4,338,359 Capital Leases 186,553 97,576,176 118,550,675 17,684,464

3. FY2011-2012 Budget at A Glance The overall proposed Operating Budget amount: $118,541,838 (22% increase from FY 2011 Overall, but a baseline increase of only 3%) General Fund: $33,687,097—0.19% increase; Electric Utility: $42,244,139— 22% increase; Water Utility: $26,728,291— 69% increase; Solid Waste: $4,467,911— 29% increase; Storm Water: $670,710 — (New Utility); Other Funds: $10,743,690— 7% increase

4. Budget Preparation The preparation of the Fiscal Year 2011 Budget was a challenge to compensate for the loss of significant property tax revenues combined, with sharp increases in utility wholesale supply cost and debt service. The Fiscal Year 2012 Budget includes the Implementation of the following financial policies: The allocation of Administrative & General expenses to the utilities relieving the indirect subsidy from the General Fund. The accommodation of a significant increase in Water & Sewer debt service approaching $3.7 million. The inclusion of capital leases necessary to fund the capital purchases during fiscal year 2011. The inclusion of a 5% franchise fee on the utilities which equates to the franchise fee levied on private sector utilities. The funding of depreciation in order to provide the resources necessary for the capital improvements necessary to sustain the utility systems. The above policies are incorporated in the Electric and Water & Sewer cost of service studies which form the basis of the utilities’ fiscal year 2012 budgets.

5. Budget Highlights Proposes a reduction in our Millage Rate from 14.75 to 12.75 Reduction in TAN dependence from $8 Million to $6 Million annually Utility Rates  This budget does assumes an increase in utility rates due to wholesale costs and debt service  We propose the use of $1 Million to continue subsidizing our utility costs for residential customers, but lowering the margin of loss for the City (Use of Year End Settlement & proceeds from sale of lowsides) Continued investment in capital items and projects as contained in the Capital Budget.

6. FY2012 Proposed Capital Budget $2,302,051 have been proposed using MEAG MCT-funding for General Fund capital improvements Capital requirements of the utilities will be funded through the cash produced from depreciation. The policy changes inherent in the cost of service study are critical to maintaining a strong capital replacement program for healthy utilities.