December 23, 2013

MISSION STATEMENT To maintain and enhance the quality of life in Kirkwood by providing our customers with safe, reliable, environmentally responsible services, and provide those services openly, efficiently, and cost effectively.

STRATEGIC GOALS  Reliable Services  Provided Openly  Provided Efficiently  Provided Cost Effectively  Environmentally Responsible

POTENTIAL RATE STRATEGY GOALS  Minimize rates to customers while still providing responsible service.  Establish rates and connection fees to plan for load growth and changes in the environment.  Maintain unencumbered cash reserves in the amount of six months of operating revenue.  Ensure that all enterprise funds are self-funding on a:  Cash basis (excludes depreciation to fund future Cap Ex)  Net income basis (includes depreciation for future Cap Ex)  Maintain a rate stabilization fund to minimize the rate impact of short term issues.

PROPERTY TAXES  Property Taxes are anticipated to total $834,000 for the 2013/14 Fiscal Year.  Traditionally, Property Taxes have been used to cover Operating losses and Capital expenses for all Governmental and Enterprise Departments.  In calendar year 2013, $350,760 or 42% of Property Taxes are allocated to electricity in order to make [TIER or OTIER] RUS requirement.

PROPERTY TAXES 2011 ALLOCATION

PROPERTY TAXES 2012 ALLOCATION

PROPERTY TAXES 2013 ALLOCATION

General & Administration G & A encompass all shared expenses of the District. Examples include administration salaries and wages, Board of Director costs, office supplies, and insurance. G & A expenses are tracked and then allocated to each fund. This allocation is based on historical tracking and experience.

G & A 2011 ALLOCATION

G & A 2012 ALLOCATION

G & A 2013 ALLOCATION

ENTERPRISE VS. GOVERNMENT FUNDS Enterprise Funds Are property-related fee based services. Must be of a measureable benefit to the property. Are often subject to Proposition 218 provision. Government Funds Are community related services. For the public good, regardless of ownership or occupancy. Property taxes have historically funded a majority of Government funds.

ENTERPRISE FUNDS  Water  Wastewater  Electric  Propane  Snow Removal  Solid Waste

WATER Rate History Base Rate$22.13$23.86 $24.99 Usage Rate$0.00$0.00 $4.00 Meter Charge$0.00$0.00$1.46 Connection Fee$1,916$1,916$1,916

WATER ($’s in 000’s) 2013 Revenues$337 EBITDA$101 G & A Allocations($119) Cash (EBITDA w/ G&A)($18) Interest($9) Depreciation($137) Net Profit/Loss($164) Projections: 2014/152015/162016/ Capital $25$67$20$52 Debt $589$530$471$409

WASTEWATER Rate History Base Rate$29.33$29.96 $30.31 Usage Rate$19.46$19.46$19.69 Meter Charge$0.00$0.00$1.84 Connection Fee$6,030$6,030$6,030

WASTEWATER ($’s in 000’s) 2013 Revenues $697 EBITDA $118 G & A Allocations ($248) Cash (EBITDA w/ G&A) ($130) Interest ($6) Depreciation ($340) Net Profit/Loss ($476) Projections: 2014/ /162016/172017/18 Capital$110$252$40$57 Debt $851$766$680 $591

ELECTRIC Rate History Base RateN/A$20.43 $20.67 Usage RateN/A$.52183$.5437 Meter ChargeN/A$2.94$2.94 Connection FeeN/A$1,992$1,992

ELECTRIC ($’s in 000’s) 2013 Revenues$4,081 EBITDA$1,314 G & A Allocations ($316) Cash (EDITDA w/ G&A)$998 Interest ($665) Depreciation ($1,020) Net Profit/Loss ($687) Projections: 2014/152015/ / /18 Capital $12 $4$4 $4 Debt $60 $59 $59 $59

PROPANE Rate History Base RateN/A$5.11 $5.17 Usage RateN/A$.0911$ Meter ChargeN/A$2.94$2.94 Connection FeeN/A$750$750

PROPANE ($’s in 000’s) 2013 Revenues $1,387 EBITDA $593 G & A Allocations ($201) Cash (EBITDA w/ G&A) $392 Interest ($58) Depreciation ($84) Net Profit/Loss $250 Projections: 2014/152015/ / /18 Capital $23$10 N/A N/A Debt $1,670 $1,669 $1,547 $1,545

SNOW REMOVAL ($’s in 000’s) 2013 Revenues $413 EBITDA $229 Cash (EBITDA w/ G&A) $135 G&A Allocations($94) Interest($8) Depreciation($78) Net Profit/Loss $8 Projections: 2014/152015/ / /18 Capital $23$15$135 $149 Debt $125$85$43 N/A

SOLID WASTE Rate History Base Rate$15.00$15.00 $15.00 Usage RateN/AN/AN/A

SOLID WASTE ($’s in 000’s) 2013 Revenues $122 EBITDA $36 G & A Allocations($36) Cash (EBITDA w/ G&A) $- Interest $- Depreciation($1) Net Profit/Loss($1) Projections:2014/ / / /18 Capital$10 N/A $10 N/A

GOVERNMENT FUNDS Fire Department / Parks & Recreation/ Mosquito Abatement ($’s in 000’s) 2013 Revenues $94 EBITDA($87) G & A Allocations($109) Cash (EBITDA w/ G&A)($196) Interest N/A Depreciation($24) Net Profit/Loss ($220) Projections: 2014/152015/ / /18 Capital $11 $11 $11 $11

Debt Service  RUS total debt is $38,975,000. It matures 12/31/2047. Interest rate is %. The entire amount is in the Electric Fund.  COP total debt is $4,998,825. It matures 12/30/2023. Interest rate is 2% - 4%. It is allocated to the Electric fund (38.3%), the Water fund (2.2%), the Propane fund (32.8%), and Capital expense (26.7%).  Caterpillar Loan total debt is $164, It matures 01/31/2017. Interest rate is 3.2%. The entire amount is in the Snow Removal fund.

Kirkwood Meadows Public Utility District Connection Fee Comparisons Utility Water Wastewater Electric Propane KMPUD$1,916$6,030$1,992$750 Donner Summit PUD$350$10,000 East Bay MUD$5,904$4,050 El Dorado Irrigation District$17,093$13,403 Incline Village GID$2,570$3,860 North Tahoe PUD$7,075$3,439 Sacramento MUD $1,500 Sierra Lakes County Water District$1,825$7,800 South Tahoe PUD$8,983$14,790 Squaw Valley Public Service$8,414$1,211 Trinity Public Utility District $1,505 Truckee Donner PUD$1,290-1,430 $2,546 Tuolumne Utilities District$985$5,599 Valley Springs PUD$3,500$7,130

POTENTIAL NEXT STEPS  Establish a minimum unencumbered operating cash balance.  Establish a minimum unencumbered capital reserve.  Establish a rate stabilization fund to minimize the impact of short term issues.  Set a goal of having enterprise funds be self- funding in a certain amount of time.  Keep rates as low as possible while striving for the above.  Maintain or improve current levels of services while striving for the above.  Suggestions?

QUESTIONS