Discussion and Consideration of Action to Recommend that the Board Approve the Proposed CAP Biennial Budget for Calendar Years 2018 and 2019

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1 CONTACT: Doug Dunlap Gary Given (623) (623) MEETING DATE: October 24, 2017 FAP Agenda Number 4 AGENDA ITEM: Discussion and Consideration of Action to Recommend that the Board Approve the Proposed CAP Biennial Budget for Calendar Years 2018 and 2019 RELEVANT POLICY, STATUTE OR GUIDING PRINCIPLE: 2016 CAWCD Board of Directors Strategic Plan Finance: Maintaining CAP's Financial Health Finance: Effectively communicate financial issues to Board and stakeholders Project Reliability: Effectively Operate and Maintain CAP Assets STAFF RECOMMENDATION: The District s Biennial Budget has been provided to the Board. Staff is proposing that the Finance, Audit, and Power Committee recommend that: (a) The Proposed 2018 and 2019 Budget be submitted for approval to the Board of Directors; and (b) The Board of Directors delegate to the General Manager authority to execute the approved operating and capital budget within parameters set by the Board. BUDGET IMPLICATIONS: Are budget funds required? Yes X No Amount: (Dollars in Millions) Total Revenues $377.9 $392.2 Total Expenses $278.5 $288.6 Capital Expenditures $ 37.6 $ 23.1 PREVIOUS BOARD ACTION/ACTIVITY: The Finance, Audit, and Power Committee reviews the Proposed Budget biennially at its October meeting (odd-numbered years) and is asked to make a recommendation to the Board for approval. If the Committee makes a recommendation, the Board reviews the Recommended Budget biennially at its November meeting (odd-numbered years) and issues an Approved Budget. The Board will be asked to approve the Budget at either its November 2017 or December 2017 meetings. In November 2018, the Board may review and consider for approval an amendment to the 2019 budget for items that have significantly

2 changed and will cause budgetary control parameters to be exceeded. June 8, 2017 The Board approved the Final Rate Schedule June 8, 2017 The Board established the 2017/2018 ad valorem tax rate at $0.10 per $100 assessed valuation June 8, 2017 The Board established the 2017/2018 water storage tax rate at $0.04 per $100 assessed valuation October 12, 2017 An overview of the Biennial Budget was presented at a Stakeholder workshop ISSUE SUMMARY/DESCRIPTION: The proposed Biennial Budget for was provided to the Committee and posted on the District's website by October 2, All of the financial information contained in the Budget, whether it is summary information, revenues, expenses, staffing, fund detail or group/department information, is presented using a five-year comparison: 2015 and 2016 actual data, the 2017 projection and the 2018 and 2019 budget. Although the Budget is a comprehensive document, some summary information is presented below. Revenues (Millions) 2017 Projection 2018 Budget 2019 Budget 18 vs 17 Incr/(Decr) 19 vs 18 Incr/(Decr) Water O&M Charges $194.0 $204.3 $206.7 $10.3 $2.4 Capital Charges Power & Other BDF Property Taxes Interest Income Other Revenues Total Revenues $329.9 $377.9 $392.2 $48.0 $14.3 Water Deliveries and Water O&M Charges (Revenues) Water deliveries in 2018 and 2019 are budgeted at 1.44 million acre-feet for each year. This is net of 192 thousand acre-feet for anticipated shortage mitigation. Associated water O&M charges are expected to be $10.3 million higher in 2018 and $2.4 million higher in The increase in 2018 is mainly due to increased deliveries. Capital Charges The 2018 increase of $9.2 million is mainly associated with the increase of the capital charge rate to cover the estimated federal debt make-up payment. No Non-Indian Ag Reallocation is planned in the budget, which would impact capital charge revenue. Power and Basin Development Fund (BDF) Revenues Power and BDF revenues are projected to be fairly flat in 2018 and 2019 as compared to The slight increase is a result of increased net revenue on surplus power sales due to the reduction of NGS maintenance and capital spending as the plant is anticipated to shut down by the end of Property Taxes The 2018 and 2019 budget reflects maintaining the general ad valorem tax at $0.10 per $100 of assessed valuation and the water storage tax rate at $0.04 per $100 of assessed valuation. The $0.02 of the water storage tax that is being utilized for the Ag Consideration in the 2017/2018 tax year is not planned to continue in the 2018/2019 tax year. The 2018 increase is due to significant tax transfers to the Arizona Water Bank Authority (AWBA) in 2017 for long-term storage credit purchases, which reduced 2017 tax revenue.

3 The budget does not include any transfers as it is an annual Board decision what amount, if any, to establish for AWBA LTSC purchases. Interest/Gain (Loss) Income The interest income is primarily from investments held by the Arizona State Treasurer. Other Income Mainly CAGRD revenue, which increases as a result of some increase in both rates and obligation volume. Expenses (Millions) 2017 Projection 2018 Budget 2019 Budget 18 vs 17 Incr/(Decr) 19 vs 18 Incr/(Decr) Pumping Power $94.9 $91.2 $89.7 ($3.7) ($1.5) Transmission Salaries & Related Costs Amortization & Depreciation Interest Expense Other Costs (0.4) 5.8 Total Expenses $275.7 $278.5 $288.6 $2.8 $10.1 Pumping Power Decreased operating costs per MWH at the Navajo Generating Station (NGS) due to the reduction of NGS maintenance and capital spending as the plant is anticipated to shut down by the end of Salaries and Related Costs The proposed budget includes average full-time equivalent (FTE) employees for each year. To adjust for unfilled positions throughout the year, the 2018 and 2019 budget includes a vacancy/salary reduction adjustment of 15 FTEs. Interest Expense This is the interest on the federal repayment obligation, the revenue bonds that were issued for transmission and the budgeted CAGRD $50 million bond issue. Capital Budget Capital expenditures for 2018 and 2019 are budgeted at $37.6 million and $23.1 million, respectively. Significant projects include: Mark Wilmer circuit breaker replacement; electromechanical replay replacement; fire protection systems at Brady, Picacho, Red Rock, Black Mountain and Snyder Hill; HVAC (Air Conditioning) replacement at Twin Peaks and Sandario; siphon stop logs at Cunningham, Gila, and Santa Cruz; and finishing the APS and Hassayampa Tap transmission projects. CAWCD continues to rely on the Project Steering Committee to closely review and monitor projects. SUGGESTED MOTION: I move that the Finance, Audit, and Power Committee recommend that: (a) The Proposed Biennial Budget be submitted for approval to the Board of Directors. (b) The Board of Directors delegate to the General Manager the authority to execute the approved operating budget and to approve expense variances per budgetary controls as set forth in the budget. (c) The Board of Directors delegate to the General Manager the authority to execute the approved capital budget and to approve budget variances for total capital spending up to 102% of the annual budget.

4 FAP Agenda Number 4 Finance, Audit & Power Committee October 24, 2017 Doug Dunlap Ryan Johnson Gary Given Agenda o Key Budget Messages o Assumptions o Staffing o Water Deliveries o General Fund Overview o General Fund Revenues o General Fund Expenses o Periodic or Variable Programs o Extraordinary Maintenance Projects o Capital Expenditures o Capital Improvement Projects Overview o Rate Reconciliation o Strategic Reserves o CAWCD Recharge Program o CAGRD Account o Captive Fund o Supplemental Water Account o Total CAWCD 2018/2019 Budget FAP Committee 10/24/

5 Key Budget Messages o All essential work for 2018/2019 is included in the budget o Programs with a periodic or variable cost (e.g. MSCP, elections) account for approximately $7.6 million expense in 2018 and $7.3 million in 2019 o Extraordinary Maintenance projects are $1.3 million in 2018 and $8.2 million in 2019 o Minimal change in staff headcount (FTE) from /2019 Budget FAP Committee 10/24/ Key Budget Messages (cont.) o Capital expenditures are below advisory levels from previous forecasts due to a rebalancing of staff assigned to asset modifications (expense) and capital projects Falling below Big R rates Driving increase in Fixed O&M costs o Budget is $1.72/ acre-foot over firm water delivery rate in 2018 and $3.73 under advisory water delivery rate in 2019 o Strategic reserves get to target in /2019 Budget FAP Committee 10/24/

6 Assumptions o o o o CAP will deliver (excluding credits): 1,366,884 a/f in ,440,620 a/f in ,440,620 a/f in includes 80,000 a/f Gila River Indian Community and 10,800 a/f Tohono O odham Nation forbearance and all other forbearance programs 2018 & 2019 include 192,000 a/f of forbearance including Ag programs No impacts from Non-Indian Ag reallocation incorporated 2018/2019 Budget FAP Committee 10/24/ Assumptions (cont.) o o o Tax rates included at $0.10 for the general ad valorem and $0.04 for the water storage tax $0.02 of water storage tax transferred to cover Ag consideration for 2017/2018 tax year only No water storage tax transfers to AWBA for credit purchases incorporated into the budget Annual decision in December CAGRD $50 million CAGRD Bond issuance contemplated in June 2018 Membership dues continued for budget period 2018/2019 Budget FAP Committee 10/24/

7 Assumptions (cont.) o o o o o Budget was built up from Department detail No contingencies built into budget Average salary increases budgeted at 3% each year Energy Anticipates NGS closure in 2019 Assumes there will be $500,000 revenues from Shaping and Displacement in each year Transmission higher due to ending of previous credit and new Hoover contract in 2017, included in rate update 2018/2019 Budget FAP Committee 10/24/ Staffing (Year-End Full Time Equivalents) General Manager Legal Services Finance & Administration Public Affairs Water Policy Deputy General Manager Centralized Maintenance & Reliability Employee Services Maintenance Operations & Engineering Technology Total FTE - Actual/Projected Vacancy estimate (3.5) (15.0) (15.0) Net FTE - Actual/Projected /2019 Budget FAP Committee 10/24/

8 Water Deliveries (excluding credits) Water Deliveries (Acre-feet in Thousands) , , , , , M&I Agricultural Water Federal Underground Storage /2019 Budget FAP Committee 10/24/ General Fund ($ Millions) 2015 Actual 2016 Actual 2017 Projection 2018 Budget 2019 Budget Operating Revenues Water operations & maintenance charges $ $ $ $ $ Water service capital charges Power & Basin Development Fund revenues Reimbursements and other revenues Total Operating Revenues Operating Expenses Salaries and related costs (55.2) (59.4) (63.0) (64.4) (67.0) Pumping power & Capacity Charges (100.2) (96.3) (94.9) (91.2) (89.7) Transmission (6.8) (5.1) (11.4) (13.1) (13.5) Amortization of permanent service right (23.0) (23.0) (23.0) (23.0) (23.0) Depreciation (19.8) (21.6) (21.9) (25.3) (27.2) Other operating expenses (23.4) (82.5) (33.9) (32.8) (38.5) Total Operating Expenses (228.5) (287.9) (248.0) (249.8) (258.9) Operating Income/(Loss) $ (16.6) $ (78.2) $ (0.7) $ 16.8 $ 14.2 Non-operating Revenues/Expenses Property taxes Interest income and other revenues Interest expense and other expenses (25.4) (24.9) (23.6) (22.2) (22.3) Total Non-operating Income/(Loss) Change in Net Position $ 21.6 $ (33.4) $ 31.1 $ 71.9 $ /2019 Budget FAP Committee 10/24/

9 General Fund Revenues $ Millions Water operations & maintenance charges Water service capital charges Power & Basin Development Fund revenues Property Taxes Interest & Other 2015: $ : $ : $ : $ : $ /2019 Budget FAP Committee 10/24/ General Fund Expenses $ Millions Pumping Power & Salaries and Amortization/Depr Transmission Capacity Charges related costs eciation Interest expense Other expenses 2015: $ : $ : $ : $ : $ /2019 Budget FAP Committee 10/24/

10 Periodic or Variable Programs (Thousands) Colorado River programs-including pilot system conservation, weather modification & climate change research Resource Planning- including recovery feasibility and demand studies 2017 Projection 2018 Budget 2019 Budget $ 669 $ 1,558 $ 1,558 $ 183 $ 323 $ 413 Pumping Plant Arc Flash Studies $ - $ 368 $ 320 Board elections $ - $ 1,200 $ - Multi-Species Conservation Program (MSCP) $ 3,079 $ 4,158 $ 4,967 Total $ 3,931 $ 7,607 $ 7, /2019 Budget FAP Committee 10/24/ Extraordinary Maintenance Projects (Thousands) 2017 Projection 2018 Budget 2019 Budget Manifold Relining at LHQ & Hassayampa $ - $ 996 $ 1,148 Siphon Repairs at Salt River $ - $ 325 $ 6,845 Discharge Lines & Manifolds Recoat at Waddell $ - $ - $ 227 Steel Discharge Line Recoat-Mark Wilmer $ 5,351 $ - $ - Total $ 5,351 $ 1,321 $ 8, /2019 Budget FAP Committee 10/24/

11 Capital Expenditures ($ Million) 2015 Actual 2016 Actual 2017 Projection 2018 Budget 2019 Budget Capital Improvement Program Capital Equipment Total o 2018/2019 capital budget at $60.7 million o Spending is below Big R published rates o The Capital Improvement Program(CIP) includes 27 projects with more than 80% of spending associated with14 projects (on following page) o Capital budget is managed by the Project Steering Committee (PSC) 2018/2019 Budget FAP Committee 10/24/ Capital Expenditures Detail ($ Million) Budget Page Total Project Cost 2018 Budget 2019 Budget Backup Power System Replacements at Checks, Turnouts & Microwave Sites 6-11 $ 5,986 $ 1,282 $ 1,417 Circuit Breakers and Compressed Air System Replacement at Mark Wilmer ,179 1,056 1,794 Condition-Based Monitoring , Electromechanical Relay Replacement - Phase ,912 2,985 2,660 Elevator System Replacement - Phase , ,180 Fire Protection at Brady, Picacho, Red Rock, Black Mountain & Snyder Hill ,344 6, Governor Controls Replacement at Waddell ,725 1,062 1,366 HVAC Replacement at Twin Peaks & Sandario ,554 2,425 - Motor Exciter and Control Unit Replacement at various pumping plants ,565 1,967 3,049 Siphon Stop Logs at Cunningham, Gila & Santa Cruz ,489 2, Transformer Replacement at McCullough , Transmission Line APS & Hassayampa Tap Connection ,955 6,183 - Transmission Line Rebuild ED2 to Saguaro ,990 1,211 - Transmission Line Valencia to Black Mountain ,171-1, /2019 Budget FAP Committee 10/24/

12 Capital Improvement Projects Overview Highlighted Projects Mark Wilmer Pump Unit Circuit Breaker Replacements Electromechanical Relay Replacements Fire Protection Systems at Brady, Picacho, Red Rock, Black Mountain, Snyder Hill HVAC (Air Conditioning) Replacement at Twin Peaks, Sandario Siphon Stop Logs at Cunningham, Gila, and Santa Cruz Salt River Siphon Repair (Extraordinary Maintenance) 2018/2019 Budget FAP Committee 10/24/

13 Mark Wilmer Pump Unit Circuit Breaker Replacements Project Scope o Phase 1 - Replace air compressor system o Phase 2 Replace all six air-blast circuit breakers with new insulated breakers Unit Circuit Breaker in Open (off) Position, 13.8 KV Circuit Breaker Replacement on Unit 2 at Mark Wilmer 2018/2019 Budget FAP Committee 10/24/ Mark Wilmer Pump Unit Circuit Breaker Replacements Compressed Air System at Mark Wilmer New Sauer Compressor System at Mark Wilmer 2,500 PSI 2018/2019 Budget FAP Committee 10/24/

14 Mark Wilmer Pump Unit Circuit Breaker Replacements Project Schedule o 2016 Install Air Compressor o 2017 Unit 2 Circuit Breaker o 2018 Unit 1 Circuit Breaker o 2019 Units 5 and 6 o 2020 Units 3 and 4 Project Budget o $7.18 million New ABB Insulated Circuit Breaker Hoisted Into Place at Mark Wilmer, Unit 2 New ABB Insulated Circuit Breaker Installed Into Existing Cubicle 2018/2019 Budget FAP Committee 10/24/ Electromechanical Relay Replacement Project Scope o Replace electromechanical relays at all CAP Pumping Plants o Address equipment obsolescence and age o Provide digital relays with monitoring and notification capability o Digital relays will take the place of approximately 1,500 electromechanical relays New Digital Relay Rear View New Digital Relay Front View 2018/2019 Budget FAP Committee 10/24/

15 Electromechanical Relay Replacement Salt Gila Units 3 & 4 Old Relays Salt Gila Units 3 & 4 New Relay Installation 2018/2019 Budget FAP Committee 10/24/ Electromechanical Relay Replacement Project Schedule o 2017 Complete relays for Units at 7 plants o Complete relays for units and transformers at Brady, Picacho and Red Rock o Complete remaining unit and transformer relays: o Waddell o Mark Wilmer o West Plants o South Plants Project Budget ( ) o $7.91 million Remove and Replace Electromechnical Relays with New Digital Relays 2018/2019 Budget FAP Committee 10/24/

16 Fire Protection System at South Plants Project Scope o Upgrade equipment and systems responsible for life safety and equipment reliability o Five pumping plants: Brady, Picacho, Red Rock, Snyder Hill, and Black Mountain 2018/2019 Budget FAP Committee 10/24/ Fire Protection System at South Plants Fire Scenario Modeling Pump Units at Black Mountain Pumping Plant Fire Pump Control Panel Typical Fire Pump Installation 2018/2019 Budget FAP Committee 10/24/

17 Fire Protection System at South Plants Existing Fire Control Panel Existing Deluge Sprinkler Piping Existing Fire Pump 2018/2019 Budget FAP Committee 10/24/ Fire Protection System at South Plants Project Schedule o 2017 Red Rock Design o 2018 Red Rock Construction & Design Remaining Plants o 2019 Finish Construction at Remaining Plants Project Budget o $7.34 million Existing Halon Tanks to be Replaced with New Fire Suppression Agent 2018/2019 Budget FAP Committee 10/24/

18 HVAC Replacement at Twin Peaks and Sandario Project Scope o Replace existing, modular water cooled air conditioning systems o Two plants: Twin Peaks and Sandario o End of 20-yr service life Existing Water Cooled Air Conditioning Unit at Twin Peaks 2018/2019 Budget FAP Committee 10/24/ HVAC Replacement at Twin Peaks and Sandario Interior View of a Typical Multi Tube Heat Exchanger 2018/2019 Budget FAP Committee 10/24/

19 HVAC Replacement at Twin Peaks and Sandario Raw Water Supply Sediment 2018/2019 Budget FAP Committee 10/24/ HVAC Replacement at Twin Peaks and Sandario Raw Water Supply Debris 2018/2019 Budget FAP Committee 10/24/

20 HVAC Replacement at Twin Peaks and Sandario Plugged Heat Exchanger Tubes to Avoid Rupture 2018/2019 Budget FAP Committee 10/24/ HVAC Replacement at Twin Peaks and Sandario Condenser System Prone to Fouling 2018/2019 Budget FAP Committee 10/24/

21 HVAC Replacement at Twin Peaks and Sandario New Air Conditioning Units at Snyder Hill 2018/2019 Budget FAP Committee 10/24/ HVAC Replacement at Twin Peaks and Sandario Project Schedule o 2017 Design 100% in August o 2018 Complete Construction in May Project Budget ( ) o $3.55 million New Interior Plant Duct Work 2018/2019 Budget FAP Committee 10/24/

22 Siphon Stop Logs Cunningham Wash Siphon (3,700 long, 21 diam.) Gila River Siphon (3,200 long, 19 diam.) Project Scope o Install stop log guides at Siphon outlets o Provide ability to isolate and inspect siphons o Three siphon locations: Cunningham Wash, Gila River, and Santa Cruz River Santa Cruz River Siphon (8,300 long, 13 diam.) 2018/2019 Budget FAP Committee 10/24/ Siphon Stop Logs Stop Log & Guides at Siphon Outlet 2018/2019 Budget FAP Committee 10/24/

23 Siphon Stop Logs Cunningham Wash Underground Siphon Crossing Typical Siphon Outlet without Stop Log Guides 2018/2019 Budget FAP Committee 10/24/ Siphon Stop Logs Underwater Grouting of Stop Log Guides Underwater Stop Log Guide Installation 2018/2019 Budget FAP Committee 10/24/

24 Siphon Stop Logs 1 2 Stop Log and Bubble Log Installation Sequence /2019 Budget FAP Committee 10/24/ Siphon Stop Logs Project Schedule o 2017 Design and Contractor Selection o 2018 Construction contract approval and award, complete construction phase Project Budget ( ) o $2.5 million Interior View of Stop Log Installation 20 height Maintenance Inspection in Dewatered Siphon 2018/2019 Budget FAP Committee 10/24/

25 Salt River Siphon Repair Project Scope o Inspect and repair areas of corrosion, failed coating, and abrasion o Dewater, confined space access, surface preparation, and recoating o 21-foot diameter, 8,700 feet long Buried Salt River Siphon Alignment Salt River Siphon Construction 2018/2019 Budget FAP Committee 10/24/ Salt River Siphon Repair Inlet Elevation 1483 Outlet Elevation feet Bottom Elevation /2019 Budget FAP Committee 10/24/

26 Salt River Siphon Repair Evacuation Structure in Blow Off Mode 2018/2019 Budget FAP Committee 10/24/ Salt River Siphon Repair Opening Manholes and Setting Pumps to Remove Water 2018/2019 Budget FAP Committee 10/24/

27 Salt River Siphon Repair During Dewater Schedule Fish Removal Phase Before Work Can Begin 2018/2019 Budget FAP Committee 10/24/ Salt River Siphon Repair Define Scope of Repair Work and Extent of Corrosion on Welded Seams 2018/2019 Budget FAP Committee 10/24/

28 Salt River Siphon Repair Ultra High Pressure Surface Preparation 2018/2019 Budget FAP Committee 10/24/ Salt River Siphon Repair Hand Applied Coating at Welded Joints and Corrosion Areas 2018/2019 Budget FAP Committee 10/24/

29 Salt River Siphon Repair Project Schedule o February September 2017 o Customer/stakeholder coordination, o Define 6-week window o Coordinate with SRP o PSC approves project plan o 2018 o Contractor selection o Design consultant selection o Partial inspection o 2019 o Construction bidding & negotiation o Construction Board approval o Mobilization o Construction phase: October 30 th December 10 th Project Budget ( ) o $7.2 million 2018/2019 Budget FAP Committee 10/24/ Transmission Capital Project Provide System Reliability ED2 to Saguaro PV to Morgan Transmission Line 2018/2019 Budget Review 10/12/

30 Major Transmission Projects Driving $50M Bond Financing ($ Millions) Pre Total Project Budget Budget Project Costs Cost PV to Morgan $ 27.6 $ 2.1 $ - $ 29.7 Hassayampa Tap Connection Rebuild ED2 to Saguaro Total Costs $ 47.0 $ 7.4 $ 0.6 $ 55.0 $50M Bond Funds Spent by 1st Quarter 2019 All Transmission Projects are Cost Share 2018/2019 Budget Review 10/12/ Follow-On Transmission Related Projects Double Cost Share Opportunities ($ Millions) Post-2019 Total Budget Budget Project Costs Project Cost Valencia to Black Mountain $ - $ 1.2 $ - $ 1.2 Transformer Replacement at McCullough Total Costs $ - $ 1.6 $ 2.9 $ 4.5 Valencia to Black Mountain: Improve redundancy & reliability on older, wood pole, radial transmission line Transformer Replacement at McCullough: Replace CAP's oldest & largest transformer, which has no back-up 2018/2019 Budget Review 10/12/

31 Rate Reconciliation CALCULATION OF RECONCILED WATER RATES Budget Published Rate Budget Advisory Rate Water Delivery Costs (Thousands) Fixed O&M Costs $ 102,343 $ 98,810 $ 104,931 $ 99,269 Pumping power & Capacity Charges Costs (adjusted) 94,805 94,291 93,303 98,008 Water Deliveries (Acre-Feet) Total water deliveries with credits 1,455,457 1,450,000 1,457,704 1,444,000 Take or Pay adjustment 15,000-15,000 Billed Fixed OM&R Water Volume 1,455,457 1,465,000 1,457,704 1,459,000 Pumping Energy Rate 1 Water Volume 1,455,457 1,450,000 1,457,704 1,444,000 Water Delivery Rate ($/AF) Calculated Fixed O & M Component $ $ $ $ "Big R" Component Rate Stabilization Component Navajo Decommissioning Rate Pumping Energy Rate Total Water Delivery Rate $ $ $ $ Funds available from reconciliation-fixed OM&R ($000) $ (1,921) $ - $ 29 $ - Funds available from reconciliation-energy ($000) $ (582) $ - $ 5,408 $ - Total Funds available from reconciliation ($000) $ (2,503) $ - $ 5,437 $ /2019 Budget FAP Committee 10/24/ Strategic Reserves Main drivers for the increase in strategic reserves: Reducing the amount dedicated the Extraordinary Cost Reserve by $.015 Using $.02 from the Water Storage tax for the Ag Consideration Program in tax year 2017/2018 Elimination of advance energy payments in /2019 Budget FAP Committee 10/24/

32 CAWCD Recharge Program (Thousands) Actual Actual Projection Budget Budget Water Deliveries (acre-feet in thousands) Total revenues $ 1,635 $ 1,257 $ 1,313 $ 1,247 $ 1,331 Total expenses (1,264) (1,122) (1,591) (1,858) (1,372) Change in net position $ 371 $ 135 $ (278) $ (611) $ (41) Expense Summary Agua Fria $ (93) $ (73) $ (185) $ (216) $ (110) Hieroglyphic Mountains (290) (404) (301) (514) (290) Lower Santa Cruz (223) (192) (310) (326) (269) Pima Mine Road (279) (153) (421) (368) (258) Superstition Mountain (302) (244) (261) (269) (281) Tonopah (77) (56) (113) (165) (166) Total expenses $ (1,264) $ (1,122) $ (1,591) $ (1,858) $ (1,374) 2018/2019 Budget FAP Committee 10/24/ CAGRD Account (Thousands) Actual Actual Projection Budget Budget Operating Revenues Reimbursements & other operating revenues $ 29,825 $ 30,191 $ 33,388 $ 39,130 $ 42,187 Operating Expense Salaries and related costs (927) (1,038) (1,122) (1,058) (1,089) Outside services (1,949) (1,654) (981) (1,336) (735) Overhead (915) (1,060) (1,187) (1,072) (1,104) Water for recharge (5,715) (5,461) (7,154) (7,141) (8,158) Other expenses (20) (21) (32) (99) (100) Total operating expenses (9,525) (9,234) (10,476) (10,706) (11,186) Operating Income 20,300 20,957 22,912 28,424 31,001 Non-Operating Revenues/Expenses Interest Income Interest Expense (1,697) (2,562) Total non-operating revenue/expenses (1,106) (1,689) Change in Net Position $ 20,390 $ 21,143 $ 23,397 $ 27,318 $ 29,312 Obligations (year reported)-000 acre feet /2019 Budget FAP Committee 10/24/

33 Captive Fund (Thousands) Actual Actual Projection Budget Budget Operating Revenues Reimbursements and other operating revenues $ 8,091 $ 8,391 $ 8,841 $ 9,248 $ 9,734 Operating Expense Outside Services (176) (175) (195) (196) (204) Other Expense (8,795) (7,573) (9,031) (9,055) (9,395) Total Operating Expense (8,971) (7,747) (9,226) (9,251) (9,599) Operating Income (881) 644 (385) (3) 135 Non-Operating Revenues Interest Income Change in Net Position $ (874) $ 651 $ (378) $ 4 $ /2019 Budget FAP Committee 10/24/ Supplemental Water Account (Thousands) Actual Actual Projection Budget Budget Operating Revenues/Expenses $ - $ - $ - $ - $ - Non-Operating Revenues Interest Income Change in Net Position $ 69 $ 120 $ 133 $ 146 $ 165 Cash Balance at Year End $ 8,116 $ 8,236 $ 8,369 $ 8,515 $ 8, /2019 Budget FAP Committee 10/24/

34 Total CAWCD All funds Actual Actual Projection Budget Budget Operating ($ Millions) Revenues $ $ $ $ $ Operating Expenses (230.3) (286.6) (252.1) (254.6) (263.8) Operating Income/(loss) 2.7 (56.5) Non-Operating Revenues Non-Operating Expenses (25.4) (24.9) (23.6) (23.9) (24.8) Total Non-operating Revenues/(Losses) Change in Net Position 41.2 (11.4) Net Position at Beginning of Period Net Position at End of Period $ $ $ $ $ /2019 Budget FAP Committee 10/24/