LRPC June 2021

As we progress through 2021, the LRPC primary focus will be on both short‐term and long‐term financial planning and management to ensure we maintain our currently strong financial position. Looking forward, there are factors that we must take into account that will make this a challenging task, including developing plans to cope with another potential drought as well as funding our long-term capital asset replacements.

Specific areas of support the LRPC will provide to the BLSMWC management & staff will include:

Updating & analyzing multi‐year cash flow to validate the current and forecasted health of financial reserves by identifying all potential reserve liens through our established Reserves Fund Policy process, including Asset Management Plan funding requirements.

Assist in the BLSMWC Asset Management Plan annual database updates and implementation of capital asset replacements and repairs. This includes documenting all asset changes and recalculating funding plan options. Continue to collect and analyze water meter usage data for consideration in the development of future rate structures. With nearly 100% of meters now installed, usage levels and trends will be re‐evaluated to determine if an adjustment to metered water usage rates is in order.

Continue to review and make recommendations for future operating and reserve budgets and expenses to minimize shareholder rate increases.

Managing and maintaining our long‐term financial reserves, as listed in item #1 above, will clearly be the most significant challenge. Our potential reserve liabilities outweigh assets. Therefore, careful planning and thought‐out decisions on how we prioritize spending to meet our most critical long‐term liabilities will be necessary. The major reserve liabilities, which include completing several unfunded USDA project tasks, the potential need to purchase increased CCWD water capacity, and funding our long‐term asset management plan will be fully assessed over the next few months with all recommendations presented to the board for review and approval.