El Toro Water District

Overview

• From FY2017-18 through FY2020-21, total revenues grew at a low annual average rate (0-3%), below historic long-term inflation (3%). 
• During that period, expenditures grew at a low annual average rate (0-3%), just below long-term inflation (3%). Annual depreciation and interest costs are not covered by total revenues.
• Total expenditures exceed total revenues and reserves have continued to decline.
• However, according to the District (MSR Survey/Interview, 2022), expenditures  and operating shortfalls are expected to decline as major capital improvements (e.g., reservoir floating cover lining) are amortized and retired.
• No specific allocations to reserves are indicated in the budget or financial reports, and unrestricted net position is low partly due to long-term obligations.
• The FY2022-23 budget shows improved revenue growth, but expenditures still exceed revenues and net position continues to decline.