PADRE DAM

CEO Ensuring a STRONG WATER Future Padre Dam began Fiscal Year 2018 with a new 5-Year Business Plan and Budget that will ensure a strong future for the District, our customers and the communities we serve. This Plan ensures scal responsibility of the District while continuing the maintenance and infrastructure investments necessary to provide our customers with high quality, reliable water and wastewater systems. I take great pride in sharing that our team at Padre Dam achieved many accomplishments during this rst year of the Plan. Increased water sales compared to Budget during this rst year allowed our Board of Directors to approve a water rate freeze for the next scal year. We had a unique opportunity this year to provide some rate relief to our customers while still achieving all of the District's goals. Our Eastern Service Area Secondary Connection Project made signicant strides towards completion. Construction work is wrapping up and water service through this connection will begin in the next scal year. This project is the key to providing redundancy in our Eastern Service Area, which increases water reliability into the future. The Advanced Water Purication Program has achieved great strides in moving the project forward and creating up to 30 percent of our water supply locally. Our Program team has been in negotiations with program partners (City of El Cajon, County of San Diego, and Helix Water District) on the development of term sheets and what the governance structure will be for the Program. Additionally, we have continued to secure grants and other funding opportunities while developing the Financial Plan Model for the Program – all with ratepayers in mind. Over the next year we anticipate the Program partners will nalize what the governance structure will look like, the general nancial plan and begin the permitting and construction document processes. This Program is a great opportunity to produce 30 percent of our water supply locally, improving water reliability, more local cost control and "Ensuring a Strong Water Future" for our community. Additional highlights from Fiscal Year 2018 include: • 99.7 percent Automated Meter Infrastructure Reporting Success • 146 valves were replaced to ensure water service reliability • GIS Application Enhancements to further assist eld workers through technology • 250 meters replaced per month as part of a multi-year meter replacement program I continue to be struck with pride every day at the phenomenal work of our talented team at Padre Dam. It is because of the innovation, creativity and diligence that they bring to work with them every day that we are ensuring a strong water future. I look forward to the great accomplishments we will make in FY 2019. Best Regards, Allen Carlisle CEO / General Manager 3 2018 Annual Report

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