PADRE DAM

You are getting reliable service that includes ongoing maintenance, sophisticated water quality testing and highly trained personnel. Ensuring you have water for cooking, cleaning, bathing and other essential daily tasks are key drivers that motivate the hard work our team does every day. Maintaining wastewater services, recycled water services and award-winning park and recreation services are equally important. This year was full of planning for a strong future. I am proud to report that Padre Dam has successfully completed its second Five-Year Business Plan and Budget covering Fiscal Years (FY) 2013-2017. This is just one of the many accomplishments from FY 2017. Our Eastern Service Area Secondary Connection Project made signicant progress this year. We awarded the construction contract in October 2016 and construction is now well underway. This project will provide important reliability and redundancy to our Eastern Service Area customers. Our Advanced Water Purication Program continues to make great strides. In FY 2017, the project received conceptual approvals for our free chlorine disinfection process as well as for using Lake Jennings to store puried water. Padre Dam continued to involve our community in this process, and our Demonstration Project has hosted over 4,000 people through FY 2017. Padre Dam and our project partners were awarded WateReuse Agency of the Year from California's WateReuse Association for the successful work moving the full-scale project one step closer to reality. We continue to secure funding and formalize partner agreements as we progress toward providing a new local water supply to East County. This year provided relief from drought conditions we have been experiencing over the last few years. We saw record levels of rainfall locally and a record snowpack in the Sierras. This offered much needed relief to the State's water supply systems. Despite the impressive current levels of storage, we continue to encourage water-use efciency at all times as our region adjusts to more frequent drought conditions. The achievements of FY 2017 and our FY 2013-2017 Business Plan are a direct reection of the incredibly talented team of employees we have at Padre Dam. Our team is dedicated to ensuring the highest quality of work is done to provide the best service to you. In June 2017, our Board of Directors adopted a new Five-Year Business Plan and Budget for FY 2018- 2022. The new plan is ensuring a strong future for Padre Dam, our customers and the community we serve. Best Regards, Allen Carlisle CEO / General Manager Quality SERVICE + Maintenance As a Padre Dam customer, you are getting more than just high quality tap water. 2016 Annual Report 3 2017 Annual Report 3

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