Document 1 (cont...d)

Variance Analysis- 2010 Operating Results – Rate Supported Programs

Drinking Water Operations - A $6.0 million surplus was realized for several reasons. There were surpluses in compensation costs from staff vacancies. There were also savings in water production costs due to lower volumes of water purification waste discharged to ROPEC. In addition, surplus was generated through an increase in operation revenues due to increased demand for external cost recovery work. Finally, roadway reinstatement contract costs were below budget because less repairs were required on some projects and some work was performed internally by Public works instead of an external contractor.

Water Billings - A $3.6 million surplus in water billing revenues resulted from an increase demand for water, compared to volumes that had been anticipated.

Waste Water Operations – A $1.3 surplus in waste water operations was generated though savings in compensation costs due to staff vacancies.

Sewer Surcharge Revenues – A $3.9 surplus in Sewer Surcharge billing revenues resulted from the consumption volumes that were above budgeted levels.

Document 2