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Sewer Utility Finances & Rates 54
<br /> Water & Sewer Financial Plans & Rate Studies
<br />The following table summarizes Redwood City’s total projected annual payments to SVCW for
<br />operating and maintenance expenses, debt service, and other non‐operating costs. The amounts
<br />shown are based on the latest update of SVCW’s Long Term Financial Plan dated January 2016.
<br />Note that the debt estimates developed in SVCW’s Financial Plan exclude projected interest
<br />payments for SVCW’s line of credit and therefore differ slightly from the independent debt service
<br />projections calculated by BWA.
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<br />Table S5: 10‐Year SVCW Funding Requirements
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<br />3.6.2 Rehabilitation of Aging Sewer System Infrastructure
<br />Many of the City’s sewer collection system pipelines are over 50 years old and are in need of
<br />rehabilitation and replacement as they reach the end of their useful lives. The financial projections
<br />include $6 to $7 million per year for ongoing repairs and replacements to the City’s sewer collection
<br />system pipelines and other miscellaneous capital improvements. Many regional agencies are facing
<br />similar challenges.
<br />3.6.3 Ongoing Operating Cost Inflation
<br />In addition to other financial needs, small annual rate adjustments are needed to keep revenues in
<br />line with ongoing operating cost inflation, both for City operating expenses as well as SVCW
<br />operations. For financial planning purposes, the financial projections developed in this report
<br />assume that City operating costs escalate at an annual rate of 4%. The City’s share of future SVCW
<br />funding requirements is based on SVCW’s updated Long‐Term Financial Plan.
<br />
<br />2015/162016/172017/182018/19 2019/20 2020/212021/222022/232023/242024/252025/26
<br />SVCW Operating Expenses $9,471,662 $9,818,691 $10,178,518 $10,551,623 $9,946,603 $10,383,835 $10,699,334 $10,996,974 $11,273,763 $11,526,460 $11,781,398
<br /> % Change3.7%3.7%3.7%‐5.7%4.4%3.0%2.8%2.5%2.2%2.2%
<br />SVCW Debt Service
<br />Existing Bonds 4,379,937 5,469,446 5,156,767 5,149,125 5,152,137 4,835,651 4,833,021 4,831,378 4,827,828 4,832,561 4,821,846
<br />Existing SRF Loans 398,278 1,429,198 1,429,198 1,429,198 1,429,198 1,429,198 1,429,198 1,429,198 1,429,198 1,429,198 1,429,198
<br />New Bonds ‐ ‐ ‐ 729,109 729,109 1,119,452 1,119,452 1,119,452 1,119,452 1,119,452 1,119,452
<br />New SRF Loans ‐ ‐ 296,009 3,695,583 5,261,404 8,271,797 10,794,385 11,182,081 12,540,606 12,540,606 12,540,606 ___________________________________________________________________________________________________
<br /> Subtotal 4,778,215 6,898,644 6,881,974 11,003,015 12,571,848 15,656,098 18,176,056 18,562,109 19,917,084 19,921,817 19,911,102
<br />SVCW Non‐Operating Expenses
<br />Revenue‐Funded Capital 277,764 388,560 388,560 388,560 437,130 437,130 437,130 485,700 485,700 485,700 485,700
<br />Operating Reserves 86,940 38,729 40,158 41,639 (67,522) 48,796 35,210 33,217 30,890 28,202 28,452
<br />New Cash Reserves (SRF/CIP) 350,264 2,225,571 2,591,785 2,339,643 2,758,877 1,498,279 436,555 339,631 ‐ ‐ ‐ ___________________________________________________________________________________________________
<br /> Subtotal 714,968 2,652,860 3,020,503 2,769,842 3,128,485 1,984,205 908,895 858,548 516,590 513,902 514,152
<br />TOTAL 14,964,845 19,370,195 20,080,995 24,324,480 25,646,936 28,024,138 29,784,285 30,417,631 31,707,437 31,962,179 32,206,652
<br /> % Change 29.4%3.7%21.1%5.4%9.3%6.3%2.1%4.2%0.8%0.8%
<br />6.4.A. - Page 81
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