AgdaPkt 2005-12-19 - Laserfiche WebLink

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�� her emphasize water conservation and create incentives for conservation and disincentives for unwise use of water, especially outdoors. Finally, the Council gave direction to the Utilities Committee and staff on adjustments to connection fees for new development and requested that recommendations come back to Council for consideration. Subsequently, the Committee has met with staff and consultants to consider options on approach and specific methodology for what will become a"Water Capacity Charge" for new connections / development. While progress has been made, there remain equity and procedural issues to be resolved. Staff anticipates that the Utilities Committee will forward their recommendations to Council for consideration in the first half of 2006. As a consequence of the Council's actions on January 24, 2005, the staff has implemented the following update procedure for the Water Financing Plan: 1. Monitor actual bids and costs against cost estimates, reconcile annually 2. Update most recent fiscal year budgets and estimates with final, audited figures 3. Update 10-year financial projections — add one additional year 4. Confirm and refine financing (bond) needs for next construction phase(s) 5. Verify consistency with UWMP and incorporate Council policies (recycled water pricing, for example) 6. Send to Council for consideration, with summary of changes and impacts on future water rates Staff will make a brief presentation to Council that will highlight: 1. The findings and signi�cant update revisions to the Draft 2005 Water Financing Plan Update 2. 2004 Plan projections vs. actual Fund performance 3. Changes recommended to 2005 Update that deviate from 2004 Plan 4. Financial impacts to customers and Water Enterprise Fund Alternatives The City Council may reject staff's recommendation to approve the Water Financing Plan 2005 update and to sell bonds to fund the second phase of the recycled water project. In such event, construction of distribution pipeline improvements will not proceed as planned. Fiscal Impact The 2005 update of the Plan does not materially change the strategy or financial outcomes established in the approved 2004 Plan. In the long-term — and even without including the costs of the Recycled Water Project — Redwood City water rates and service charges will rise significantly, driven primarily by the projected 300% increase (vs. a projected 280% increase described in the 2004 Plan) in the wholesale cost of drinking water over the next ten years, as the San Francisco Public Utilities Commission repairs and strengthens the Hetch Hetchy regional water system. However, as the Financing Plan points out, the potential rate increases without the project could be higher than with it. In addition, the increased revenues will be expended on a new water supply and distribution system that will last for 50 to 80 years, far beyond the 30-year debt service period. Finally, all water customers will have a much more reliable water supply by 2010 — and well beyond — to ensure that this essential resource is sustained for future generations. 2 of 3