AgdaPkt 2006-01-09 - Laserfiche WebLink

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c#J-£ This report presents an updated version of the financing plan. The 2005 update incorporates new water supply and demand data from the Redwood City 2005 Urban Water Management Plan, changes in the recycled water project, new SFPUC wholesale rate projections, updated water enterprise financial projections, and various other updates. The objectives of this update include: . Review financing alternatives Update water enterprise financial projections . . Evaluate and recommend overall water rate adjustments Phase-in rate adjustments, to the extent possible, to minimize the annual impact on ratepayers . . Identify outstanding policy issues The findings and recommendations presented in this report were developed with a substantial amount of input from City staff, Kennedy/Jenks Consultants, and the City Council's Utilities Committee. The financing plan incorporates the project recommendations approved by the City's Task Force. Summary of Key Findings The key findings of the Water Financing Plan 2005 Update include: . Everything is still on track and generally in line with prior year projections . The updated financial projections indicate that rate increases do not need to be as front-loaded as they were in prior projections. The cash flows indicate the need for 10% increases for 2006/07 and 2007/08 - lower than last year's projections for two additional 12% increases. These lower front-end increases are coupled with slightly higher adjustments in the immediate following years. At the end of the 10-year period the cumulative rate impact remains roughly the same as estimated in prior projections. As previously noted, the main drivers of cost increases, and hence rate increases, over the next 10 years are: - SFPUC wholesale water rate increases - SFPUC rates are projected to more than triple over the next 10 years. The resulting increase to the City's cost of water supply is estimated to account for over 50% of total water enterprise cost increases through 2014/15. - Recycled water project financing - Total net annual debt service for the project is projected at $5.7 million, accounting for roughly a little over 25% of to tal lO-year cost increases. . - Operating cost inflation - With 3.5% cost inflation, operating and maintenance costs are estimated to account for a little less than 25% of total water enterprise cost increases through 2014/15. 2 . ,,'-""""""" ---" .