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<br />/7 ð- ZtJ <br /> <br />Table A-4 <br />Redwood City Water Financing Plan <br />Cash Flow Assumptions <br /> <br />Cash Flow Assumptions <br /> <br />1 Long-term financial projections are based on 2005/06 Adopted Budget. <br /> <br />2 Growth in active service connections is estimated at 0.25% per year or about 1 % every <br />four years. <br /> <br />3 Annual percentage change in water sales based on Redwood City 2005 Urban Water <br />Management Plan demand projections which include passive and active conservation. <br /> <br />4 Facilities Fee revenues are held constant at $250,000 per year; future revenues will likely <br />increase assuming the City adjusts its Facilities Fees to account for the cost and capacity <br />of the recycled water project. <br /> <br />Future interest income projected at 3.5% of beginning fund balances. <br /> <br />Operating costs escalate at the annual rate of 3.5% to account for cost inflation. <br /> <br />On-going costs for newly-established Water Resources Management Program <br />(approximately $785,000 annually) are built into the budget and are not listed as a <br />separate line item. <br /> <br />8 Recycled water project operating costs are projected to phase in to $300,000 by 2007/08 <br />and escalate at the annual rate of 3.5% thereafter. <br /> <br />9 The projections account for interest earnings on bond reserve funds, which will offset <br />annual debt service payments. <br /> <br />10 Annual transfers to the capital fund for potable water system replacements are projected to <br />remain at $2.0 million. <br /> <br />11 Debt service coverage is calculated at total revenues less operating expenses, divided by <br />net debt service. <br /> <br />5 <br />6 <br />7 <br /> <br />BARTLE WELLS ASSOCIATES <br />F:\Jobs\Redwood City\1921\ \Redwood City Tables 1-13-06\Assumptions 4,1113/2006,3:17 PM <br />