AgdaPkt 2006-01-23 - Laserfiche WebLink

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U,<; disincentives for unwise use of water, especially outdoors. At the recommendation of the City Council's Utilities Committee, the Council also approved Resolution No. 14648, adopting Water Enterprise Guiding Principles (Appendix A of the Water Financing Plan). On May 23,2005, the Council adopted Resolution No. 14645, a policy for the pricing of recycled water (Appendix B of the Water Financing Plan). 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 1 O-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 Table A-5 of the Financing Plan provides a discussion of the outstanding policy issues for the Council's consideration, based on the assumptions delineated in Tables A-1 through A- 4, and on the calculations and analysis presented in the subsequent tables and appendices. In summary, the policy issues that the Utilities Committee and the full City Council will consider over the next several months are: 1) Water rate structure adjustments 2) Annual updates to financial projections 3) Proposition 218 4) Annual rate increases 5) Facilities fees update 6) Facilities fees policy considerations Alternatives 1. The City Council may reject staff's recommendation to approve the 2006 Update of the Water Financing Plan and to sell bonds to fund this initial phase of the recycled water project. In such event, construction of recycled water distribution pipelines in Redwood Shores will not proceed as planned. 2. Council could direct staff to identify expense reductions in the water utility system, transfer in resources from the general fund, or use existing net working capital of the water fund to mitigate the otherwise required 12% rate increase. Fiscal Impact The 2006 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 2 of 3