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<br />$7 <br /> <br />2005, the City adopted a 12% rate increase pursuant to the financing plan <br />recommendations. Over the past year, the City has moved forward with the first phase of <br />project construction using proceeds from the 2005 Bonds. <br /> <br />The City is now ready to proceed with its second series of bonds. This financing plan <br />presents updated financing and rate recommendations for funding the recycled water <br />project and maintaining the long-tenn financial health of the water enterprise. The <br />update incorporates: <br /> <br />. <br /> <br />Updated water supply and demand projections from the Redwood City 2005 Urban <br />Water Management Plan; <br /> <br />Latest recycled water project modifications and cost estimates; <br /> <br />. <br /> <br />. <br /> <br />Updated SFPUC wholesale water rate projections developed by BA WSCA based on <br />the SFPUC's approved capital program for Hetch-Hetchy system upgrades; <br /> <br />Most recent budget and financial data for the water enterprise; <br /> <br />Updated bond and debt service projections. <br /> <br />. <br /> <br />. <br /> <br />Key objectives of the financing plan update include: <br /> <br />. Evaluate financing options and recommend a financing strategy for the recycled <br />water project; <br /> <br />. <br /> <br />Update long-tenD water enterprise cash flow projections; <br /> <br />Recommend water rate adjustments needed to fund the enterprise's long-tenD <br />operating and capital needs; <br /> <br />. <br /> <br />. <br /> <br />Phase-in rate adjustments over time, to the extent possible, to minimize the annual <br />impact on ratepayers; <br /> <br />Identify outstanding policy issues. <br /> <br />. <br /> <br />The findings and recommendations presented in this report were developed with a <br />substantial amount of input from City staff, Kennedy/Jenks Consultants, and the City <br />Council's Utilities Committee. The financing plan incorporates the project <br />recommendations approved by the City's Community Task Force on Recycled Water. <br /> <br />Summary of Key Findings <br /> <br />Key findings of the Water Financing Plan - January 2006 Update include: <br /> <br />. <br /> <br />Construction of the recycled water project has been moving forward on schedule and <br />on budget. Overall, project expenditures have been on target with planning estimates. <br /> <br />Financial plan implementation remains on track. As planned, the City issued the first <br />series of bonds in February 2005 and raised rates by 12% in July 2005. The <br />recommended water rate increase for 2006/07 remains at 12% as previously <br />estimated. <br /> <br />. <br /> <br />2 <br />