AgdaPkt 2006-01-23 - Laserfiche WebLink

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7ð-/ . The City should maximize the size of the 2006 bond issuance at roughly $26 million. The City has the financial capacity to issue this higher-than-previously-anticipated level of debt and will need the funds within the next 18 months. The additional funding will provide the City with more flexibility for project financing, postpone the next bond sale, and reduce the amount of future financing needs. The main drivers of water enterprise annual cost increases, and hence rate increases, through 2015/16 include: - SFPUC wholesale water rate increases - SFPUC rates are projected to more than triple over the next 10 years with the rate rising from $1.02 to $3.46 (per hundred cubic feet) by 2014/15. These new projections are higher than prior estimates. The increase in the cost of water supply accounts for roughly 55% oftotal annual cost increases over the projection period. - Recycled water project financing - Total net annual debt service from all projected bond issues is estimated at $5.8 million, assuming the entire project is financed with 10ng-tenn debt. This accounts for roughly 25% of total annual cost escalation. . Operating cost inflation - Annual operating and maintenance costs escalate at the annual rate of3.5% and account for roughly 20% of the increase in total annual water enterprise expenditures over the next decade. Water Enterprise Finances & Rates Redwood City's water enterprise is in excellent operational and financial condition. The City adjusts its rates and service charges annually, to keep revenues in line with expenses, and budgets approximately $2 million per year for ongoing capital repairs and replacements to maintain the water system in good working condition. As of June 30, 2005, the water enterprise had accumulated approximately $11.6 million of combined operating and rate stabilization fund reserves, equal to roughly 77% of2005/06 budgeted operating expenses and 58% of the total enterprise budget including debt service and capital. . The City's water rates are low compared to other regional agencies. Residential bills are about 20% below the regional average. An average single family residence using 22 hundred cubic feet (cd) of water per bi-monthly billing period pays a little under $62 for water service, equivalent to about $31 per month or less than four-tenths of one cent per gallon. The City is currently in the process of updating its Water Facilities Fees - one-time fees paid by new customers connecting to the water system - to ensure new development funds its share of capacity in City infrastructure, including the recycled water system. The recycled water system will indirectly provide water supply for growth by reducing potable demand. The City's Water Facilities Fees have not been adjusted since 1994. 3