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<br />Recycled Water Project
<br />
<br />The City is in the process of constructing Kennedy/Jenks recommended recycled water
<br />project Alternative TF. Total project costs are estimated at about $85 million accounting
<br />for contingencies and cost inflation to the construction midpoint for each project. This
<br />new estimate is about $1.1 million, or 1.3% higher than prior 2004 cost estimates.
<br />
<br />The project includes $80 million for recycled water system projects plus $5 million for
<br />artificial turf fields, as recommended by the Task Force. Project costs are front-loaded
<br />with almost $50 million of expenditures anticipated in first two years. The recommended
<br />Alternative TF project will have the capacity to supply approximately 1,960 acre-feet of
<br />recycled water per year.
<br />
<br />Alternative TF Recycled Water Project Cost
<br />Year 2004/05 2005/06 2006/07 2007/08 2008/09 Total
<br />Cost (future $) $32,621,500 $16,477,000 $17,000,000 $6,270,000 $12,774,500 $85,143,000
<br />% of Total 38% 19% 20% 7% 15% 100%
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<br />Project Financing
<br />
<br />The City anticipates financing the recycled water project with a series of water revenue
<br />bonds. The bonds will be secured by a lien on net revenues of the water enterprise and
<br />the City's legal covenant to raise rates as needed each year to fund all operating expenses
<br />and achieve 120% debt service coverage.
<br />
<br />The financial plan assumes the City will issue approximately $26 million of bonds-
<br />roughly the maximum amount allowable - in 2006, providing about $23.6 million in
<br />construction funds. Future projected bond issues are aligned with annual project funding
<br />needs for financial planning purposes.
<br />
<br />A summary of prior and projected bond issues is listed below. Debt service estimates are
<br />based on 30-year bond tenns, cash-funded debt service reserve funds, and availability of
<br />AAA-rated municipal bond insurance.
<br />
<br />Water Revenue Bond & Debt Service Projections
<br /> 2005 2006 2007 2008 2009
<br /> Bonds Bonds Bonds Bonds Bonds Total
<br />Bond Issue Size $35,790,000 $26,000,000 $11,140,000 $7,125,000 $14,280,000 $94,335,000
<br />Project Funding $32,807,500 $23,554,000 $9,924,000 $6,274,000 $12,779,000 $85,338,500
<br />Bond Term (Years) 30 30 30 30 30
<br />Average Interest Rate 4.30% 5.00% 5.50% 5.50% 5.50%
<br />Debt Service $2,146,000 $1,691,000 $766,000 $490,000 $983,000 $6,076,000
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