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8e Page 35 The Revenue Services Division of the Finance Department is responsible for all City utility billing and collections, as well as processing connection and facilities fees. Service Area The Enterprise serves most of the corporate area of the City and portions outside the corporate limits, including Canada College, portions of the City of San Carlos and the Town of Woodside, and the unincorporated Emerald Hills area of the County. The Enterprise's service area presently covers approximately 14 square miles. Service is provided to areas between Highways 280 and 101, and between Whipple Avenue and Marsh Road in the area east of Highway 101, and in the Redwood Shores development. As of June 30, 2006, the Enterprise serves domestic water to approximately77,000 people through 23,059 active service connections. Residential connections account for 90 percent of the total service connections. Commercial connections account for eight percent. The remaining two percent are mostly fjre connections, and some municipal and institutional connections. The Enterprise's service area is substantlaliy built out, with a relatively stable customer base. See "Customer Base" below. Water Supply and Demand Background. The water supply delivered to Redwood City and 27 other retail water agencies by the Regiona! Water System originates in the Hetch Hetchy reservoir and surrounding watershed located in and around Yosemite National Park. Water flows by gravity across the California central valley, across the Hayward Fault and through the Irvington Tunnel, where four pipelines carry water across, and around the southern end of San Francisco Bay and feed the City's 13 connections to the Regional Water System. Hetch Hetchy water represents approximately 85% of the total water supply, with 15% provided by local reservoirs also operated by the San Francisco system. Water Supply Agreements. The City has entered into two contractual arrangements with the City and County of San Francisco, both of which expire in June 2009: (i) a "Master Water Sales Contract," which the City co-signed in 1984 with 29 (now 27) other suburban water purchasers, and (ii) an "Individual Contract," which went into effect in 1984. The City plans to participate in the renegotiation and extension of the Master Water Sales Contract, and to renegotiate or extend the Individual Contract, prior to the expiration of each Contract in 2009. Despite the expiration of these two contractual arrangements in 2009, the City believes that, under the Master Water Sales Contract, it is guaranteed an ongoing water supply assurance at approximately its current level. Water Supply Assurance, The Master Water Sales Contract assures a maximum supply of 184 million gallons per day collectively to all of the suburban purchasers. The City's water supply assurance Is 10.93 million gallons per day. or approximately 12,243 acre feet per year. If additional water is available to the wholesale water purchasers within the 184 million gallon per day limit, the City's average annual water usage may increase, but in case of rationing due to drought, the City's usage may be limited pursuant to the Interim Water Shortage Allocation Plan ("'WSAP"), approved by City Council of the City in May 2001. The IWSAP was also adopted by San Francisco. In Fiscal Year 2005-06, San Francisco delivered an average of 10.88 million gallons per day to the City, or approximately 12,186 acre feet for the Fiscal Year. The six-year average 20