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8.A. - Page 31 of 51 charges for water and sewer services on a combined utility bill to each of its customers. As a result, the City is not suspending water service for non-payment. The City has reviewed the executive order and does not currently believe that such order will materially adversely affect the City's projected operating results set forth in Table A10 below or the City's ability to pay amounts due under the Redwood City Financing Agreement, which secure the 2020 Bonds. However, no assurances can be made as to the ultimate impact of the outbreak and responses thereto by local, State and federal governments on the City. The following table shows a five-year history of reserve amounts available for sewer utility bill payment delinquencies, along with actual payment delinquencies in such years. TABLE A7 CITY OF REDWOOD CITY PAYMENT DELINQUENCIES AND SEWER BILL ALLOWANCE FOR BAD DEBT 2015-16 2016-17 2017-18 2018-19 2019-20 Reserve Amount0) $24,953 $24,953 $60,442 $61,774 $64,279 % of Revenue 0.07% 0.07% 0.16% 0.16% 0.15% Actual $45,746 $68,767 $61,988 $54,567 $76,284 Delinquencies(2) Represents a reserve for delinquent payments, estimated and adjusted annually based on previous and outstanding delinquent payments. Amounts on reserve are expended to offset delinquent payments, and re -funded by the City based on estimated delinquencies. (2) Represents the actual amount of accounts receivable written off during the fiscal year. Source: City of Redwood City As of June 30, 2019, 16.3% of City utility bills were delinquent, which represents approximately 0.442% of the total amounts billed for Fiscal Year 2019. Since the Governor's executive order with respect to the suspension of water service for non-payment went into effect, as of June 30, 2020, 15.24% of City utility bills were delinquent, which represents approximately 0.554% of the total amounts billed for Fiscal Year 2020. The City can make no assurances that delinquency rates will not increase as a result of the economic impact of the COVID-19 outbreak; however, the City has not experienced any material changes in the delinquency rate as of June 30, 2020. Sewer Facilities Fee for New Development The City levies a sewer facilities fee on applicants for new (or expanded) wastewater service as a condition of obtaining a permit to connect to the sewer system. This fee is used to help fund the cost of sewer facilities that provide benefit to the new or expanded connection. The City's sewer facilities fees are established by the City Council of the City. The current sewer facilities fee for a new residential connection is $960. New non-residential connections pay a fee equal to $960 per each 2,000 square feet of building area. Pursuant to the Joint Powers Agreement, the Authority has established a capacity fee to recover costs for future expansion of Authority facilities. The fee is levied on new development within the Authority's service area and is collected by the Members, including the City, on the Authority's behalf. The City periodically remits payment of the Authority's capacity fee to the Authority. The Authority's capacity fees are not Net Revenues of the City's wastewater system available to pay the City's allocable share of debt ATTY/AGR/2020.264/PRELIMINARY OFFICIAL STATEMENT — WASTEWATER REV: 11-18-2020 EI Page 9 of 29 697