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<br />Historical Revenues, Expenses and Debt Service Coverage
<br />The following table presents Enterprise revenues and expenses for each of the five fiscal
<br />years ending June 30, 2019 through June 30, 2023, including debt service coverage.
<br />Table 15
<br />Historical Revenues and Expenses
<br />Fiscal Year Ended June 30,
<br />2019 2020 2021 2022 2023
<br />Gross Revenues
<br />Charges for Services (1)$45,001,193 $47,221,422 $46,928,458 $47,012,754 $42,679,748
<br />Investment Income/Interest 1,707,352 1,536,474 (262,211)(1,927,479)1,012,961
<br />Connection Fees 173,275 178,718 142,205 163,217 133,481
<br />Total Gross Revenue $46,881,820 $48,936,614 $46,808,452 $45,248,492 $43,826,190
<br />Operating Expenses (2)32,725,719 34,777,766 31,927,204 33,570,662 35,673,736
<br />Transfers In/Out (749,637) (727,216) (1,214,284) (1,214,626) (1,257,280)
<br />Total Operating Expenses $31,976,082 $34,050,550 $30,712,920 $32,356,036 $34,416,456
<br />Net Revenue $14,905,738 $14,886,064 $16,095,532 $12,892,456 $9,409,734
<br />2013 Installment Payments $2,059,850 $2,060,650 $2,059,850 $2,062,450 $2,058,250
<br />2015 Installment Payments 1,416,844 1,420,844 1,418,444 1,419,844 1,419,844
<br />2017 Installment Payments 489,069 491,719 491,519 490,919 494,919
<br />Total Debt Service $3,965,763 $3,973,213 $3,969,813 $3,973,213 $3,973,013
<br />Debt Service Coverage Ratio 3.76 3.75 4.05 3.24 2.37
<br />___________________________
<br />Source: City of Redwood City.
<br />(1)Includes capacity charge and facility fee revenues. Beginning in Fiscal Year 2023-24, capacity charges and
<br />facility fees have been combined into a single one-time “capacity fee” that varies based on meter size.
<br />(2)Net of depreciation and amortization.
<br />Projection of Revenues, Expenses and Debt Service Coverage
<br />Enterprise debt service coverage, estimated actual operating results for Fiscal Year 2023-
<br />24, budgeted operating results for Fiscal Year 2024-25, and projected operating results for the
<br />next four Fiscal Years are set forth in the following table. The projections include a rate increase
<br />(which has been adopted) sufficient to increase revenues 7% in Fiscal Year 2024-25, followed by
<br />rate increases (which have not yet been adopted) sufficient to increase revenues 6% annually
<br />through 2029. In November 2023, the City Council reviewed the sufficiency of these rate
<br />increases to satisfy operating and CIP requirements through Fiscal Year 2027-28 but did not
<br />adopt any rate increases after Fiscal Year 2024-25. Subsequently, the City Council added a $28
<br />million Main City Potable Water Tank and Pump Station project to the CIP. The City Council plans
<br />to undertake additional review of the Enterprise’s revenue needs in time to take action with respect
<br />to rates prior to the start of Fiscal Year 2025-26. The City Council may elect to increase service
<br />and water rates, defer capital expenditures, sell additional bonds, or take other actions it deems
<br />financially prudent and advisable to satisfy the operating and CIP requirements of the Enterprise.
<br />Certain assumptions have been made by the City in the development of the projections,
<br />such as expected increases in revenues from new planned developments, stable water demand
<br />from existing customers, the future cost of water purchased from the SFPUC and future water
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