AgdaPkt 2003-08-11 - Laserfiche WebLink

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9A -19 REDWOOD CITY — WATER FINANCING PLAN EXECUTIVE SUMMARY Background Redwood City currently faces substantial water reliability and supply deficiencies. The City relies on a single source of potable water supply: the San Francisco Public Utility Commission's (SFPUC) Hetch Hetchy regional water system. The City currently uses about 1,100 acre -feet of water in excess of its annual SFPUC contractual supply assurance of 12,243 acre -feet. Based on current consumption levels, a 20% SFPUC systemwide drought would result in a 28.4% reduction in the City's supply assurance. Without a reliable, supplemental source of supply, the City will: a. remain at high risk for not meeting its existing customers' water needs during periods of drought, b. have insufficient water supply to meet future demands of growth, and c. remain vulnerable to severe financial impacts due to drought. In August 2002, Kennedy /Jenks Consultants submitted the "Water Recycling Feasibility Study for Redwood City ". The study evaluated options for reducing the City's reliance on SFPUC water and concluded that the only viable, and most cost - effective way to meet the City's water reliability and supply deficiencies is via construction of a recycled water system coupled with an effective water conservation program. Together, recycling and conservation provide the best solution to meeting the City's water supply needs, especially during droughts. Purpose & Scope Bartle Wells Associates was retained as a subcontractor to Kennedy /Jenks to develop a financing plan to fund the recycled water project. In December 2002, Bartle Wells Associates submitted the "Redwood City Water Financing Plan" detailing findings and recommendations. This report presents an updated version of the Water Financing Plan. The objectives of this analysis include the following: • Evaluate financing alternatives and recommend a financing strategy to fund the recycled water project while maintaining the financial health of the water enterprise • Develop cash flow projections to evaluate the water enterprise's financial position over the next 10 years • Determine the annual revenue requirements needed to fund the City's operating and capital programs and recommend necessary rate adjustments • Phase -in rate adjustments over the 10 -year planning period to the extent possible in order to minimize the annual impact on ratepayers • Evaluate the potential impacts of a drought on wholesale water costs and on the water enterprise's finances Water Financing Plan ES -1 02/24/03