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<br />project Alternative TF. Total construction costs are estimated at about $84 million in
<br />future dollars accounting for contingency funding and cost inflation to the construction
<br />midpoint for each project. The project includes about $79 million for recycled water
<br />system projects plus an additional $5 million for artificial turf fields recommended by the
<br />Task Force to offset potable demand. Project costs are front-loaded with almost $50
<br />million in expenditures anticipated over the first two years.
<br />
<br />Alternative TF Recycled Water Project Cost
<br />
<br />Year
<br />
<br />2004/05
<br />
<br />2005/06
<br />
<br />2006/07
<br />
<br />2007/08
<br />
<br />2008/09
<br />
<br />Total
<br />
<br />Cost (future $)
<br />
<br />$32,621,500 $16,477,000 $15,331,500
<br />
<br />$6,858,500 $12,774,500 $84,063,000
<br />
<br />% of Total
<br />
<br />390/0
<br />
<br />200/0
<br />
<br />180/0
<br />
<br />80/0
<br />
<br />150/0
<br />
<br />1 000/0
<br />
<br />The recommended Alternative TF project will have the capacity to supply approximately
<br />1,960 acre-feet of recycled water per year. Of this total, an estimated 1,100 acre-feet are
<br />needed to resolve current reliability and potable supply deficiencies, which will benefit
<br />all existing Redwood City water customers. The remaining 860 acre-feet of project
<br />capacity will be available to meet the future demands of growth.
<br />
<br />Project Financing
<br />
<br />The City anticipates financing the recycled water project with a series of annual revenue
<br />bond issues aligned with proj ect funding needs. The bonds will be secured by a lien on
<br />net revenues of the water enterprise. The City should continue pursuing potential
<br />opportunities for grants and subsidized loans which would offset the amount of bond
<br />funding. A summary of anticipated bond issues is listed below. The debt service
<br />estimates are based on 30-year bond terms, cash-funded debt service reserve funds, and
<br />availability of AAA-rated municipal bond insurance.
<br />
<br />Water Reven ue Bond & Debt Service Projections
<br /> 2005 2006 2007 2008 2009
<br /> Bonds Bonds Bonds Bonds Bonds Total
<br />Anticipated Issuance Date Feb-05 F eb-06 Feb-07 Feb-08 Feb-09
<br />Bond Issue Size $35,800,000 $18,250,000 $17,035,000 $7,715,000 $14,220,000 $93,020,000
<br />Project Funding $32,621,500 $16,477,000 $15,331,500 $6,858,500 $12,774,500 $84,063,000
<br />Bond Term (Years) 30 30 30 30 30
<br />Average Interest Rate 4.80% 5.25% 5.50% 5.50% 5.50%
<br />Debt Service $2,276,000 $1,221,000 $1,172,000 $531,000 $978,000 $6,178,000
<br />
<br />Existing water enterprise fund reserves should not be used to fund the proj ect. A spend-
<br />down of fund balances would draw reserves below prudent levels and reduce future
<br />financing flexibility. Additionally, the use of reserves would have only a very minimal
<br />impact on rates. While use of fund reserves could reduce the amount borrowed, to a
<br />
<br />Water Financing Plan
<br />
<br />3
<br />
<br />December 2004
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