AgdaPkt 2005-01-24 - Laserfiche WebLink

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small degree, and reduce debt service payments, it would also result in a corresponding decrease in interest earnings. However, if the City collects more Facilities Fees than proj ected over the next few years, the City should consider using these fees to directly fund proj ects and there by reduce the amount of bond financing needed. Cash Flow Projections Cash flow proj ections were developed in order to estimate the long-term revenue requirements of the water enterprise and to determine necessary water rate adjustments. Bartle Wells Associates evaluated a number of financing scenarios. The projections developed in this report are based on the best information currently available and also incorporate a number of policy, financing, and other assumptions which are detailed on the financing plan tables. Financial projections were developed for a number of other hypothetical scenarios. These alternative projections are included in the appendix to this report. . No Recycled Water Project - The City has been able to purchase adequate water supply to meet its overdraft demands at standard wholesale water rates due to a temporary surplus of SFPUC water capacity. Many other Bay Area Water Supply and Conservation Agency (BA WSCA) agencies are not yet using their full supply assurance. However, as regional demand increases, the unused water supply available to Redwood City will evaporate. According to recent projections, the BA WSCA water demands will hit full capacity of 184 million gallons per day (mgd) in 2007-2010. The financial projections developed for this alternative assume historical drought rate penalties would apply to water use over the City's supply assurance when regional demand on the SFPU C system reaches full capacity. According to the projections, long term rate increases would be higher without the recycled water project (see Appendix A). Impact of Recycled Water Project - In order to isolate the impact of the recycled water project, including capital and operating costs, financial projections were developed assuming no future SFPUC wholesale rate increases and no increases to the City's operating and maintenance costs. The projections indicate that the recycled water project could be financed with a series of five 6% rate adjustments over the nextfive years (see Appendix B). Award of $5 Million Grant in Jan-O6 - Based on these projections, a $5 million grant in January 2006 would decrease debt service by approximately $350,000 and result in approximately 2% lower rate adjustments (see Appendix C). . . Water Rate Projections The cash flow projections indicate the need for a series of three consecutive 12% rate increases beginning July 1,2005, followed by steady annual 6.5% rate increases through 2014/15. The increases will enable Redwood City to: a. fully fund the water enterprise's operating and capital programs, including continuation of the City's active conservation program and the recycled water project, Water Financing Plan 4 December 2004