AgdaPkt 2004-07-26 - Laserfiche WebLink

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g6i - 3 All of the legal, operational and financial details of the long-term partnership arrangement between the two agencies are embodied in the Agreement for Production and Delivery of Recycled Water between the South Bayside System Authority and the City of Redwood City. The Agreement and companion Lease are considered the cornerstone of the Project implementation process. Alternative Provide alternative direction. Fiscal Impact The preliminary, estimated cost of the "Alternative TF" Project as recommended by the Recycled Water Task Force is $43.6 million. Refined cost estimates are now being assembled based on preliminary engineering design completed since the Task Force reported to Council in March. Should the City Council approve the Agreement, this will trigger a City reimbursement to SBSA for completed, Commission-authorized planning, environmental and engineering services in the amount of $409,443. Subsequent reimbursements for engineering, construction of facilities and construction management are estimated at $14 million over the next two years. Staff will recommend via an updated financing plan that the City Council authorize the issuance of revenue bonds for the SBSA work and the first phase of City distribution system and customer site retrofits in the fall of 2004. The bonds will be paid off over a 25-30 year period, utilizing revenues created by increasing water rates to all Redwood City customers and by significantly increasing connection fees for new development. The approval of the Lease commits the City to estimated annual rental costs of $19,250, beginning January 1, 2006. Rent will be adjusted by CPI index at three year intervals. All direct operation and maintenance costs incurred by SBSA in producing and delivering recycled water, along with an overhead contribution to SBSA, will be paid fully and completely by Redwood City's Water Enterprise Fund. Staff estimates that costs for the first year of recycled water production (FY 2006/07) will be $30,000 to $50,000, rising to a projected annual cost of $330,000 by FY 2008/09, when the project is expected to be delivering approximately 650 Acre Feet per year to 57 customers. These on-going, operational costs will be covered by revenues generated by the sale of recycled water. Prior to the Council's approval of the project, and the subsequent Task Force report and recommendations, staff had estimated that annual water rate increases ranging from 6% to 9% per year for 10-13 years would be required to generate the additional revenues needed to finance the project. A portion of connection fees collected during that time (could be as much as 40% of total costs) would offset those impacts. � / / � , , � / /�. �'� Peter Ingram Ed Everett Director, Public orks Services City Manager Page 3 of 4