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<br /> i. B~ '3 <br /> diligently together to negotiate the legal, technical, and financial terms and conditions for <br /> both documents, and expect to complete their work within the next two to three weeks. By <br /> mid-July, the Agreement and Lease, as well as other implementation actions for Council <br /> consideration will be brought forward. <br /> Alternative <br /> Provide alternative direction. <br /> J <br /> Fiscal impact <br /> The preliminary, estimated cost of the "Alternative TF" Project as recommended by the <br /> Recycled Water Task Force is $43.6 million. Refined cost estimates are now being <br /> assembled based on preliminary engineering design completed since the Task Force <br /> reported to Council in March. <br /> The pending approval of the Agreement will trigger a City reimbursement to SBSA for <br /> completed, Commission-authorized planning, environmental and engineering services in <br /> the amount of approximate $400,000. Subsequent reimbursements for engineering, <br /> construction of facilities and construction management are estimated at $14 million over <br /> the next two years. Staff will recommend via an updated financing plan that the City <br /> Council authorize the issuance of revenue bonds for the SBSA work and the first phase of <br /> City distribution system and customer site retrofits in the fall of 2004. The bonds shall be <br /> paid off over a 25-30 year period, utilizing revenues created by increasing water rates to all <br /> Redwood City customers and by significantly increasing connection fees for new <br /> development. <br /> The pending approval of the Lease commits the City to estimated annual rental costs of <br /> $19,220, beginning January 1,2006. This on-going, operational cost shall be covered by <br /> revenues generated by the sale of recycled water. <br /> Prior to the Council's approval of the project, and the subsequent Task Force report and <br /> recommendations, staff had estimated that annual water rate increases ranging from 6% to <br /> 9% per year for 10-13 years would be required to generate the additional revenues needed <br /> to finance the project. Any connection fees collected during that time (could be as much as <br /> 40% of total costs) would offset those impacts. <br /> ? <br /> Attachments <br /> 1. Summary - Principles of Agreement <br /> 2. Draft Attachments One and Two to the pending Agreement for Production and <br /> Delivery of Recycled Water between the South Bayside System Authority and the <br /> City of Redwood City <br /> Page 3 of 3 <br />