AgdaPkt 2004-10-25 - Laserfiche WebLink

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bid for this portion of the overall ro'ect as the make policy decisions about financing, rate`+''�1" 3 P J Y adjustments and bond sales before the end of the calendar year 2004. Staff will recommend via an updated project financing plan that the City Council consider the issuance of revenue bonds for the SBSA work and possibly the first phase of City distribution system and customer site retrofits. 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 with SBSA 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 repo�t 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. The updated financing plan will reflect higher construction costs and the Council will be presented with options to mitigate impacts to existing and future water customers. � Peter Ingram C hang Ed Everett Director, Public Works Services Manager, Engineering & Construction City Manager Attachments (None) . A complete set of plans and specifications are available for review in the office of the City Clerk. Page 3 of 3 ... _ ,. .� ._. .