ARCH 11, 2010 11, 2010 P ROJECT ROJECT G OALS OALS Future water - PowerPoint PPT Presentation

M ARCH ARCH 11, 2010 11, 2010

P ROJECT ROJECT G OALS OALS � Future water supply Future water supply through 2050 � Reduces migration of contaminants into the water supply l

P ROJECT ROJECT C HANGES HANGES � Initial project was planned for 100 million Initial project was planned for 100 million gallons per day (MGD), implemented in four phases � Phase I diverts 10 MGD into the aquifer � Phase II diverts 30 MGD at a cost of $250 million illi

1) $2 surcharge approved in August 2009 and a 5% increase effective January 1, 2010 J y , 2) Operational and capital expenses cut 3) Water Utility continues to experience financial difficulty

1) D 1) D ECLINE IN D AILY AILY C ONSUMPT ECLINE IN ONSUMPTION ON � Projections: 59.5 MGD – 63.0 MGD Projections: 59.5 MGD 63.0 MGD � Actual: 54.8 MGD in 2008/54.6 MGD in 2009 � Decrease of 12.9% since 2006 65 60 High Projection Low Projection 55 Actual 50 2004 2005 2006 2007 2008 2009

2) F 2) F LAWE LAWED F INANCIAL INANCIAL P ROJECTIONS ROJECTIONS � Principal and interest payments too low � For first 10 years annual additional principal and � For first 10 years, annual additional principal and interest is needed to meet standard requirements 3) 3) S EWER 3) S EWER 3) EWER M AIN EWER M AIN AIN E XPANSION AIN E XPANSION XPANSION P ROGRAM XPANSION P ROGRAM ROGRAM ROGRAM � Utility has cash funded oversized utility lines � Average annual cost was $2 million – last two years totaled $20 million totaled $20 million 4) C 4) C OMPL IANCE I SSUES OMPLIANC SSUES � Debt service coverage ratio projected to go below 1 2 Debt service coverage ratio projected to go below 1.2 � Cannot issue additional bonds without new revenue

M UST UST I SSUE SSUE 2010 D 2010 D EBT EBT � Need to issue a total of $103 million Need to issue a total of $103 million � Would not complete ASR Phase II Minimu Minimum Additi ddition onal Debt Debt Current Projects $44,000,000 ASR Contracts S C $ 9 000 000 $59,000,000 TOTAL TOTAL $103,000,000 103,000,000

� Seek approval of 15% rate increase in June � Initiate third-party review of ASR and I i i hi d i f ASR d financing � Change in Water Utility management � Increase oversight by the Finance Dept � Increase oversight by the Finance Dept � Adopt Charter Ordinance � Issue debt, dependent on ASR review

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