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SEWER RATE STUDY I City of Santa Ana, CA <br />Table ES - 1: Annual Inspection and Replacement Budget Table (2012 Dollars) <br />Yearl <br />$541,700 <br />$788,700 <br />$1,330,400 <br />$1,330,400 <br />Year2 <br />$541,700 <br />$788,700 <br />$1,330,400 <br />$2,660,800 <br />Year3 <br />$261,000 <br />$875,400 <br />$1,136,400 <br />$3,797,200 <br />Year <br />$1,521,600 <br />$1,521,600 <br />$5,318,800 <br />Year 5 <br />$1,521,600 <br />$1,521,600 <br />$6,840,400 <br />Total <br />$1,344,400 <br />$5,496,000 <br />$6,840;400 <br />After the 5 -year Study Period, Black & Veatch recommends that the CIP include an annual level of R &R <br />main replacements. At a minimum, Black & Veatch suggests that the City invest approximately $4 million <br />annually into infrastructure needs. <br />Sewer Enterprise Financial Plan <br />In developing the financial plan for the Sewer Enterprise, Black & Veatch analyzed the level of revenue <br />adjustments needed to support the operational and capital needs of the utility. As a point of <br />comparison, Black & Veatch also analyzed the impact on the utility should the City elect to forego rate <br />increases and maintain the same level of infrastructure investment. As seen in Figure ES 3, the Sewer <br />Enterprise does have sufficient cash on hand to meet ongoing 0 &M obligations and address a small <br />amount of infrastructure needs, but it does not have sufficient funds to make emergency repairs or <br />address critically affected assets. By FY 15/16, the Sewer Enterprise's revenue requirements will exceed <br />revenues and will require the Enterprise to dip into its working capital reserve. The annual deficit cash <br />grows from ($1.8 million) in FY 15/16 to ($3.9 million) by FY 18/19 and creates an ending cash balance <br />deficit of ($14.1 million). <br />12 <br />[INTENTIONALLY LEFT BLANK] <br />65B -171 <br />N0VE1VeEe zoi� <br />