65B - PROPOSED WATER AND SEWER RATE ADJ

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City of Santa Ana, CA Figure ES -4: Projected Revenues and Revenue Requirements — Status Quo [ *] Status Quo: Projected Revenue and ROVue Requirements $80,000 in $000's $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 - $10,000 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19 ® O &M Expenses o Water Purchase V-J Annual Capital Outlay -- Debt service to Capital Projects -qb--Revenue Target Cash Balance Cash Balance [ *] FY 14/15 revenues include one -time receipt of funds from water bond refinancing activities. Delaying CIP activities does stretch out available cash; however, continued deferral of needed CIP projects also increases the probability, consequence and cost of asset failure. As a rough approximation, Black & Veatch estimated the cost of continuing to defer CIP projects using the methodology set forth in the American Society of Civil Engineers' (ASCE's) 2012 Failure to Act Economic Report for Water (FAC Report). The FAC Report notes that in addition to the actual repair /replacement costs, there are costs associated with payment of claims to impacted households and businesses. Additionally, if projects are deferred by several years, there is an economic loss due to lost water supply, loss of jobs, lost work days, business closures, traffic delays, street repairs, etc. Table ES 3 summarizes the cost of not executing the proposed CIP using the FAC Report methodology. Note that Table ES 3 does not include the cost of replacing the asset or the cost of regulatory fines. Table ES -3: Economic Impact of Delaying Proposed CIP Households $366,000 - $1,314,600 Businesses $917,100- $3,286,500 Local Economy $4,463,100 - $15,994,300 Total $5,747,000 - $20,595,400 BLACK & VEATCH I Executive Summary Total household claim payments. Total business claim. payments. Range depends on the severity of breaks. Includes impacts such as road closures, cost of sinkhole repairs, addressing health & safety issues, etc. 65B -19 7