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City of Santa Ana, CA I SEWER RATE STUDY <br />Table 10: CIP Financing Plan -Scenario 1 <br />Beginning Balance <br />Sources of Funds <br />Debt Proceeds <br />Transfers from Operating Fund <br />Interest Income <br />Total Sources of Funds <br />Uses of Funds <br />Capital Improvements <br />Debt Issuance Expenses <br />Total Uses of Funds <br />Ending Balance <br />1,792.3 1,518.1 1,109.7 <br />=Y 16/17 1 <br />FY 17/18 <br />1 FY 18/19 <br />0.0 <br />0.0 <br />0.0 <br />0.0 <br />13,500.0 <br />0.0 <br />0.0 <br />0.0 <br />1,246.8 <br />2,250.0 <br />500.0 <br />500.0 <br />525.0 <br />525.0 <br />9.8 <br />16.4 <br />76.3 <br />125.7 <br />92.2 <br />39.8 <br />$1,256.6 <br />$2,266.4 <br />$14,076.3 <br />$625.7 <br />$617.2 <br />$564.8 <br />1,530.8 <br />2,674.8 <br />3,477.9 <br />2,722.7 <br />3,868.2 <br />5,706.3 <br />0.0 <br />0.0 <br />607.5 <br />0.0 <br />0.0 <br />0.0 <br />$1,530.8 <br />$2,674.8 <br />$4,085.4 <br />$2,722.7 <br />$3,858.2 <br />$5,706.3 <br />1,518.1 <br />1,109.7 <br />11,100.6 <br />9,003.6 <br />5,752.6 <br />611.1 <br />Based on the proposed CIP summarized above, the Sewer Enterprise will need to issue debt through <br />revenue bonds in FY 15/16 under Scenario 1 to allow the utility to catch up with deferred activities. The <br />proposed debts is indicated above assume the following service terms: 20 -year payment period, 5.5 <br />percent annual interest rate, 2 percent issuance expense, and issuance of a surety bond equal to 2.5 <br />percent of the nominal debt issuance. Black & Veatch has further assumed that the rate covenant will <br />require a 1.25 coverage ratio. <br />Operating Fund Financing <br />Summarized in Tables 11 and 12 are the proposed long -term operating financial plans for the Sewer <br />Enterprise under each scenario. Table 11 summarizes the financial results should the City elect to carry <br />out the CIP in the absence of revenue adjustments (Status Quo Scenario) and Table 12 shows the plan <br />for the preferred option (Scenario 1). The intent of the financial plan is to generate sufficient funds to <br />cover short-term and long -term expenses. Sources of revenue include sewer sales under existing rates, <br />additional revenues realized from proposed rate adjustments, miscellaneous revenue and interest <br />earnings on available balances. As mentioned, other miscellaneous revenue includes trust agency <br />revenue, and security fee charges. Uses of funds include operation and maintenance expenses (including <br />water purchases), routine capital outlay, debt service payments, and transfers to other funds such as the <br />capital fund. <br />BLACK & VEATCH I Sewer Rate Study <br />65B -192 <br />33 <br />