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38 <br />SEWER RATE s -ru oy I City of Santa Ana, CA <br />Table 13: Economic Impacts of Delaying Proposed CIP <br />Households $129,700 - $1,078,500 Total household claim payments. <br />Businesses $324,100 - $2,696,300 Total business claim payments. <br />Local Economy $1,577,400 - $13,122,200 Range depends on the severity of breaks. <br />Total $2,031,200- $16,897,000 <br />Based on the analyses of revenues and revenue requirements, it is evident that regardless of the level of <br />CIP activity, the Sewer Enterprise needs a rate revenue increase in order to meet revenue requirements <br />and working capital reserve as a standalone enterprise. The suggested adjustments are summarized <br />below for Scenario 1 in Table 14 and are shown on Lines 2 through 6 of Table 12. <br />Table 14: Proposed Rate Adjustments — Scenario 1 <br />FY 14/15 March 1 8.8% <br />FY 15/16 July 1 8.8% <br />FY 16/17 <br />July 1 <br />8.8% <br />FY 17/18 <br />July 1 <br />8.8% <br />FY 18/19 <br />July 1 <br />8.8% <br />With these adjustments, the City should be able to accomplish its objectives under the assumption that <br />no significant change occurs. While the financial plan should be a working document, the Sewer <br />Enterprise will need to re- examine the rate structure prior to FY 18/19 to verify it is still adequate. <br />The revenue requirements of the Sewer Enterprise consist of system O &M expenses, routine capital <br />outlay for minor expenditures on equipment not financed from bond proceeds, debt service <br />requirements on existing and proposed bonded debt, transfers to other funds, and reserve <br />requirements to ensure that debt service coverage, rate covenant requirements, and adequate levels of <br />working capital are met. <br />As shown on Line 20 in Tables 11 and 12, total revenue requirements for the Sewer Enterprise increase <br />during the study period and can be correlated with projected increases in staffing, inflationary factors <br />and additional R &R requirements. For the Status Quo Scenario, the total revenue requirements will <br />increase from a low of $7,136,100 in FY 14/15 to a high of $10,209,200 in FY 15/16. For Scenario 1, total <br />65B -197 <br />NOVEMBER 2014 <br />