65B - PROPOSED WATER AND SEWER RATE ADJ

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City of Santa Ana, CA I WATER RATE STUDY Figure -6: Projected Revenues and Revenue Requirements – Status Quo: No Revenue Increases [ *] a us uo: Projected Revenue and Revenue 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 ® Water Purchase 6...d Annual Capital Outlay ® Debt service � Capital Projects -01ho-Revenue Target Cash Balance —*--Cash Balance [ *I FY 14/15 revenues include one -time receipt of funds from water bond refinancing activities. In the event that the City should elect to delay CIP activities, it does allow the Water Enterprise to 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 (FAE 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 12 summarizes the cost of not executing the proposed CIP using the FAE Report methodology. Table 12 does not include the cost of replacing the asset. Table -12: Economic Impacts of Delaying the 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 Water Fate Study M Ll • Total household claim payments. Total business claim payments. Range depends on the severity of breaks. 37