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HomeMy WebLinkAboutAgenda Bill 4BPart2 06/21/2010WASTEWATER ROLLBACK INITIATIVE IMPACT ANALYSIS - 9212 REPORT October 13. 2009 Year 2009 Average Household Monthly Wastewater Bill Average Household Monthly Wastewater Bill, 2011 Petaluma itiative Rate.x2009_.Rates for. Other Cities Baseline Financial Analysis • Previously approved wastewater rates provide sufficient revenue for: • Ongoing operations & maintenance • Existing debt obligations • Replacement/rehabilitation capital improvements • New debt to pay off lines of credit (LOCs) and fund planned capital improvement projects • Maintaining a 33% operating reserve ($3.7 million) • Debt service coverage obligations Existing Debt Obligations • 2000 Wastewater Revenue Bonds • Outstanding principal balance = S5.9 million • Annual debt service = S720.000 • 2005 SWRCB SRF Loan • Estimated total loan balance = S122 million • Estimated annual debt service = S7.8 million • First payment due April 2009 • 2005 Lines of Credit (LOCs) • Estimated total LOC balance = S26.7 million • Full repayment due August 1, 2010 Key Elements of Baseline Plan • LOCs to be paid off by issuing new wastewater revenue bonds in 2010 • Estimated par amount of bonds = S29.4 million • Estimated annual debt service = S2.1 million • Major capital projects funded with new wastewater revenue bonds issued in 2010 • Estimated par amount of bonds = S21.0 million • Estimated annual debt service = S1.5 million • Previously approved rate plan sufficient to meet all financial obligations Initiative Impact Analysis • Ability to issue new debt to pay off LOCs is uncertain with pending initiative election • Maybe 'reportable event" • Wastewater utility has insufficient cash to pay off the LOCs • If most capital program is halted, and only minimal reserves maintained. the utility would still be short about S12 million in August 2010 to pay off LOCs • Failure to meet existing obligations would be a "reportable event" If Initiative Passes in Nov. 2010: • Reduction in wastewater rates would violate SRF loan agreement and 2000 wastewater bond covenants • If cash had been used to pay off LOCs. then the wastewater utility would have insufficient cash for SRF loan payment due in April 2010. • The wastewater utility would also have insufficient cash for the 2000 WW revenue bond payment due in May 2010 Steady -State Revenues and Expenses FY 11-12 Revenues FY 11-12 Expenses 512.7 Mullion 522.1 Million + Oper. & Rate Maint_ Revenue . Debt m Other Service Revenue CiP S 12.6 S85 S12.0