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HomeMy WebLinkAboutResolution 2007-023 N.C.S. 01/22/2007 Resolution No. 2007-023 N.C.S. of the City of Petaluma, California A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA ADOPTING A NEW RATE SCHEDULE FOR WASTEWATER SERVICE AND RESCINDING RESOLUTION NO. 2002-189 N.C.S. WHEREAS, the City of Petaluma operates and maintains a wastewater collection, treatment, disposal and recycling system; and, WHEREAS, on August 4, 2006, the City entered into a loan Agreement with the State of California and as part of the Agreement made contractual assurances that it would adopt a system of charges to assure reasonable recovery of costs from recipients of the service; and, WHEREAS, wastewater services cun•ently provided by the City include collection, treatment, and discharge of treated wastewater, treatment and distribution of recycled water, and collection and disposal of storm water, and use of the term "wastewater services" herein refers to all of those services; and, WHEREAS, the City retained Bartle Wells Associates to develop a Wastewater and Water Rate Study and Financial Plan ("Study"); and, WHEREAS, the Petaluma City Council conducted a public meeting on the proposed rates pursuant to the Study on October 16, 2006; and, WHEREAS, notices of proposed rate increases and the public hearing were sent to record owners of properties that would be impacted by the proposed increases on October 19, 2006; and, WHEREAS, a notice on the proposed rates increases and the public hearing was published in the Petaluma Argus-Cour°ier on November 1, 2006; and, WHEREAS, the Petaluma City Council conducted public hearings on the proposed rate increases on December 4, 2006, December 18, 2006, and January 22, 2007, and received testimony and considered all evidence presented regarding the proposed rate increases; and, WHEREAS, a majority of the record owners of properties that would be impacted by the rate increases did not protest the increases; and, WHEREAS, after due consideration, the Petaluma City Council finds based on the Study that: 1. The proposed rates as presented herein are necessary to achieve full recovery of the costs of providing wastewater services to residents and businesses in Petaluma; 2. The proposed rates as presented herein will not generate revenue in excess of the cost of providing wastewater services; Resolution No. 2007-023 N.C.S. Page 1 3. The proposed rates as presented herein will not be used for purposes other than providing wastewater services; 4. The rates or charges imposed on any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel; 5. Proper notice of the proposed rate increases were given to record owners of properties that would be impacted by the proposed increases, as prescribed by law; and 6. A majority of record owners of properties that would be impacted by the proposed increases did not protest the proposed rate increases; and WHEREAS, adoption of revised rates and charges pursuant to this resolution involves the establishment, modification, restructuring or approval of rates and charges, as identified and analyzed in the Study, including rates and charges to obtain funds for meeting operating expenses, purchasing or leasing supplies, equipment or materials, meeting financial reserve needs and requirements and/or obtaining funds for capital projects necessary to maintain service within existing service areas. Therefore, adoption of this resolution setting rates and charges is not a project under the California Environmental Quality Act pursuant to California Public Resources Code Section 21080(b)(8)(D) and 14 Cal. Code Regs. Section 15273. NOW, THEREFORE, BE IT RESOLVED, that the Petaluma City Council hereby rescinds Resolution 2002-189 and adopts this resolution in its stead, effective February 1, 2007. ARTICLE I GENERAL SECTION 1.1 PURPOSE. (A) Findings. The above recitals are hereby declared to be true and correct and to be findings of the City Council of the City of Petaluma and are made a part of this resolution. (B) Revenue. The purpose of the wastewater service charge is to raise revenue for the cost of operation and maintenance of the City of Petaluma's wastewater utility used for the collection, treatment, disposal, and recycling of domestic wastewater, industrial wastewater, commercial wastewater, and for payment of principal and interest on bonds and capital recovery costs, and for collection and disposal of storm water. (C) Resolution. The purpose of this resolution is to establish a method of sharing the cost of the operation and maintenance of the City's wastewater utility among the users of wastewater service. (D) Study. This resolution and the wastewater charges established in this resolution are based on the Wastewater and Water Rate Study and Financial Plan prepared by Bartle Wells Associates ("Study"). The Study is attached to and made a part of this resolution as Exhibit A. Resolution No. 2007-023 N.C.S. Page 2 ARTICLE II DEFINITIONS SECTION 2.1 DEFINITIONS. "Accessory Dwelling" means as specified in Article 21 of the Petaluma Zoning Ordinance. "BOD" means biochemical oxygen demand. "Director" means the Director of Water Resources and Conservation, or his/her designee. "Dwelling Unit" means: (a) Any single-family residential dwelling or mobile home designed for occupancy by one family, each of which shall be deemed equivalent to one dwelling unit, and (b) Any duplex, triplex, fourplex, townhouse or condominium, apartment house, lofts, mobile home park or other multi-residential establishment, designed for occupancy for living purposes by more than one family, which is divided into separate residential units, each of which is designed for occupancy by one family only, each resident unit shall be deemed equivalent to one dwelling unit. For example, an apartment complex with 10 apartments shall be considered to have 10 dwelling units. "hcf' means hundred cubic feet. One hcf is equivalent to 748 gallons. "Low Strength" means Non-residential User wastewater with a BOD concentration of less than or equal to 350 mg/L and a TSS concentration of less than or equal to 300 mg/L. "High Strength" means Non-residential. User wastewater with a BOD concentration of greater than or equal to 701 mg/L and a TSS concenhaton of greater than or equal to 451 mg/L. "Medium Strength" means Non-residential User wastewater with a BOD concentration of 351 to 700 mg/L and a TSS concentration of 301 to 450 mg1L. "Metered Industrial Users" means aNon-residential User whose wastewater discharge is metered and whose wastewater service charge is based on laboratory analysis of the user's wastewater. Users placed in this category shall be as determined by the Director. "Non-residential User" includes, but is not limited to, any commercial, industrial or institutional customer. "Residential User" means any single-family residential dwelling or mobile home designed for occupancy by one family, and any duplex, triplex, fourplex, townhouse or condominium, apartment house, mobile home park or other multi-residential establishment, designed for occupancy for living purposes by more than one family, which is divided into separate residential units, each of which is designed for occupancy by one family only. "TSS" means total suspended solids. "Unmetered Residential" means Residential Users whose potable water is provided in part or in whole by a water source other than the City of Petaluma. ARTICLE III RATES SECTION 3.1 FIXED MONTHLY FEES. (A) Residential Users. The fixed monthly fee for Residential Users, per dwelling unit, shall be as set forth in Table 1. (B) Non-residential Users. The fixed monthly fee for Non-residential Users shall be as set forth in Table 1. Resolution No. 2007-023 N.C.S. Page 3 Table 1. Fixed Monthly Wastewater Charges Wastewater Customer Fixed Monthly Charge For Billings Rendered On Or After the Classification Dates Indicated Below Feb. 1, January 1, January 1, January 1, January 1, 2007 2008 2009 2010 2011 Single-Family Residential ($/mo) $10.29 $11.63 $13.14 $14.85 $16.78 Multi-Unit Residential, er dwellin unit $/mo $10.29 $11.63 $13.14 $14.85 $16.78 Unmetered Residential, er dwellin unit $/mo) $49.96 $56.45 $63.79 $72.08 $81.45 Commercial ($/mo) Low-Strength $10.29 $11.63 $13.14 $14.85 $16.78 Medium-Strength $10.29 $11.63 $13.14 $14.85 $16.78 Hi h-Stren th $10.29 $11.63 $13.14 $14.85 $16.78 Metered Industrial Users ($/mo) $10.29 $11.63 $13.14 $14.85 $16.78 (C) Fixed Monthly Fee Annual Increases. Beginning January 1, 2012 and each January 1 thereafter, fixed monthly fees shall increase by three and one-half percent (3.5%). SECTION 3.2 USER CHARGES. (A) Residential Users. In addition to the fixed monthly fee set forth in Section 3.1, there shall be a user charge for Residential Users as set forth in Table 2, based on the amount of wastewater discharged. The amount of wastewater discharged shall be established based on the average amount of water used each month during the winter months. The winter months shall generally be December, January and February, but actual winter months used for this determination may vary depending individual billing cycles, as determined by the Director. The average becomes effective each July and is based on the most recent average winter water usage. (B) Non-residential Users. In additional to the fixed monthly fee set forth in Section 3.1, there shall be a user charge for Non-residential Users, based on the .amount of water used or discharged, as set forth in Table 2. (1) User Charge For Non-Residential Users with Shared Water Meters. If a water meter is used by Non-residential Users in different customer classes, the user charge shall be based on the Non-residential User with the higher wastewater strength. For example, if a Low Strength user and a High Strength user use the same water meter, the wastewater user charge shall be based on the High Strength user rate. (2) Commercial Customers. Commercial customers shall be assessed a variable user charge based on the strength of the wastewater, Low, Medium, or High. Assignment to Low, Medium, or High strength shall be as determined by the Director, or based on laboratory analyses of the Non-residential User's wastewater. A State of California Certified laboratory must conduct the laboratory analysis. (C) User Charles Annual Increases. Beginning January 1, 2012 and each January 1 thereafter, user charges shall increase by three and one-half percent (3.5%). Resolution No. 2007-023 N'.C.S. Page 4 Table 2. Variable Wastewater User Charges Wastewater Customer Variable User Charge For Billings Rendered On Or After the Dates Classification Indicated Below January 1, January 1, January 1, January 1, Feb. 1, 2007 2008 2009 2010 2011 Single-Family Residential ($/hc fl $4.88 $5.51 $6.23 $7.04 $7.96 Multi-Unit Residential ($/hcf) $4.88 $5.51 $6.23 $7.04 $7.96 Commercial ($/hcf) Low-Strength $4.86 $5.49 $6.20 $7.01 $7.92 Medium-Strength $5.78 $6.53 $7.38 $8.34 $9.42 Hi h-Stren th $7.48 $8.45 $9.55 $10.79 $12.19 Metered Industrial Users Flow ($/hcfl $3.62 $4.09 $4.62 $5.22 $5.90 BOD ($/lb) $0.35 $0.40 $0.45 $0.51 $0.57 TSS ($/Ib) $0.38 $0.43 $0.49 $0.55 $0.63 SECTION 3.3 SPECIAL CHARGES AND FEES. (A) Sample Collection and Laboratory Analysis. The City shall charge for samples collected by the City and analyzed by the City or an outside laboratory for the purpose of deternlining wastewater charges. Charges shall be assessed for collecting the sample and for laboratory analysis of the sample. (1) Collection Charles. (a) For the Purpose of Determining Wastewater Charges. The charge for collecting a "grab" sample shall be $75. The charge for collecting a "composite" sample shall be $250. (b) For Violation Follow-~Up Sampling. The charge for collecting a "grab" sample shall be $100. The charge for collecting a composite sample shall be $350. (2) Laboratory Analysis Charges. (a) Outside Laboratories. Samples analyzed by outside laboratories shall be charged at cost per sample. (b) City Laboratory. Samples analyzed by the City's laboratory for conventional polhrtants shall be $125 per sample. (B) Septic Waste. Discharge of septic waste shall be charged at $0.25 per gallon of discharge. Discharge may not occur without a permit. (C) Short-Term Discharge. A short-term discharge fee is hereby established at $0.06 per gallon, with a $500.00 minimum fee, plus a pernlit fee of $200.00. These fees shall apply to direct temporary discharges from a point of discharge for which a City connection charge is inapplicable or for which connection charges sufficient to address the temporary discharge have not been paid., including, but not limited to, temporary discharges of groundwater. Discharge may not occur without a permit and may not continue for more than one year from the effective date of permit. If the discharge period does continue beyond one year, discharger will be assessed applicable and then-current wastewater service and connection fees. The decision to accept. any such temporary discharge and all requirements pertaining to the acceptance of such temporary discharge, wastewater service charges, shall be based on an evaluation of the effect on capacity, compliance with regulations, and any other factors that could affect the overall operations of the wastewater treatment facility. Such discharges shall fiilly comply with all applicable federal, state and local laws, regulations and orders, including, Resolution No. 2007-023 N.C.S. Page 5 but not limited to, the City's sewer use regulations as described in Sections 15.48 through 15.76 of the Petaluma Municipal Code. SECTION 3.4 RATES FOR WASTEWATER USERS OUTSIDE OF THE CITY LIMITS. (A) Residential Users. Residential users outside of the City limits shall be charged $0.80 per month for each dwelling unit in addition to the charge set forth in Section 3.1. (B) Non-Residential Users. Non-residential users outside of the City limits shall be charged $0.80 per month for each account in additional to the charge set forth in Section 3.1. Under the power and authority conferred upon this Council by the Charter of said City. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the v d as to Council of the City of Petaluma at a Regular meeting on the 22°d day of January, fo 2007, by the following vote: City ttomey AYES: Barrett, Harris, O'Brien, Rabbitt, Mayor Torliatt NOES: Vice Mayor Nau 1 ABSENT: None ~ ABSTAIN: None ~t s ATTEST: " ~ L/f City Clerk Mayor Resolution No. 2007-023 N.C.S. Page 6 EXHIBIT A TO RESOLUTION 2007-023 N.C.S. ADOPTINCJ WASTEWATER REVENUE PROGRAM WATER & WASTEWATER RATE STUDY AND FINANCIAL .PLAN Resolution No. 2007-023 N.C.S. Page 7 The City's water resources rate structures were previously analyzed in 2001. The information from the 2001 analysis resulted in the following key changes to the rate structure: • To encourage water conservation, water rates were converted from a flat per unit rate structure to increasing block or tiered rates. • To encourage water conservation and provide better equity, residential wastewater charges were converted from a fixed monthly flat fee to a consumption charge, based on average winter- time water usage. The Department of Water Resources and Conservation engaged the services of Bartle Wells Associates (Berkeley, CA)' to develop a wastewater and water rate study and financial plan. The rate study analyzed the approved budgets for FY 06-07, prior year revenue and expenditures, projected future revenue, and the projected future costs of operations and maintenance. The water and wastewater models are attached. Water Analysis Our goal was to build a comprehensive financial model along with water rate recommendations that allow the City to: • Meet current and future operating expenses of the utility; • Support the replacement and rehabilitation of existing infrastructure; • Support the construction of new capital facilities required for growth and expansion of the system; and • Where possible, mimnize the impact of required rate adjustments on the City's utility customers. Existing Rates and Charges The water enterprise bills customers bi-monthly. There are two components to water service charges. The City assesses a fixed, bi-monthly charge based on the size of the meter in service. For a typical single family dwelling with a 5/8" meter, this charge is currently $7.58 for two months of service. The City also assesses a variable, consumption-based charge for all water consumed by the customer. Customers are billed a quantity rate for each hundred cubic. feet (hcf) consumed. For residential customers, these rates are "tiered" such that the cost of the first twenty units of water in a two month period are currently $2.16 per hcf, while the unit cost of the next thirty two units ofwater (up to 52 total hcf in two months) are billed at a quantity rate of $2.37 per hcf. All consumption above 52 hcf in a two month period is billed at a rate of $2.61 per hcf. ' BWA is a public finance consulting firm with over 40 years' experience providing independent, objective financial advice to public agencies throughout California. Resolution No. 2007-023 N.C.S. Page 8 Commercial customers pay one flat rate for all water consumed ($2.07). The City also assesses aone-time capacity charge (also known as a connnection fee) to new customers connecting to the water system. This fee is variable and is calculated seperately for each new connection. They vary based on whether or not the water infrastructure was City- or developer-provided. Water Enterprise Finances Revenues. The.City's water enterprise generates the vast majority of its revenues from service charges and water sales. For the year ending June 30, 2006, the City collected approximately $8.5 million in water sales revenue and $900,000 in fixed monthly service charges. During the same time period, the City also collected approximately $1.1 million in water connection fees. This is significantly above the five-year average annual connection fee revenue collected, which is approximately $620,000. The balance of the water enterprise's revenue comes from interest earnings and other miscellenous revenues. Expenses Operating expenses for the water enterprise include salaries and benefits for City staff, the cost of purchasing water, maintenance on water lines and connnections, and utilities for pumping and delivery of the water: The water enterprise also transfers a portion of its revenue to the City of Petaluma's General Fund to cover its share of administrative and billing costs incurred by other city staff (such as in the utility billing office). Total operating expenses (before debt service) for the year ending June 30, 2006 were $7.4 million, with another $1.7 million in intragovernmental transfers to the General Fund. Debt The water enterprise issued bonds in 20012. Annual debt service on this issue is approximately $650,000, and there is approximately $9 million in principal outstanding. Debt covenants require that the City generate operating revenues in excess of expenses at least 1.25 this amount.- The City is permitted to maintain a rate stabilization and debt service reserve fund for the purposes of meeting this coverage requirement. Notably, the City has been very close to missing its debt coverage requirements over the past two . fiscal years. Net operating revenues have been insufficient to meet debt service, with coverage being met by the existence of sufficient operating reserves. Should the City wish to issue more debt in early 2007, rates would certainly have to be increased to meet this shortfall. ' Proceeds from the 2001 bonds were used for payment of prior bonds ($4.6 million), which had an uncompetitive interest rate, acquisition of property for the Paula Lane Reservoir No. 2 ($424,000), water main replacement projects ($2.2 million), and construction of the Water Field Office ($2.6 million). Resolution No. 2007-023 N.C.S. Page 9 Fund Reserves As of July 1, 2006, the water enterprise had approximately $2.6 million in its operating fund. This amount includes a 60-day operating and maintenance reserve of approximately $1.6 .million and an emergency capital replacement and improvement reserve of approximately $600,000. The City does not, as of Oct 1, 2006, maintain a rate stabilization or debt service reserve, but there are plans to form one. Capital Pro;;ram The water enterprise will incur capital costs associated with the constnlction of the Paula Lane Reservoir No. 2 in late 2006/07. Total design and construction costs are estimated at $2 million. The City is also planning to install automatic read meters for all customers over the next 5 to 7 years. It is estimated that this project will cost approximately $500,000 per year during that time. Additional capital costs include the annual repair and replacement of aging water mains. The City currently invests about $500,000 per year in its water main and service replacement program. In order to adequately maintain the City's water infrastructure, this investment will increase to $1,000,000 per year. Future Debt The City anticipates selling water revenue bonds in early calendar year 2007 to fund construction of the reservoir, increase water main and service replacement investments, and the installation automatic read meters. The size of the issue would be approximately $6.5 million. The sale of these bonds is contingent on passing new rates effective January 1, 2007. Cash Flow Projection Bartle Wells developed aten-year cash flow projection for the water enterprise. The projection allows us to determine if rate increases are needed to meet future operating expenses as well as the capital program, and if so, what the size of these rate increases would be. Our projections are built on a number of assumptions. Among them: ® Operating expenses are projected to increase 3.5% per year; ® The City is expected to grow at an annual rate of .5%. This would add approximately 100 new water customers to the enterprise annually; a Annual connection fee revenue was estimated using the 5-year annual average; ® The City is interested in increasing the number of water tiers from three to four in order to increase the conservation incentive of the rate structure. We have proposed that the City set these tiers at 0 - 18 hcf, 19 - 36 hcf, 37 - 48 hcf, and all use above 48 hcf for bi-monthly use, or 0 - 9 hcf, 10 - 18 hcf, 19 - 24 hcf, and all use above 24 hcf for monthly use. This effectively lowers the first tier by a small amount (from 20 hcf to 18 hcf) and ensures that Resolution No. 2007-023 N.C.S. Page 10 more customers will be billed for water consumption in the third tier (for water use above 36 hcf). Additionally, the City is interested in "steepening" the tiers, that is, making the differences between each new tier larger. This would make the top tier water more expensive (relative to the lowest tier) than it is now. Taken together, both of these changes to the tier structures should serve to increase the incentive to conserve water. • Analysis of the fixed meter charge indicates that they are not currently in proportion with AWWA recommended meter ratios and demand factors. New meter charges should be phased in over three years to reduce or, if possible, eliminate these improper ratios. • With such a large portion (about 90%) of the water enterprises revenues coming from variable consumption water sales, it is particualrly important to verify estimates of the amount of water sold. Our revenue projections are based on total wateruse of 3.8 million hcf. This number is below the three-year average annual water sales and is chosen so as not to overestimate water sales revenue. • Our cash flow projection does not take into account a projected increase in the water connection fee that could take place in the next six to twelve months. The increase in this capacity fee is predicated on approval of the general plan and the projects included in it. While this plan would also require significant capital improvements. above and beyond those currently included in this plan, the increased connection fee revenues would offset these additonal projects. Rate Recommendations Residential Our analysis demonstrates that the City will require a series of moderate, incremental rate increases for its residential customers over the next five years. These increases are needed to meet rising costs of operation, increased capital spending on the replacement of aging water mains (which. will be funded by rates), and new debt service projected at $485,000 annually, starting in fisca12007/2008. Taken as a whole, the City needs to increase overall operating revenues somewhere between 14% and 16% between now and July 1, 2008. BWA has developed a rate schedule that allows the City to meet these revenue requirements while minimizing the impact of the increases on residents. It is recommended that the City pass two rate increases, one on January 1, 2007, and the second one year later, and that these rate increases be followed by a series of three smaller annual rate increases designed to allow the utility to keep up with cost inflation. The proposed water rate changes are illustrated in Table 1. Because the City uses a tiered water rate structure for its residential customers, the proposed rate increases will not affect all users uniformly. In fact, there is no way to put an exact percentage increase on each users bill. It will, by definition, vary according to how much water a consumer uses. However, because we have "steepened" the tiers, in general the highest residential water users will see the highest percentage increases. Low water users will see comparatively small increases. Resolution No. 2007-023 N.C.S. Page 11 In order to better understand how these recommended rate increases will impact water bills, we have developed "composite" rate increase numbers to show how "average" single family residential bills will. change from one year to the next. We developed three hypothetical customers: a "low" user who uses 8 hcf per monthly; an "average" user who uses 12 hcf per month; and a "high" user who uses 18 hcf per month. As illustrated in Table 2, in no year will an "average" customer of water experience more than a 10% rate increase. For the "average" customer, the annual water rate increases for the next 5 years would be 10%, 9%, 8%, 5%, and 4%. The impact of adding the fourth tier is evident in the "very high" customer's bill, which will increase by 20% in 2007, as compared to the "low" customer's anticipated increase of 9%. Commercial Commercial and mult-family residential customers are not billed in tiered rates; in addition to their bi-monthly meter charge, they pay one flat rate for all water consumed. This rate is currently $2.07, an amount below the first tier water price for residential customers ($2.16). CityManagement recommends that this quantity rate be increased to eliminate this "discounted" water; the proposed rate schedule includes an 18% increase for the quantity rate on January 1, 2007 for commercial customers. This puts commercial water between the first and second tier for single family residential users. City Management recommends that the commerical quantity rate stay between the first and second tier rate for residential users from this point forward. Sample commercial and multi-family water bills are illustrated in Table 2. Residential Char eg Comparison How do Petaluma's current and proposed water service charges compare to other communities? This comparison is provided in Table 3. As shown in Table 3, Petaluma's proposed rate for 2007 will remain less than average for the agencies included in the comparison. Wastewater Analysis The City engaged Bartle Wells Associates (BWA) to also develop a wastewater rate study and financing plan. The goal was to build a comprehensive financial model with rate recommendations that allow the City to: ® Meet current and future operating expenses of the wastewater utility; ® Support the replacement and rehabilitation of existing infrastructure; a Support the construction of new capital facilities, including the Ellis Creek Water Recycling Facility; and a Where possible, minimize the impact of required rate adjustments on rate payers. Resolution No. 2007-023 N.C.S. Page 12 Existing Rates .and Charges The wastewater enterprise bills customers bi-monthly. There are two components to each bill. The City assesses a fixed, monthly charge based on customer class (residential, commerical, industrial). This fixed charge is currently the same for all classes at $9.11 per month. The City also assesses aconsumption-based charge for wastewater discharged to the collection and treatment system. Because wastewater connections themselves are not metered, this charge is based on water consumption. Customers are billed one fixed consumption amount for the entire year. The amount is set each July to equal the average winter usage of a customer during the past year. In this way, the utility is adjusting for water used for irrigation and other outdoor purposes that is not discharged to the sewer system. All residential users are billed a flat quantity rate for their wastewater discharge. These rates are not tiered. The current quantity rate is $4.32 per hundred cubic feet (hcf). Under the current rate structure, a single family residence that discharges 15 hcf per bi-monthly billing cycle to the sewer system would be billed $83.01 (2 x $9.11 + 15 x $4.32). Commercial customers are grouped into three classes, based on the strength of the wastewater discharged to the sewer system. Low strength users are billed at a quantity rate of $4.30 per hcf; medium strength users at a quantity rate of $5.11 per hcf; and high strength users are billed at a rate of $6.62 per hcf. Industrial users are billed according to their specific discharges to the sewer system. Their flows are sampled by the City, and they are charged according to their flow, biochemical oxygen demand (BOD), and total suspended solids (TSS). The City also assesses cone-time capacity charge (also known as a connnection fee) to new customers connecting to the wastewater system. This charge is set to recover the costs of providing existing infrastructure to new users, as well as future capital improvements and expansions to meet new growth. In 2005/06, a new single family dwelling paid $3,506 to connect to the system Wastewater Enterprise Finances Revenues The City's wastewater enterprise generates the vast majority of its revenues from user charges. For the year ending June 30, 2006, the City generated approximately $12.1 million in user charges. During the same time period, the City collected $1.4 million in connection fee revenues. Resolution No. 2007-023 N.C.S. Page 13 Smaller amounts of income were generated by investment earnings and miscellaneous fees and charges. Expenses Operating expenses for the wastewater enterprise include salaries and benefits for City staff, the cost of treatment, maintenance on collection lines and connections, and utilities for pumping and delivery of the wastewater flows to the treatment plant. Expenses for operation and maintenance of the surface water system are also included in the wastewater enterprise. The wastewater enterprise also transfers a portion of its revenue to the City of Petaluma's General Fund to cover its share of administrative and billing costs incurred by other city staff (such as in the utility billing office). Total operating expenses (before debt service) for the year ending June 30, 2006, were $7.1 million, and intragovernmental transfers to the General Fund totaled $1.2 million. Debt The wastewater enterprise issued revenue bonds in 20003. Annual debt service on this issue is approximately $720,000, and there is approximately $7.4 million in principal outstanding. Debt covenants require that the- City generate operating revenues in excess of expenses at least 1.25 this amount. The City is permitted to maintain a rate stabilization and debt service. reserve fund for the purposes of meeting this coverage requirement. The City currently exceeds its debt coverage requirements for its wastewater revenue bonds by a significant margin. Fund Reserves As of July 1, 2006, the wastewater enterprise had approximately $6.0 million in fund reserves. BWA recommends that the City always maintain at least a 60-day O&M reserve (or approximately $1.5 million) for emergency repairs or expenses. Capital Program The wastewater enterprise is currently in the midst of an extensive capital improvement program. Construction of the Ellis Creek Water Recycling Facility began in October 2005 and is scheduled to be completed in 2009. Total project costs are expected to approach $150 million during that time. The addition of SCADA for the Ellis Creek WRF, further recycled water improvements (Phase II) and demolition of the Hopper WWTF in 2009/.10 will add another $20 million in project costs. All told, the city plans to invest upwards of $170 million in non-replacement capital projects between 2005/2006 and 2010/2011. Through FY OS-06, the City levied a 5% administrative charge for its role in managing capital projects for the utility. For the purposes of this study, it was assumed this fee would not be applied for FY 06-07 through FY 13-14. 3 The proceeds from this debt service were used for construction of the Pond Influent Pump Station Upgrade Project ($4.6 million), Lindberg Lane Sewer Main Replacement Project ($1.7 million), Disinfection Facility Upgrade Project ($300,000), and early planning and environmental documentation~for the Ellis Creek Water Recycling Facility-Project ($2 million). Resolution No. 2007-023 N.C.S. Page 14 Future Debt With only $6 million in available reserves, the City is expecting to finance almost 100% of the planned capital improvements. The City has SRF funding available for approximately $125 million of the Ellis Creek project costs. This funding can be drawn on at a rate of $25 million per year. The balance of capital project costs above this amount will be paid (at least in the interim) by a variable rate line of credit secured in 2005. The City expects to issue two different series of revenue bonds over the next five years. The first, in late fiscal 2006/07, will be used to fund the Phase II Recycled Water Improvements. The second, in 2010/11, will ~be used to refund the remaining balance on the line of credit. These two issues are currently sized at $12.5 and $26.2 million respectively. By 2010/11, when SRF payments are first due, the total combined debt service for these three new issues will total approximately $11.3 million. Additionally, as a condition of its SRF loan, the City must also form a replacement and rehabilitation reserve for the Ellis Creek facility, and fund that with approximately $690,000 per year. All told, the City can expect to meet no less than $12.0 million in new debt service by 2010/11. Put in perspective, the wastewater enterprise will be required to almost double its total revenues by that time. Cash Flow Pro: ec~ tion Bartle Wells developed aten-year cash flow projection for the wastewater enterprise. The projection allows us to determine if rate increases are needed to meet future revenue requirements, and if so, what the size of these rate increases would be. Our projections are built on a number of assumptions. Among them: ® Operating expenses are projected to increase 3.5% per year; ® The City is expected to grow at an annual rate of .5%. This would add approximately 100 new wastewater customers to the enterprise annually; m Annual connection fee revenue was estimated by multiplying the estimated 100 new connections by the existing capacity fee; ® Any proposed rate increases are applied uniformly to both fixed monthly charges and quantity charges. All customer classes are increased uniformly as well; and ® The line of credit is used to fund the General Fund capital administrative transfer of $3.9 million in 2007/08. Rate Recommendations As stated above, future capital expenditures and the resulting debt service will effectively double the revenue requirement of the utility by 2010/11. BWA investigated a number of rate increase Resolution No. 2007-023 N.C.S. Page 15 scenarios that would allow the City to meet this target. It was determined that steady, level increases are an important policy consideration. As such, our analysis has concluded that a series of five 13% annual rate increases, applied uniformly to both fixed monthly charges and variable consumption rates, would allow the wastewater enterprise to meet ongoing operating expenses and future debt service requirements. City Management recommends that these rates be put in place by January 1, 2007. The recommended wastewater rates are illustrated in Table 4. In order to better understand how these recommended rate increases will impact wastewater customers, we have developed "composite" rate increase numbers to show how "average" single family residential bills will change from one year to the next. We developed three hypothetical customers: a "low" user who discharges 5 hcf to the sewer every month: an "average" user who discharges 8 hcf per month; and a "high" user who discharges 12 hcf per month. Table 5 outlines how these three sample residential users would see their total wastewater bill change from one year to the next as a result of these recommend rate changes. Similar calculations are provided for non-residential customers. Residential Char eg_ Comparison How do Petaluma's current and proposed wastewater service charges compare to other communities`? Table 6 presents a comparison of Petaluma's monthly residential wastewater service charges with other communities. It should be noted that charges are dependent on a number of factors, including age of facilities, level of wastewater treatment provided, regulatory conditions, and type of services provided. Many communities listed in Table 6 have made or are in the process of making significant improvements to their facilities. As shown in Table 6, Petaluma's wastewater rate for 2007 will remain less than the average for the agencies included in the comparison. Resolution No. 2007-023 N.C.S. Page ]6 Resolution No. 2007-023 N.C.S. Page 17 Table 1 Recommended Water Rates Type of Charge Current Recommended Water Rates Rates 1-Jan- 1-Jan- 1-Jan- 1-Jan- 1-Jan-10 1-Jan- 06 07 08 09 11 Monthly Service Charges ($/mo) S/8" $3.79 $4.47 $4.92 $5.17 $5.42 $5.69 '/4" $3.79 $4.47 $4.92 $5.17 $5.42 $5.69 1" (residential) $4.55 $537 $5.91 $6.20 $6.51 $6.84 1" $4.55 $S.SS $6.11 $6.41 $6.73 $7.07 1.5" $7.57 $9.24 $10.72 $11.25 $11.81 $12.40 2" $10.98 $13.84 $16.05 $17.65 $18.54 $19.46 3" $21.21 $26.73 $33.14 $36.45 $38.27 $40.19 4" $27.27 $36.00 $44.64 $49.10 $51.SS $54.13 6" $39.39 $52.00 $64.48 $70.92 $74.47 $78.19 Consumption Charges ($/hcI) Single Family Residential (monthly) Tier 1 (0-10 heft 2.16 Tier 2 (11-26 hcfl 2.37 Tier 3 (27+ hcf) 2.61 Tier 1 (0-9 hc~ $2.31 $2.50 $2.70 $2.83 $2.94 Tier 2 (10-18 hcfl $2.61 $2.87 $3.10 $3.25 $3.41 Tier 3 (19-24 heft $3.00 $3.39 $3.73 $4.07 $4.35 Tier 4 (25+ he fl $3.24 $3.75 $4.13 $4.50 $4.82 Multi-Unit. Residential, Business, Industrial, $2.07 $2.44 $2.64 $2:80 $2.96 $3.14 Public Resolution No. 2007-023 N.C.S. Page 18 Table 2 Changes of Proposed Water Rates For Sample Customers Estimated Monthl Bill Amount Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Average Annual Current Monthly Monthly Water Use Water Type of Customer (hct) Bill Amount Increase Amount Increase Amount Increase Amount Increase Amount Increase Low 8 $21.07 $22.96 9% $24.89 8% $26.73 7% $28.07 5% $29.25 4% Sin le Famil Residential Average 1.2 $30.13 $33.09 10% $35.99 9% $38.72 8% $40.65 5% $42.43 4% Sin le Famil Residential High 18 $44.35 $48.73 10% $53.19 9% $57.30 8% $60.17 5% $62.92 5% Sin le Famil Residential Very High 50 $125.95 $150.89 20% $171.15 13% $187.06 9% $201.60 8% $214.25 6% Sin le Famil Residential 20-unit Apartment Building 65 $145.53 $172.61 19% $187.52 9% $199.41 6% $211.20 6% $223.69 6% 2" meter Office Building 58 $131.04 $155.51 19% $169.05 9% $179.84 6% $190.45 6% $201.69 6% 2" meter Restaurant 55 $124.83 $148.18 19% $161.14 9% $171.45 6% $181.56 6% $192.27 6% 1" meter Resolution No. 2007-02.3 N.C.S. Page 19 Table 3 Comparison of Monthly Water Charges for Average Single Family Residential Cuistomer Average Monthly Water Bill A enc (12 hcf/month Windsor $19.91 North Marin $27.20 Petaluma (current) $30.13 Petaluma (proposed for 2007) $33.09 Santa Rosa (2007) $34.70 Avera e o all a encies ,$35.57 Cotati $37.76 Rohnert Park $38.75 Sonoma $38.95 Marin Munici al $42.37 Healdsbur $47.39 Resolution No. 2007-023 N.C.s. Page 20 Table 4 Recommended Wastewater Rates Type of Charge Current Recommended Wastewater Rates Rates 1-Jan- 1-Jan- 1-Jan- 1-Jan- 1-Jan- 1-Jan- 06 07 08 09 10 11 Fixed monthl char a ($/mo Stele-Famil Residential $9.1 I $10.29 $11.63 $13.14 $14.85 $ 16.78 Multi-Unit Residential, per dwelling unit $9.11 $10.29 $11.63 $13.14 $14.85 $16.78 Unmetered Residential, per dwelling unit $44.21 $49.96 $56.45 $63.79 $72.08 $81_45_ - Commercial L~~w-Strength $9.11 $10.29 $11.63 $13.14 $14.85 $16.7 8 Medium-Strength $9.11 $10.29 $11.63 $ 13.14 $14.85 $16.78 Hi h-Stren th $9.11 $10.29 $11.63 $13.14 $14.85 $16.78 Metered Industrial Users $9.11 $10.29 $11.63 $13.14 $14.85 $16.78 Variable char e $lhc~ Sin le-Famil Residential $4.32 $4.88 $5.51 $6.23 $7.04 $7.96 Multi-Unit Residential $4.32 $4.88 $5.51 $6.23 $7.04 $7.96 Commercial Low-Strength $4.30 $4.86 $5.49 $6.20 $7.01 $7.92 Medium-Strength $5.11 $5.78 -$6.53 $7.38 $8.34 $9.42 Hi h-Stren th $6.62 $7:48 $8.45 $9.55 $10.79 $12.19 Metered Industrial Users Flow ($/hcfl $3.20 $3.62 $4.09 $4.62 $5.22 $5.90 BOD ($/Ib) $0.31 $0.35 $0.40 $0.45 $0.51 $0.57 TSS ($/lb) $0.34 .$0.38 $0.43 $0.49 $0.55 _ $0.63 J Resolution No. 2007-023 N.C.S. Page 21 Table 5 Changes of Proposed Wastewater Rates. For Sample Wastewater Customers Estimated Monthl Bill Amount Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Average Current Monthly Monthly Wastewater Wastewater Type of Customer Use (hcf) Bill Amount Increase Amount Increase Amount Increase Amount Increase Amount Increase Low 5 $30.71 $34.70 13% $39.21 13% $44.30 13% $50.06 13% $56.57 13% Sin le Famil Residential Average 8 $43.66 $49.34 13% $55.75 13% $63.00 13% $71.19 13% $80.44 13% Sin le Famil Residential High 13 $65.26 $73:74 13% $83.:33 13% $94.16 13% $106.40 13% $120.23 13% Sin le Famil Residential 20-unit Apartment Building 65 $462.94 $523.12 13% $5.91.12 13% $667.97 13% $754.80 13% $852.93 13% 2" meter Office Building 58 $258.39 $291.99 13% $329.94 13% $372.84 13% $421.30 13% $476.07 13% 2" meter Restaurant 55 $372.99 $421.48 13% $476.27 13% $538.19 13% $608.15 13% $687.21 13% 1 "meter Resolution No. 2007-023 N.C.S. Page 22 Table 6 Comparison of Monthly Wastewater Charges for Average Single Family Residential Customer Average Monthly Single Family Residential Wastewater Bill A enc (8 hcf/month) Novato Sanita District $28.50 Windsor $43.06 Petaluma (current) $43.66 Sonoma $45.75 Petaluma (proposed for 2007) $49.34 Avera e o all a encies $53.33 Rohnert Park $56.10 Santa Rosa (2007) $65.19 Healdsbur $67.88 Cotati $70.81 Resolution No. 2007-023 N.C.S. Page 23 l~®I)EL iJl~S Resolution No. 2007-023 N.C.S. Page 24 Table 1 City of Retaluma-Water Utility Funtl Cash Flow Projections Actual Estimate Budget Projected 2004/05 2005106 2006107 2007108 2008109 2009110 2010/11 2011112 2012/13 2013/14 Beginning Fund Balance $10,729 443 $4,541,726 $2,441,000 $5,552,000 $4,629,000 $4,293,000 $4.450,000 $5,025,000 $5,983,000 $6,737,000 Rate Stabilization Funtl $0 $0 $150,000 $165,000 $180,000 $195;000 $210,000 $225,000 $240,000 $255,000 Revenues Ooeralina Charges for sales' 9,174,000 8,551,000 8,655,000 9,727,000 70,591,000 11,364,000 12,063,000 12,717,000 13,283,000 13,795,000 Charges for services' 0 909,000 7,088,000 1,213,000 1,286,000 1,358,000 1,432;000 1,512,000 1,595,000 1,683,000 Investment earnings' 105,000 100,000 61,000 139,000 116,000 107,000 111,000 126,000 150,000 168,000 Other 881 200 0 200 000 207 000 214 000 221 000 229 000 237 000 245 000 254 000 Subtotal Operating 70,160,200 9,560,000 10,004,000 11,266;000 12,207,000 13,050,000 13,835.000 14,592,000 15,273,000 15,900,000 Capital Connection fees 447,603 1,063,319 619,000 638,000 657,000 677,000 697,000 718,000 740,000 762,000 Debt proceeds 0 0 6.364,000 0 0 0 0 0 0 0 Subtotal Capital 447,603 1,063,319 6,963,000 638,000 657,000 677,000 697,000 778,000 740,000 ~ 762,000 Transfers 8 Adiustments Transfer In/(Out) 49 000 0 0 0 0 0 0 0 0 0 Subtotal Transfers 8 Adjustments 49,000 0 0 0 0 0 0 0 0 0 Total Revenue, Transfers, and Adjustments $10,656,803 $10,623,319 $16,987,000 $11,924,000 $12,864,000 $13,727,000 $14.532 Ot':7 515,310.000 $1fi 1~t 3,000 $16,662 OOU Ezpenditures Ooeratin? Cost of sales" 4,800,000 4,332,370 4,464,000 4,641,000 4,803,000 4,971,000 5,145,000 5,325,000 5,511,000 5,704,000 Cost of services° 3,391,350 3,023,515 3,800,000 3,933,000 4,071,000 4,213,000 4,360,000 4,513,000 4,671,000 4,834,000 Intragovernmental Transfers (General Fund) 1.311,300 1.706.000 1.567.000 1.616.000 1.673.000. 1,732.000 1.793.000 1,856A00 1.921 000 1.988 000 Subtotal Operating 9,502850 9,061,885 9,845,000 10,190,000 10;547,000 10,916;000 11,298,000 71,694,000 12,703,000 72,526,000 Gaoital Non-replacement capita improvement projects 3,919,048 836,000 2,000,000 0 0 0 0 0 0 0 Replacement capital improvement projects 1,205,000 528,000 1,000,000 1,500,000 1,500;000 1,500,000 1,500,000 1 500,000 2,000,000 2,000,000 Capital outlays 212,750 0 0 0 0 0 0 0 0 0 Existing Debt Service 657,753 659,503 656,000 657,000 653,000 654,000 659,000 658,000 656,000 659,000 Projected Debt Service I 0 0 0 485 000 465 000 485 ODD 485 000 465/y00 485 000 485 000 Subtotal Capital 5,994,550 2,023,503 3,656,000 2,642,000 2,638,000 2,639,000 2,644,000 2,643,000 3,141,000 3,144,000 Transfers 8 Adiustments Projects-City Departments -Transfers 1,139,214 1,448,587 360,000 0 0 0 0 0 0 0 Capital admin/otherl5% GF overhead 208,106 40,000 0 0 0 0 0 0 0 0 Subtotal Transfers 8 Adjustments 1,347,320 7 488,587 360,000 0 0 0 0 0 0 0 Total Expenditures, Transfers, and Adjustments $16,844,520 $12,573,975 $13,861,000 $72,832,000 $13,185,000 $13,555,000 $13,942,000 $14,337,000 $15,244,000 $15,670,000 Net operating revenue (before debt service) 657,550 498,175 159,000 1,096,000 1,660,000 2,134,000 2,537,000 2,898,000 3,170,000 3,374,000 Nel total revenue (6,187,717) (1,950,656) 3,126,000 (908,000) (327,000) 172,000 590.000 973,000 769,000 992,000 Ending Fund Balance 4,541,726 2,591,070 5,567,000 4,644,000 4,308,000 4,465,000 5,040,000 5,998,000 6,752,000 7,729,000 Transfer to rate stabilization 0 0 (15,OOOj (15,000) (15,000) (75,000) (15,000) (15,000) (15,000) (;5,000) Reserve Fund Targets O8M (60 days) Reserve 1,584,000 1,510,000 ~ 7,641,000 1,698,000 1,758,000 1,819,000 7,883,000 1,949,000 2,017 000 2.088,000 Capital Replacement 8 Improvement Reserve 580 000 597 000 615 000 633 000 652 000 672 000 692 000 713 000 734 000 756 000 Total Minimum Reserve Fund Targets 2,164,000 2,107,000 2,256,000 2,331,000 2,410,000 2,491,000 2,575,000 2,662,000 2,751,000 2,844,000 Total Minimum Reserve Funtl Targets Met Y,ES YES YES _ ~E'. YES4_ ` ~ Y_E_5 ~PY,ES~~ ~ YES Debt Service Coverage (Min 1.25 z)' ;.68 2.37 7A1 1.6u , ~.r,-. 3.01 ~ 3.36 3:64 ~ d.ts4 Resolution No. 2007-023 N.C.S. Page 25 Table 2 City of Petaluma -Water Utility Fund Capital Improvement Program 2005/06 2006!07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Total Non-Replacement Capital C501100 New Wells $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 C501200 Property Site Improvements 800,000 - - - - - 800,000 C500105 Reservoir Seismic Upgrades 15,000 - - - - - 15,000 C500101 Paula Lane Reservoir #2 21,000 2,000,000 - - - - 2,021,000 C501004 E. Wash. SL Water Main - - - - - - - 0 Phase 2 Recycled Water - 0 Phase 3 Recycled Water - - - - - 0 Phase 4 Recycled Water ~ 0 Phase 5 Recycled Water 0 Wellhead Treatment - - - - 0 Total 836.000 2,000,000 0 0 0 0 0 0 A 2,836,000 5% GF transfer 40,000 95,000 0 0 0 0 0 0 0 135 000 Enhanced Water Conservation Water Conservation ~ Total ~ - - - - - - - - - - Replacement Capital C501000 Water Main Improvements 528,000 1.000,000 1 500 000 1 500 000 1.500,000 1.500.000 1.500 000 2.000 000 2.000 000 Total 528,000 1,000,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 2,000,000 2,000,000 Total 1,364,000 3,000,000 1,500,000 1,500,000 1.500,000 1,500,000 1,SOU,000 2,000,000 2,000,000 Pay-as-you-go Contribution 1,000,000 500,000 1,000.000 1,000,000 1,000,000 1,000.000 1,000,000 1,500,000 1,500,000 Amount to be Financed 364.000 2.500,000 500.000 500.000 500.000 500.000 500.000 500,000 500.000 2006/2007 Bond' 6,364,000 1 -Band to finance Paula Lane Reservoir and $500,000 per year (or automatic read meters Resolution No. 2007-023 N.C.S. Page 26 Table 3 City of Petaluma -Water Utility Fund Petaluma Water Revenue 2001 Bonds Annual Debt Service November 1 Principal Interest Total 2004 $220,000 $437,753 $657,753 2005 230,000 429,503 659,503 2006 235,000 420,878 655,878 2007 245,000 412,065 657,065 2008 250,000 402,878 652,878 2009 260,000 393,503 653,503 2010 275,000 383,623 658,623 2011 285,000 372,623 657,623 2012 295,000 361,223 656,223 2013 310,000 349,054 659,054 2014 320,000 335,414 655,414 2015 335,000 321,014 656,014 2016 355,000 305,604 660,604 2017 270,000 289,185 559,185 2018 280,000 276,360 556,360 2019 295,000 262,920 557,920 2020 310,000 248,613 558,613 2021 325,000 233,500 558,500 2022 340,000 217,250 557,250 2023 360,000 200,250 560,250 2024 380,000 182,250 562,250 2025 400,000 163,250 563,250 2026 420,000 143,250 563,250 2027 440,000 122,250 562,250 2028 465,000 100,250 565,250 2029 485,000 77,000 562,000 2030 51.5,000 52,750 567,750 2031 540,000 27,000 567,000 Total 9,440,000 7,521,208 16,961,208 Resolution No. 2007-023 N.C.S. Page 27 Table 4 City of Petaluma -Water Utility Fund Estimated Future Annual Debt Service I and II Debt Issue I - 2006/07 25 years Projects $6,364,000 Issuance costs 200,000 Reserve (1 year Debt Service) 485,000 U/W discount and bond insurance at 1.5% 107,848 Contingency/Rounding 33,000 Total Issue Size 7,189,848 Assumed Average Interest Rate" 4.50% Estimated Annual Payment for Reserve Sizing $485,000 Debt Issue II - TBD 25 years Projects $0 Issuance costs 0 Reserve (1 year Debt Service) 0 U/W discount and bond insurance at 1.5% 0 Contingency/Rounding 0 Total Issue Size 0 Assumed Average Interest Rate* 5.00% Estimated Annual Payment for Reserve Sizing $0 *Based on current rates -subject to change Resolution No. 2007-023 N.C.S. Page 28 Table 1 City of Petaluma -Wastewater Utility Fund Wastewater Cash Flow Projections -Ellis Creek Water Recyclir Actual Actual Budget Prajectetl 2004105 2005106 2006/07 200]/08 2008109 2009!10 2010!11 2011!12 2012/13 2013/14 Beginning All Fund Balance' 56,808,070 55,120,000 56,010,000 14,400,000 5'1.910,000 b10,60p,000 510,520,0110 E1 d,22q 000 515,280,000 bt6,P0,000 Average Single Family Resitlenllal Rata Increase' 13.0% 1J.0% 13.0% 13.p% 11.0% 2-OY. 0.0% O.OY. Capacity Fee' 3,329 3609 3,506 3.629 3,756 3.88] 4,023 4.164 4,310 6461 No. of New Connections 210 414 100 100 100 100 100 100 100 100 Revenues Operating Charges for services-Fixed Servce Charges 5,016,800 3,110,613 2,684,000 3,047,000 3,458,000 3,925,000 695],000 4,]98,000 4,868,0110 5.026.000 Charges for services-Wastewater Consumption Charges° 7,525,200 8,978,716 11,950,000 13,550,000 15,365,000 17,425,000 19,]65,000 21260.000 21,550,000 22,238,000 Connection fees ]6],309 1413,000 350,000 360,000 380,000 390000 400,0011 420,000 630,000 450,1X10 Inlergovernmenlallg2nls and other funds 842,302 - - 2,233,000 - - - - - - Investment earnings 79,018 14,500 150,000 110,000 200,000 -2]0,000 260,000 360,000 380,000 610,000 Other 163.000 Subtotal Operating 16,353,629 13,516,829 15.134,000 19,300,000 19,603,000 22,010,000 26,882,000 26,838,000 2],228,000 28,126,000 Capital SRF Trealmem Plant Proceeds - - 50.000,000 25,000,000 25,000,000 25,000,000 964,254 - - - Interim Financing Proceetls/(Atljustment) - 27,192,]39 31,331,950 2 606,000 - - - - - - Projected Debl Proceeds 9,067,000 24,417,000 Subtotal Debt - 27,192,779 81,131,950 36,671,000 25,000,000 25,000,000 25,381,254 - - Total Revenues 14,353,629 40,]p9,568 96,465,9511 55,7]1,000 44,403,000 47,010,000 50,263,254 26,8]8,000 2],228,000 20,124,000 Expenditures Operating° Cost of services 6.050,442 1,095,239 7.516,120 7,]80.000 8,050,000 8,330000 8.620,000 8,920,000 9,230,000 9,550.000 Cost Allocation l2nslers (Inle~governmental Transfers) 946.950 1,218.750 1350,050 1,610,000 1,460,000 1,510,000 1,560.000 1.610.000 1,6]0.000 1,730000 Other 250,000 200,000 Subtotal Operating 6,99],392 8,563,989 9,0]5,170 9,190,000 9,510,000 9,840,000 10,180,000 10,530,000 10,900,000 11,280,000 Capital' Ellis Creek Project COSts 3,310,0011 2].192]39 81,331,950 27404,000 13,158,000 330,000 242,000 - - Non-replacement capital improvement protects 394,000 284,639 2,481.350 9.264,000 368,000 5,625,000 - - - - Rep'acement rapilal improvement projects - - 1,250.000 1,288,000 1,32],000 1,36],01X1 1 408,000 1 657 000 1,508,000 1,561,000 Minor capital outlays 116.750 - - - - - - - - - Bank Line of Credit -Principal payment - - - - 11.842,000 24,6]0,000 2441],000 - Debl Service 10 Series 2000-Existing Debt Service 714,300 ]15.059 114,929 ]18,959 716,706 718.3]4 ]23,694 722,688 726 ]38 ]25 ]38 SRf Wastewater Capital Replacement Fund - - - - - - 689,141 689,141 689,141 689.141 Projected SRF Debl Service, 2.4%. 20 years - - - - - - 4,379,000 - 8,758,000 8.]58.1XX1 8,]58,000 Bank Lines of Credit -Interest - 388,000 2,057,000 2.867.000 2,925,000 2,640,000 1,]64,000 - - - Sedes 200] Debt Service - - - 312,13] 624,000 624,000 624,000 624,000 624,000 624,000 Series 2011 Debt Service 829,000 1,658,000 1,658,000 1,658,000 Subtotal Capital 4,535,000 28,581,000 8],835,000 41,854,000 30,961,000 35,974,000 35,0]6,000 13,909,000 13,962,000 14,016,000 Transler and Adjustments Projects-City Departments-T2rvslers10 1,584,000 646,]00 334,000 350.000 350,000 350,000 350,000 350,000 350,000 350,000 Capital atlmiNOther 1]7.000 1,341,000 - - - - - - - - SudacewaterOBM 746,000 691,4]8 035,050 864,000 894,000 925,000 95I,OOG 990.000 1,025,000 1.Ofi 1,000 Subtotal TranstersflAdjustments 2,50],000 2,6]9,1]6 1,169,050 1,214,000 1,244,000 1,2]5,000 1,307,000 1,340,000 1,7]5,000 1,4t1p00 Total Expenditures 14,039,392 39,824,167 96,0]9,220 52,250,000 41;]15,000 47,069,000 46,567,000 25,1]9,000 26,237.000 26,]0],000 Total Revenue less Total ExpeMilures 314,23] 885,401 (1,613,270) 3,513,000 2.688,000 (]9,000) 3,700,256 1,059,000 991,000 1417,000 Ending Fund Balance 55,122,]0] 56,005,401 56,396,770 1].913,000 510,598,000 110,521,000 514,220,254 115;2]9,000 116,271,000 117.687,000 Reserve Fund Targets ' OHM (60 days) Reserve 1,166,232 1 42],332 1,512,528 1,531,667 1,585,000 1,640,000 1,696.667 1,755,000 1,016.66] 1,080,000 Capital Replacement 8lmprovement Reserve (NOIe) 934.000 962.000 991 000 1 021 000 1.052.000 1.084.000 1 117 000 1.151.000 1.186.000 _ 1 222.000 Total Minimum Reserve FuM Targets 2,1110,232 2,389,332 2,503,528 2,552,667 2,637.1X10 2,724,000 2.813.667 2.906.000 3,002,66] 3,102,000 Total Minimum Reserve Fund Targets Met ~ Yes Yes Ves Yes Yes' Ves Ves Ves Yes Yes Debt Service Coveage (Min 1.25 x) 7.39 3.50 1.85 2.35 2.09 2.80 1.64 1.29 1.29 1.33 Resolution No. 2007-023 N.C.S. Page 29 Table 3 City of Petaluma -Wastewater Utility Fund Petaluma Wastewater Revenue 2000 Bonds Annual Debt Service May 1 Princi al Interest Total 2004 $310,000 $402.,608 $712,608 2005 325,000 389,278 714,278 2006 340,000 375,059 26,616,751 715,059 2007 355,000 359,929 575,988 714,929 2008 .375,000 343,954 718,954 2009 390,000 326,704 716,704 2010 410,000 308,374 27,910 718,374 2011 435,000 288,694 723,694 2012 455,000 267,488 722,488 2013 480,000 244,738 3,110,613 724,738 2014 505,000 220,738 8,978,716 725,738 2015 530,000 194,983 1,413,000 724,983 2016 560,000 167,423 727,423 2017 595,000 138,023 14,500 733,023 2018 625,000 106,488 731,488 2019 650,000 73,050 723,050 2020 690,000 37,950 727;950 Total 8,030,000 4,245,475 12,275,475 Resolution No. 2007-023 N.C.S. Page 30 Table 4 City of Petaluma -Wastewater Utility Fund Estimated Future Annual Debt Service for SRF and Interim Financing for Ellis Creek Water Recycling Facility 2004(05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Ellis Creek Water Recycling Projeci Cost $3,310,000 $27,192,739 $81,331,950 $27,404,000 $13,158,000 $330,000 $242;000 SRF Borrowing 0 0 50,000,000 25,000,000 25,000,000 25,000,000 964,254 SRF Accumulated Borrowing (Prev Yr + Intereston Prev Yrs + Current Yr) 0 0 50,000,000 76,200,000 103,029,000 130,502,000 134,598,254 Estimated Annual Accrued Interest - on Outstanding Balance 0 0 1,200,000 1,829,000 2,473,000 3,132,000 3,230,000 Assumed Average Interest Rate 2.40% 2.40 % 2.40 % 2.40 % 2.40 % 2.40% 2.40 Term (years) Estimated Annual Debi Service- SRF borrowings 2004/05 - 2010/11 with payments beginning 2009/10 WCRF Payments $3,110,613 $8,978,716 Assumed Line of Credit Interest Payment Ei 2004/05 2005/06 1413000 2007/08 2008/09 2009/10 2010/11 Line Used During Year $0 $27,192,739 $31,331,950 $2,404,000 $0 $0 $0 Outstanding Line (Current + prior) 27,192,739 58,524,689 60,928,689 60,928,689 49,086,689 24,416,689 Repayment of Line - - - 111 842 0001 (24.670,000) (24 416.689) Outstanding Balance 0 27,192,739 58,524,689 60,928,689 49,086,689 24,416;689 0 Estimated Annual Interest Payment (4.8 0 388,000 2,057,000 2,867,000 2,925,000 2,640,000 1,764,000 Resolution No. 2007-023 N.C.S. Page 31 ATTACHMENT A ALTERNATIVE 1 A - 1 YEAR PROGRAM WATER & WASTEWATER MODEL RUNS Resolution No. 2007-023 N.C.S. Page 32 Table 7 City of Petaluma - W ater. Utility Fund Cash Flow Projections Actual Estimate Budget Projected 2004/05 2005/06 2DO6I07 2007/08 2008/09 2009/10 2010/17 2011/12. 2012/13 2013114 Beginning Fund Balance $10,729,443 $4,541,726 $2,441,000 $5,456,000 $4,068,000 $2,370,000 $340,000 -$2,047,000 -$4,806,000 -$8,459,000 Rate Stabilization Fond $0 $0 $150,000 $165,000 $180,000 $195,000 $210,000 $225,000 $240,000 $255,000 Revenues Ooerating Charges for sales' 9,174,000 8,551,000 8,559,000 9,384,000 9,430,000 9,478,000 9,525,000 9,573,000 9,620,000 9,668,000 Charges for services° 0 909,000 1,088,000 1,094,000 1,099,000 1,105,000 .7,110;000 1,116,000 1,721,000 1,127,000 Investment earnings' 105,000 100,000 61,000 136,000 102,000 59,000 9,000 -51,000 -120,000 -211,000 Other 881 200 0 200 000 207_000 214 000 221 000 229 000 237 000 245 000 254 000 Subtotal Operating 70,160,200 9,560,000 9,908,000 10,827,000 10,845,000 10,863,000 10,873,000 10,875,000 10,666,000 10,838,000 Caoilal Connection fees 447,603 1,063,319 619,000 638;000 657,000 677,000 697,000 718,000 740,000 762,000 Deb[ proceeds 0 0 6.364.000 0 0 0 0 0 0 0 Subtotal Capital 447,603 1,063,319 6,983,000 638,000 657,000 677,000 697,000 718,000 740,000 762,000 Transfers &Adiustments - Transfer In/(Out) 49 000 0 0 0 0 0 0 0 0 0 Subtotal Transfers & Adjustments 49,000 0 0 0 0 0 0 0 0 0 Total Revenue, Transfers, and Adjustments $70,656,803 $10;623,319 $16,891,000 $11,459,000 $11,502,000 $11,540,000 $11,570,000 $11,593,000 $1',606.000 $11,600,000 Expenditures Operatin0 Cost of sales° 4,800,000 4,332,370 4 484,000 4,641,000 4,803,000 4,971,000 5,145,000 5,325,000 5,511,000 5,704,000 Cosf of services° 3,391,350 3,023,515 3,800,000 3,933,000 4,071,000 4,213,000 4,360,000 4,513,000 4,671,000 4 834,000 Intragovernmental Transfers (General Fund) 1,311.300 1 706 000 1.561.000 1.616 000 1.673.000 1 732 000 1.793,000 1 856.000 1,921.000 1,988.000 Subtotal Operating 9,502,650 9,067,885 9,845,000 10,190,000 10,547,000 70,916,000 11,298,000 11894,000 12,103,000 12,526,000 Caoilal Non-replacement capital improvement projects 3,919,048 836,000 2,000,000 0 0 0 0 0 0 0 Replacement capital improvement projects 1,205,000 528,000 1,000,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 2,000,000 2.000,000 Capital outlays 272,750 0 0 0 0 D 0 0 0 0 Existing Debt Service 657,753 659,503 656,000 657,000 653,000 654,000 659,000 658,000 656,000 - 659,000 Projected Debt Service 1 0 0 0 48_000 485 000 485,_000 485 000 485000 465 000 465 000 Subtotal Capital 5,994,550 2,023,503 3,656,000 2,fi42,000 2,638,000 2,639,000 2,644,000 2,643,000 3,141,000 3,144,000 Transfers 8 Adiustments Projects-City Depanments-Transfers 1,139,214 1,448,587 360,000 0 0 0 0 0 0 0 Capital admin/other/5 % GF overhead 208,106 40,000 0 0 0 0 0 0 0 0 Subtotal Transfers 8 Adjustments 1,347,320 1 488,587 360,000 0 0 0 0 0 0 0 Total Expenditures, Transfers, and Adjustments $16,844,520 $12,573,975 $13,861,000 $12,832,000 $13,185,000 $73,555,000 $13,942,000 $14,337,000 $15,244,000 $15,670,000 Net operating revenue (before debt service) 657,550 498,115 63,000 631,000 298,000 -53,000 425,000 -819,000 -1,237,000 -1,688,000 Net total revenue (6,187,717) (1,950,656) 3,030,000 (1,373,000) (1,683,000) (2,015,000) (2,372,000) (2,744,000) (3,638,000) (4,070,000) Ending Fund Balance 4,541,726 2,591,070 5,471,000 4,083,000 2,385;000 355,000 (2,032,000) (4,791,000) (8,444,000) (12,529,000) Transfer to rate stabilization 0 0 (15,000) (15,000) (15,000) (15,000) (15;000) (15,000) (15,000) (15,000) Reserve Fund Targets O&M (60 days) Reserve 1,584,000 1,510,000 1,641,000 1,698,000 1,758,000 1,819,000 1,883,000 1,949,000 2,017,000 2,088,000 Capital Replacement 8 Improvement Reserve 580 000 597 000 615`000 633 000 652 000 672 000 692 000 713>y0O 734 000 756 000 Total Minimum Reserve Fund Targets 2,764,000 2,107,000 2,256,000 2,337,000 2,410,000 2,491,000 2,575,000 2,662,000 2,751,000 2,844,000 Total Minimum Reserve Fund Targets Met S} ES , E: ~ 'E E£ ~ _ - - f~ ~ , Y Debt Service Coverage (Min 1.25 x)' ~ i.tia 2 37 1.27 1_.S ~ 1~2 _ ~ 7~Y cj~ _ t ~1 _ u~.. _ _ _ i~59) Resolution No. 2007-023 N.C.S. Page 33 Table 2 City of Petaluma -Water Utility Fund Capital Improvement Program 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011112 2012/13 2013/14 Total Non-Replacement Capital C507100 New Wells $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 - C507200 Property Site Improvements 800,000 - - - - - 800,000 C500105 Reservoir Seismic Upgrades 15,000 - - - - - 15,000 C500107 Paula Lane Reservoir #2 21,000 2.000,000 - - - - 2,021,000 C501004 E. Wash. SL Water Main - - - - - - 0 Phase 2 Recycled Water - 0 Phase 3 Recycled Water - - - - - 0 Phase 4 Recycled Water 0 Phase 5 Recycled Water 0 Wellhead Treatment 0 Total 836,000 2,000,000 0 0 0 0 0 0 0 2,836,000 5% GF transfer 40,000 95,000 0 0 0 0 0 0 0 135,000 Enhanced Water Conservation Water Conservation Total ~ - - - - - - - Replacement Capital C501000 Water Main Improvements 528.000 1.000.000 1.500 000 1,500.000 1.500,000 1.500.000 1.500.000 2,000.000 2,000,000 Total 528,000 1,000,000 1,500,000 1,500,000 1,500.000 1,500,000 1,500,000 2,000,000 2,000,000 Total 1,364,000 3,000,000 7,500,000 1,500,000 1,500,000 1,500,000 1,500,000 2,000,000 2,000,000 Pay-as-you-go Contribution 1,000,000 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,500,000 1,500,000 Amount to be Financed 364,000' 2,500.000 500.000 500,000 500.000 500,000 500.000 500,000 500.000 2006/2007 Bond' 6,364,000 1 -Bond to finance Paula Lane Reservoir and $500,000 per year far automatic read meters 1 Resolution No. 2007-023 N.C.S. Page 34 Table 3 City of Petaluma -Water Utility Fund Petaluma Water Revenue 2001 Bonds Annual Debt Service November 1 Principal Interest Total 2004 $220,000 $437,753 $657,753 2005 230,00.0 429,503 659,503 2006 235,000 420,878 655,878 2007 245,000 412,065 657,065 2008 250,000 402,878 652,878 2009 260.,000 393;503 653,503 2010 275,000 383,623 658,623 2011 285,000 372,623 657,623 2012 295,000 361,223 656,223 2013 310,000 349,054 659,054 2014 320,000 335,414 655,414 2015 335,000 321,014 656,014 2016 355,000 305,604 660,604 2017 270,000 289,185 559,185 2018 280,000 276,360 556,360 2019 295,000 262,920 557,920 2020 310,000 248,613 558,613 2021 325,000 233,500 558,500 2022 340,000 217,250 557,250 2023 360,000 200,250 560,250 2024 380,000 182,250 562,250 2025 400,000 163,250 563,250 2026 420,000 143,250 563,250 2027 440,000 122,250 562,250 2028 465,000 100,250 565,250 2029 485,000 77,000 562,000 2030 515,000 52,750 567,750 2031 540,000 27,000 567,000 Total 9,440,000 7,521,208 16,961,208 Resolution No. 2007-023 N.C.S. Page 35 Table 4 City of Petaluma -Water Utility Fund Estimated Future Annual Debt Service I and II Debt Issue I - 2006/07 25 years Projects $6,364,000 Issuance costs 200,000 Reserve (1 year Debt Service) 485,000 U/W discount and bond insurance at 1.5% 107,848 Contingency/Rounding 33,000 Total Issue Size 7,189,848 Assumed Average interest Rate 4.50% Estimated Annual Payment for Reserve Sizing $485,000 Debt Issue II - TBD 25 years Projects $0 Issuance costs 0 Reserve (1 year Debt Service) 0 U/W discount and bond insurance at 1.5% 0 Contingency/Rounding 0 Total Issue Size 0 Assumed Average Interest Rate* 5.00% Estimated Annual Payment for Reserve Sizing $0 Resolution No. 2007-023 N.C.S. Page 36 Table 1 City of Petaluma - Wastewater Utility Fund W aslewater Gash Flow Projections -Ellis Greek Water Recyclir Actual Actual Budget Protected zgo4ros xo6sros 2oo6'w zomrDe zoDaros zoosno zDtDnt zonnz xD1v13 zDl3rla Beginning All Fund Balance' 54,808,070 55,130,000 56,010,000 56,250,000 56,750,000 56,220,000 5]80,000 -56,670,000 -516,170,000 -526,100,000 Average Single Family Residential Rate Increaser 13.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Capacity Fees 3,329 3,409 3,506 3,629 3 756 3,007 4,023 4.164 4 310 4,461 No. of New Connections' 210 dtd 100 100 100 100 100 100 100 100 Revenues Operating Charges for services- Fixed Service Chargesa 5.01Q800 3,110.613 2,657,000 2.859.000 2,872,000 2,885,000 2,899,000 2,912,000 2,92fi,000 2 949,000 Charges for seMces-Wastewater Consumpllon Char9ess 7,525,200 0,9]8,]16 11830,000 12,!21.000 12,766,800 12,811.000 12,861.000 12,906.800 12,951,000 13,045,000 Connection fees 74];309 1 413,000 350,000 360,000 380,000 390.000 400,000 420.000 430.000 450,000 Inlergovemmentallgrants and other lands 842,302 - - ?233,000 ~ - - - - Inveslmenfeamings' 79,018 14,500 150,000 110,000 1]0,000 160,000 10,000 - - - Olher 143.000 - _ - - Subtotal Operating 14,353,629 1],616,019 14,90],000 18,283,000 16,168,800 16,246,000 16,1]0,000 1fi;2J8,B00 16,30],000 16,444,000 Capital SRF Freatment Plant Proceeds - - 50.000,000 25.000.000 25,000 000 25,000,000 964,254 - - - ImerimFinancinq~roseeds/iAdjuslmenl) - 2],192,739 31,331,950 2404,000 - - - - - PrejecteoDeblPmceeds - 9,067,000 _ _ 2441],000 - - Subtotal Debt - 2],192,739 81,331,950 76,671,000 35,000,000 25,000,000 25,381,254 - - - Total Revenues 14,353,629 40,709,568 96,318,950 54,754,000 41,188,800 41,246,000 61,55'.,254 16,2]0,000 16,]07,000 16,441.000 Expenditures Operatng° Cost o~services 6.050,442 7095,239 7,516,120 7,780,000 8,050,000 8,3311,000 8.620.000 8;920,000 9,230.000 3,550.000 Cost Allocation Iranxfers (Inlergovemmenlal Transfers) 946,950 1,218,750 1,359,050 1 410,000 1 460,000 1,510,000 1,560,000 1.610,000 1,8]0.000 1,730,000 O1hel 250,000 200,000 _ - - Subtotal Operating 6,997,392 8,563,989 9,075,170 9,190,000 9,510,000 9,841),000 10,580,000 10,5]0,000 10,900,000 11,280,000 Ca P0a1' Ellis Creek Project Costs 3.310.000 27,192,739 81,331,950 27,404,000 13,158,000 330,000 242.000 - - Ncn-replacement capital improvement projects 394,000 284.839 ? 401 ]50 9,264,000 360,000 5,625.000 - - - - Replacement capital improvement protects - - 1,250,000 1,288,000 1,327,000 1,367.000 1pOB.ODO 1457,000 1.508,000 1.561,000 Minor capital outlays 116,750 - - - - Bank Line of Cretlll-Principal payment - - - - 11,842,000 24,670.000 24,917,000 - Debl Service 10 Series 2000-Existing Debl Service ]14,300 715,059 714,929 718.954 ]16;]04 ]18,374 723,694 722,488 ]24]38 ]25,]38 SRF Waslewalel Capital Replacement Funtl - - - - - - 689,141 689.141 689,161 689,141 Protected SRF Debl Service, 2.4%, 20 years - - - - ~ - 4,379,000 0.758,000 8,]50,000 8,750,000 Rank Lines of Credit- Interest - 388,000 2.057,000 2,8fi7,000 2,925,000 2,640.000 -1,764.000 - - - Se,ies20070ebl8ervire - - - 312,137 624,000 624,000 624,Cg0 fi24,000 624,000 624.000 Series 2011 Dehl Service _ _ _ 829,000 1,658.000 _ 1,658,000 _i,65B.000 Subtotal Capital 4,535,000 28,581,000 8],035,000 41,854,000 ]0,961,000 35,9]4,000 35,0]6,000 17,909,000 17,962,000 14,016,000 Transfer and Adjustments Projects-Giiy Departments T.ansfersr0 1,584,000 646,700 334,000 350,000 350,000 350,1100 3500(10 350.000 350,000 350AU0 Capital admin/other 177,000 1,341,000 - ~ ~ - - - - Sudacewaler08M 746,000 691,478 _835_050 864,000 89M1,D00 925,000 _957000 990.000 _ 1,025,000 _ 1,061_000 Subtotal Transfers 8 Adjustments 2,50],000 3,679,178 1,169,050 1,214,0011 1,246,000 1,275,000 1,307,000 !,340,000 1,375,000 1,411,000 Total Expenditures 14,039,392 39,824,16] 90,0]9,220 5? 258,000 61,]15,000 4],089,000 46,563,000 25,7>9,000 26,337,000 26,707,000 Total Revenue. less Tptai ExperM0ure5 315,237 885,x01 (1,]60.270) 2.496,000 1526,200) (5.843.900) (5.011,746) (9,540.2W) (8,930,000) (10,263,000) Ending Fund Balance 55,122,707 55,005,401 54,249,770 56,766,000 56,223,000 5377,000 -54,671,746 -514,1]0,200 -526,100,000 -534,363,000 Reserve Fund Taruels O8M (600ays)Reserve 1,166,232 1A2I,332 1,512,528 1.531,66] 1,505,000 16x0,000 1,696,667 1;755,000 1,816,66] 1,880.000 Capital Replacemen181mprovenent Reserve (NOIe) 936.000 962000 991.000 1021_49.4 1.052000 _ 1.084.000 _ 1.111000 1.151.000 1.186.000 1222QQQ Total Minimum Reserve FuM Ta 1s 2,100,232 2,389.332 2.503,528 2.552,66] 2,63];000 2,]24,000 2,8156] 2,906,n00 3,nnx fib] 3102000 rge _ _ _ _ _ Total Min mum Reserve FuM targets Mel Ves Yes Yes Yes Ves :0-u, Debt Service Coverage (Min 1.25 7.39 3.50 1'.80 2.09 1.33 1.3 ~ ~ _ ~ ~ - _ _ - s Resolution No. 2007-023 N.C.S. Page 37 Table 2 City of Petaluma -Wastewater Utility Fund Wastewater Capital Improvement Program (1) 2004/05 2005!06 2006107 2007108 2008/09 2009/10 2010111 Total Non-Replacement Capital C500402 Water Recycling Facility -Treatment Plant $3,310,000 $26,616,751 $80,334,450 $26,555,000 $12,738,000 $330,000 $242,000 $150,126,201 CSOOAAA SCADA for Ellis Creek WRF ~ ~ 575,988 997,500 849,000 420.000 - - 2,642,488 CSOOEEE Pump Station SCADA - - - - - C501400 Wilmington Pump Station - - - 197,000 - - - 197,000 C500205 C Street Pump Station Upgrade 394,000 27,910 773,000 1.327,000 - - - 2,521,910 C500302 Recycled Water Pipeline - - - - - - - - C500505 Phase II Recycled Water Improvements - - 1,708,350 7,740,000 - - - 9,448,350 C500BB6 LakevilleHighway Improvements - - - - - 0 C500405 Oxidation Pond Dike Repair - 256,929 - - - - - 256,929 C500305 Demolition of Hopper WWTF - - - - 368.000 5,625,000 - 5;993,000 C501104 Biosolids Mgmt Program - - - - - - - C500403 River Access Improvements - - - - - - - - C500605 Petaluma Marsh Soil Remedialion - - - - - Tolal $3,704,000 $27,478,000 $83,873,000 $36,668,000 $13,526,000 $5,955.000 $242,000 $171,386,000 Admin and other 177,000 1,308,000 3,991,000 1,747,000 645,000 284,000 12,000 8,764,000 Total non-replacement ClP less admin/other 3,527,000 26,770,000 79,822,000 34,921,000 12,861,000 5,671,000 230.000 163,222,000 Replacement Capital 8221-54151 Sewer Main Repairs - - 1,000,000 1,030,000 7,061,000 7,093,000 1,126,000 5.310.000 CSOODDD 2nd SL Trunk Sewer Replace - - - - - - - 8221-54110 Integrated Collection System - 250,000 258,000 266,000 274,000 282,000 7,330,000 Total - - 1,250,000 1,288,000 1,327000 1,367,000 1,408,000 6,640.000 Total Ellis Creek Project Costs 3,310,000 27,192,739 81,331,950 27,404,000 13,158,000 330,000 242;000 152,968,689 Total Non-Ellis Creek Project Costs 394,000 284,839 2,481,350 9,264,000 368,000 5,625,000 0 18,417,189 Total replacemenfcapital 0 0 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 6,640,000 Total CIP 3,704,000 27,478,000 65,063,000 37,956,000 14,853,000 7,322,000 1,650,000 178,026,000 (1) Certain projects receive grant funding which isshown on Table 2 as intergovernmental revenues. (2) line of credit borrowing will be used based on an approval for retroactive funding from the SRF Resolution No. 2007-023 N.C.S. Page 38 Table 3 City of Petaluma -Wastewater Utility Fund Petaluma Wastewater Revenue 2000 Bonds Annual Debt Service May 1 Principal Interest Total 2004 $310,000 $402,608 $712,608 2005 325,000 389,278 714,278 2006 340,000 375,059 26,616,751 715,059 2007 355,000 359,929 575,988 714,929 2008 375,000 343,954 718,954 2009 390,000 326,704 716,704 2010 410,000 308,374 27,910 718,374 2011 435,000 288,694 723,694 2012 455,000 267,488 722,488 2013 480,000 244,738 3,110,613 724,738. 2014 505,000 220,738 8,978,716 725,738 2015 530,000 194,983 1;413,000 724,983 2016 560,000 167,423 727,423 2017 595,000 138,023 14,500 733,023 2018 625,000 106,488 731,488 2019 650,000 73,050 723,050 2020 690,000 37,950 727,950 Total 8,030,000 4,245,475 12,275,475 Resolution No. 2007-023 N.C.S. Page 39 Table 4 City of Petaluma -Wastewater Utility Fund Estimated Future Annual Debt Service for SRF and Interim Financing for Ellis Creek Water Recycling Facility 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Ellis Creek Water Recycling Project Cost $3,310,000 $27,192,739 $81,331,950 $27,404,000 $13,158,000 $330,000 $242,000 SRF Borrowing 0 0 50,000,000 25,000,000 25,000,000 25,000,000 964,254 SRF Accumulated Borrowing (Prev Yr + Vnterest on Prev Yrs + CurrentYr) 0 0 50,000,000 76,200,000 103,029,000 130,502,000 134,598,254 Estimated Annual Accrued Interest - on Outstanding Balance 0 0 1,200,000 1,829,000 2,473,000 3,132,000 3,230,000 Assumed Average Interest Rate 2.40 % 2.40 % 2.40:/ 2.40 % 2.40 % 2.40 % 2.40 Term (years) Estimated Annual Debt Service- SRF borrowings 2004/05 - 2010/11 with payments beginning 2009/10 WCRF Payments $3,110,613 $8,978,716 Assumed Line of Credit Interest Pa ment E: 2004/05 2005/06 1413000 2007/08 2008/09 2009/10 2010/11 Line Used During Year $0 $27,192,739 $31,331,950 $2,404,000 $0 $0 $0 Outstanding Line (Current + Prior) 27,192,739 58,524,689 60,928,689 60,928,689 49,086,689 24,416,689 Repayment of Line - - - - ~1 b 842 000) (24 670 000) (24 41.6 689) Outstanding Balance 0 27,192,739 58,524,689 60,928,689 49,086,689 24,416,689 G Estimated AnnuallnterestPayment(4.8°/) 0 388,000 2,057,000 2,867,000 .2,925,000 2,640,000 1,764,000 Resolution No. 2007-023 N.C.S. Page 40