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FUTURE FUND CASH FLOW PROJECTIONS The FAA requires the DSRSD to maintain reserves in the Fund equal to a minimum of two times maximum annual debt service (Bond Target Level (2X)) and a maximum of five times maximum annual debt service (Administrative Target Level (5X)) as long as the Bonds are outstanding in order to protect rate payers from having to pay the debt service on the Bonds. The annual debt service on the Bonds is $7.6M through 2020 when the District bonds are paid off and then $5.6M thereafter until 2032 when the LAVWMA bonds are paid in full. As a result of the significant downturn in the economy, the volume of connection fees received from new development has decreased significantly since July 2008. The regional connection fees are used to fund the DSRSD CIP and to pay debt service on the Bonds. Attachment 2 herein presents the cash flow projections for the Fund for the ten year period ending June 30, 2020. The Committee is very concerned about the ability of the Fund to pay debt service on the Bonds over the next two years as a result of the minimum amount of connection fees projected to be received and available for the payment of debt service. Staff and the Committee will continue to monitor the cash flow projections very closely and keep the Council and the community informed about the status of these funds. Subrrf. o.• .y. Fiscal Review: Approved by: Zit -) e kiLA/ Daniel S ith Emily E. Wagner Nelson Fialho Director of Operations Director of Finance City Manager Service Center Attachment 1. Second Amendment to Financing Administration Agreement, with track changes 2. Cash flow Projections for the DSRSD Regional Expansion /Rate Stabilization Fund Page 3 of 3