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11=1)1 4. Detailed Proposal <br /> City of Pleasanton I Water and Wastewater Rate Study <br /> The starting point for projecting capital expenditures will be the City's water and wastewater <br /> Capital Improvement Programs. In the financial planning process, consideration must be given <br /> to maximizing the capital improvement expenditures, while minimizing rates to the utility's <br /> customers. The basic framework used to analyze capital improvement funding is shown in Figure <br /> 4-2. <br /> GZEDaCa,Overview Ginn Methodology GT Developing(jita Capital Project Expenses <br /> + Total Capital Projects (From Capital Improvement Program) - <br /> ✓ Renewal and Replacement Capital Projects <br /> ✓ Legally Mandated Capital Projects <br /> ✓ System Growth and Expansion Capital Projects <br /> - Outside Funding Sources - <br /> ✓ Capital Reserves <br /> ✓ Grants <br /> ✓ Low-Interest Loans (State and/or Federal) <br /> ✓ Capacity Fees/Contributed Capital <br /> ✓ Borrowed Funds/Lon Term Debt (e.g. Revenue Bond) <br /> = Capital Projects Financed with Rate Revenues(z Depreciation Expenses) <br /> The capital improvement analysis is developed on a year-by-year basis. The capital projects are <br /> listed by year with the estimated (planned) outside funding sources for each project. The <br /> balance of projects, not funded by the available sources of funds, must be financed from a <br /> combination of long-term debt and rates. It is the balancing of the use of long-term debt to the <br /> impact upon rates that is critical to the analysis. HDR recommends, at a minimum, a funding <br /> level that is greater than or equal to annual depreciation expense. The funding of future <br /> replacement projects was key to the past wastewater rate study completed by HDR. At the time. <br /> the City had an asset management (replacement) model that was incorporated into the overall <br /> capital funding plan. If available, HDR will work with similar information to develop the water and <br /> wastewater capital funding analyses. <br /> HDR rate models clearly display <br /> Operations&Maintenance the costs and rate impacts of <br /> $10.000 Change InWorldng various operating and capital <br /> V3400 ' Wain Service components. <br /> sa.0oo <br /> r •Taxes and Transfers <br /> 17.000 - - <br /> 56.000 _ — ^+ a CW Funded Through <br /> Rates <br /> $5.000 — •u1ry anOng <br /> R <br /> ;'f4.000 •Water Distribution <br /> 0 <br /> :n000 'Water Treatment <br /> 52000 •Adminlsnative <br /> 51.000 <br /> $0 J <br /> 2009 2010 2011 2012 2013 1014 2015 2016 2017 2010 2019 2020 <br /> 4-6 15007 <br />