Laserfiche WebLink
Financial Plan <br /> The financial plan includes several components such as inflation impacts that increase <br /> operating costs, revenues to maintain a solid financial position, and capital projects and <br /> associated debt service for the next three years. Operations and maintenance costs are <br /> proposed to increase due to inflation factors — see Table 1 below — and rising insurance <br /> premiums. As shown in Table 2 below, financial drivers are based on the funding <br /> necessary to operate, repair and maintain the water system, including replenishing the <br /> reserve balances, and to implement critical near-term system infrastructure <br /> improvements ($4.7 million in Fiscal Year 2023/24 and Fiscal Year 2024/2025, and $6.7 <br /> million in Fiscal Year 2025/26). Specifically, this includes two staff positions to support <br /> meter system operations and maintenance activities and one engineering position to <br /> design and implement identified water projects. Notably, despite significant community <br /> growth and increasing maintenance needs, staffing to support the enterprise continues <br /> to be at a minimal level. Another significant driver for the proposed rate increase is <br /> funding to continue to purchase 100 percent of the City's water from Zone 7 until <br /> construction is completed for the selected Water Supply Alternatives project (as shown <br /> on the first line in Table 2). <br /> Table 1 <br /> Expense Inflation <br /> Factors <br /> General 5% 5% 5% <br /> Salaries 3% 3% 3% <br /> Health Benefits 7.8% 10% 6% <br /> Other Benefits 3% 3% 3% <br /> Purchased Water 6% 6% 6% <br /> Electricity 5% 5% 4% <br /> Capital 12.5% 12.5% 10% <br /> Table 2 <br /> Purchased Water $23,800,021 $25,417,735 $25,150,627 <br /> Water Supply Alternatives $2,000,000 $2,250,000 $2,475,000 <br /> City O&M $11,605,056 $12,155,062 $12,692,975 <br /> CIP and Debt $4,806,384 $5,076,384 $6,998,244 <br /> Reserve Funding $0 $0 $0 <br /> Total $42,211,461 $44,899,180 $47,316,846 <br /> The City's Reserve Policy target is 35 percent of annual operations and maintenance <br /> and five-year average cash-funded CIP. The proposed water rates over the next three <br /> years meet the Reserve Policy target in FY 2026 as shown in Figure 3. <br /> Page 8 of 19 <br />