RES 2024025 - Laserfiche WebLink

38 Additional Information Regarding Projections. The table above reflects a number of assumptions regarding projected debt service coverage for Fiscal Years 2022-23 through 2025- 26, including the following: • There is a 2.5% growth in customers during the projection period coming out of a drought. • Rate increases during the projection period consistent with the previously adopted rate study, which provides for increases of approximately 32.5% for calendar year 2024 and 11.5% for calendar year 2025. • Purchased Water expenses are projected by the City to increase by up to 6% per year; actual costs charged by Zone 7 may vary significantly from this estimate. Other expenses, consisting of personnel services and services & supplies, are projected to increase at between 3% to 5% per year. • A borrowing of $6 million was estimated for the near-term infrastructure improvements during the projection period. With respect to capital costs associated with the Water System, the City’s current CIP identifies several projects for planning purposes. All future years’ projects and their related funding require annual review and approval by the City Council and are therefore subject to change. The City records its infrastructure capital costs, including Water System capital costs as capital assets. Because capital costs are not included in the definition of Maintenance and Operation Costs, they will not affect the availability of Net Revenues to make the Installments Payments. Should the City decide to finance any of these capital costs through the issuance of Parity Debt within the projection period, projected debt service coverage could decrease without a corresponding increase in either rates or customers.