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City of Pleasanton <br />2025 Water Rate Study <br /> <br />Water Resources Economics <br />37 <br />Figure 2-1 shows the comparison of revenues and the revenue requirement for the status quo scenario. <br />The stacked bars represent the revenue requirements, or costs: light blue for O&M expenses, green for <br />debt service, and dark blue for rate funded CIP. The City will not be adding to its reserves (grey bars) in <br />this scenario. The current revenue, shown as a solid line, is lower than the revenue requirements, <br />meaning that revenues are insufficient to fund necessary costs. The operating deficit (red circles) starting <br />in FY 2027 indicates where the O&M expenses and existing debt service annual payments are greater <br />than current revenues. <br /> <br />Figure 2-1: Potable and Recycled Revenue Requirements vs. Revenues (Status Quo Financial Plan) <br /> <br />Figure 2-2 shows the debt coverage projections in the status quo financial plan. The required debt <br />coverage (dashed black line) is equal to 125%. The City is expected to fail to meet its debt coverage <br />requirements starting in FY 2027, indicated by the alert coverage (red circles). <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />