2008 Water Rate and Fee Study - Lake Havasu City

Section 4Financial Planrevenues, a variety of miscellaneous charges and fees, interest income and water resourcedevelopment fee assessed to customers outside the IDD. Pages A – 1 through A – 5summarize the Water Fund financial plan.4.1.1.1. Water Charge RevenuesRed Oak projected existing rate revenues based on historical usage patterns and thecurrent water rate structure. These projections are adjusted based on customer growth aswell anticipated conservation and developed in a variety of worksheets included inAppendix A. Table 4-1 summarized projected increases to water rate revenues requiredas previously discussed. In section 6 of this report, a proposed water rate structure issummarized. The proposed structure is projected to generate the same amount of waterrate revenue required for FY 2009-10.4.1.1.2. IDD Property Tax RevenuesThe second primary revenue stream is the IDD property assessed per ½ acre. Table 4-2summarized the phased increases per acre.4.1.1.3. Development FeesThe Water Fund has an existing water resource development fee assessed to newdevelopment outside the IDD. This revenue stream is not sufficient to fully fund growthrelatedcapital cost requirements. A combination of debt and transfers from theoperations fund are required to fund the anticipated growth-related capital above theamount funded by projected development fee revenues.4.1.1.4. Miscellaneous Charges and Other RevenuesThe Water Fund has a variety of miscellaneous fee and charge revenues. The financialplan incorporates these revenues based on the FY 2008-09 budgeted revenues increasedby 1% per year throughout the study period.4.1.2. O&MPage A - 7 summarizes projected water utility O&M expenditures over the eleven yearstudy period. Projected O&M expenditures are based on the preliminary FY 2009-10budget and adjusted for anticipated inflation. O&M expenses include not only the directcosts associated with the water system, but also an allocation of City administration costs.In addition to inflation for current O&M costs, as the system grows and new facilities areconstructed, additional O&M costs will be required. Red Oak worked with City staff toproject the amount and timing and additional employees.4.1.3. CIPWater system capital improvement projects (CIP) are based on City staff provided lineitemCIP projections in current year dollars and summarized in page A – 13. Thedetailed project listing includes the dollar amount and timing over the eleven year studyLake Havasu City2008 Water Rate and Fee Study49440144-3