Primary Drivers of Required Rate Increases
Major Cost Drivers are associated with expenditures on required Capital Projects
¢ Current and future required capital project investments are substantially increasing
annual debt service costs:
¢ Annual Debt Service is projected to increase from $5.1 million in FY2020 to $8.4 million in FY2025 (10%
average annual increase)
¢ Annual Operation and Maintenance expenditures are projected to increase at a modest rate of 3 percent
per annum during same period
¢ Rate Increases are the only stable source of revenue available for cover the growing
debt service costs:
¢ Almost all projected revenue is generated by User Fees
— In FY 2020, 94% of Wastewater Revenues were derived from retail user fees
— Asmall amount of Wastewater revenue are collected through Sewer Permit fees
Hazen 7
