City of Cocoa FY 2010 Utility Rate Study. Final Report. Water, Sewer & Reclaimed Water Rates, Fees & Charges Study. Prepared by:

Transcription

1 p FY 2010 Utility Rate Study Water, Sewer & Reclaimed Water Rates, Fees & Charges Study June 29, 2010 Prepared by:

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3 June 29, 2010 W.E. Mack Finance Director 65 Stone Street Cocoa, FL Re: FY 2010 Utility Rate Study Dear Mr. Mack: Burton & Associates is pleased to present this of the FY 2010 Utility Rate Study that we have performed for the City s Water and Sewer Enterprise Fund. We appreciate the fine assistance provided by you and all of the members of City staff who participated in the analysis. If you have any questions, please do not hesitate to call me at (904) Sincerely, Andrew J. Burnham Senior Vice President Enclosure 200 Business Park Circle, Suite 101 St. Augustine, Florida Phone (904) Fax (904) aburnham@burtonandassociates.com

4 TABLE OF CONTENTS TABLE OF CONTENTS SECTION 1. INTRODUCTION BACKGROUND OBJECTIVES... 2 SECTION 2. REVENUE SUFFICIENCY ANALYSIS DESCRIPTION ASSUMPTIONS Cost Escalation Growth Price Elasticity Capital Projects Funding Borrowing Assumptions Debt Service and Coverage Minimum Operating Reserve RESULTS CONCLUSIONS & RECOMMENDATIONS SECTION 3. FY 2010 RATE DESIGN ANALYSIS BASIS OF PROPOSED RATE STRUCTURE WATER RATES Water Fixed Monthly Charges Water Usage Rates SEWER RATES & RECLAIMED WATER RATES PRICE ELASTICITY SCHEDULE OF RECOMMENDED RATES CUSTOMER IMPACT ANALYSIS RATE SURVEY RESULTS SECTION 4. IMPACT FEE ANALYSIS BACKGROUND DESCRIPTION ANALYSIS RESULTS SECTION 5. MISCELLANEOUS SERVICE CHARGES DESCRIPTION i

5 TABLE OF CONTENTS SECTION 6. COUNCIL ACTION REVENUE SUFFICIENCY ANALYSIS RATE DESIGN ANALYSIS IMPACT FEE ANALYSIS MISCELLANEOUS SERVICE CHARGES APPENDIX A SUPPORTING FINANCIAL SCHEDULES FOR THE RSA OPTION # APPENDIX B RATE DESIGN ANALYSIS APPENDIX C IMPACT FEE ANALYSIS APPENDIX D SUPPORTING FINANCIAL SCHEDULES COUNCIL ACTION ii

6 INTRODUCTION SECTION 1. INTRODUCTION Burton & Associates has conducted a comprehensive Water & Sewer Utility Rate Study (Study) for the Water & Sewer Systems (Utility). This report describes in detail the assumptions, procedures, results, as well as the conclusions and recommendations of the Study. 1.1 BACKGROUND The Utility s water system services approximately 90,000 equivalent residential units throughout the as well as additional incorporated and unincorporated areas of Brevard County; while, the Utility s sewer system services approximately 9,000 equivalent residential units throughout the and some adjoining unincorporated areas of Brevard County. Currently, the Utility is facing significant financial challenges. The current economic environment has contributed to reduced water and sewer demands/sales as well as reduced nearterm growth in new service connections. Both of these impacts are negatively affecting the revenues currently and projected to be collected by the Utility. The Utility is also experiencing, in conjunction with declining sales, significant increases in major operating expenses, such as life and health insurance premiums, electric utility service, and other critical operating supplies (i.e., fuel and chemicals). In addition, the Utility s Consulting Engineer, CH2MHill, recently completed a Fixed Asset Inventory and Condition Evaluation Study that identified about $10 million per year for the next 20 years is required for the renewal and replacement of the Utility s aging infrastructure. 1

7 INTRODUCTION The combination of declining sales and increasing cost requirements has resulted in operating expenditures that are in excess of current revenues 1. This cash flow shortfall has and will continue to erode the Utility s operating reserves if not addressed. In light of these circumstances and other considerations, certain customers and the City s Utility Advisory Board (UAB) requested that the retain the services of an outside firm to conduct a comprehensive rate study that would 1) evaluate the adequacy of the revenue provided by the Utility s current rates and charges to meet its financial requirements over a fiveyear planning period and tenyear projection period and 2) review the Utility s current monthly rate structure and develop potential modifications based upon legal precedent, conformance to accepted industry practice, equitable distribution of costs, promoting resource conservation, and customer impact objectives. After reviewing proposals from qualified firms, the City selected Burton & Associates to perform such a study, the results of which are presented herein. 1.2 OBJECTIVES Perform a Revenue Sufficiency Analysis To ensure that the Utility s water, sewer, and reclaimed water rates are providing adequate revenues over a multiyear projection period to meet its financial requirements, including 1) operations and maintenance costs, 2) capital improvement program costs (including renewal and replacement requirements), 3) existing and new debt service expenses and corresponding net income to debt service coverage ratios, and 4) adequate operating reserves. Evaluate the Current Rate Structure To develop modifications, as appropriate, to ensure that the Utility s monthly rates conform to accepted industry practice, legal precedent, and cost allocation principles while providing a price incentive to encourage water conservation and minimizing the financial burden to low volume users. 1 The FY 2010 operating expenditure shortfall is estimated to be greater than $3 million. 2

8 INTRODUCTION Conduct a Residential Rate Survey That compares the Utility s current and recommended FY 2010 monthly water and sewer bill for its residential users to those of other utility systems in Brevard County. Conduct an Impact Fee Analysis To determine the level of water and sewer impact fees that would recover the full unitcost of expansionrelated facilities from new service connections. Assist in the Update of Miscellaneous Service Charges By providing cost computation templates to City staff (and reviewing the results) that calculate the cost of providing certain miscellaneous services to individual customers (such as service turnon, reconnections, meter tests, etc.). 3

9 REVENUE SUFFICIENCY ANALYSIS SECTION 2. REVENUE SUFFICIENCY ANALYSIS As part of the Study, Burton & Associates performed a Revenue Sufficiency Analysis (RSA) for the Utility that identifies the level of annual water, sewer, and reclaimed water revenue (and rate adjustments) required over a nearterm planning period (FY 2011 FY 2015) and longterm projection period (FY 2011 FY 2020) to meet all of the Utility s financial requirements. The following subsections present the procedures, assumptions, results, as well as the conclusions and recommendations of the RSA. 2.1 DESCRIPTION The RSA was performed using both historical and projected information. The historical financial information as provided by staff was used to establish the beginning FY 2010 balances for each of the various funds for this system. It is important to note that funds reserved or encumbered for specific capital projects were included in the beginning fund balances available for capital projects in FY 2010 and the associated capital project costs were included in the capital improvement plan in FY The revenue utilized in the RSA consists of retail rate revenue, interest earnings, impact fee revenue, and other minor revenue from miscellaneous service charges. Future rate revenue is based upon estimated FY 2010 results (which reflect FY 2009 actual revenues adjusted for applicable rate adjustments and estimated reductions in demands/sales), adjusted annually to reflect additional revenue from assumed rate increases and customer growth. All other nonrate revenues were based upon the FY 2010 Budget, excluding water and sewer impact fee revenue (which was calculated annually based upon the projected number of new connections) and interest earnings (which were calculated annually based upon projected average fund balances and assumed interest rates). The FY 2010 revenue requirements are based upon the FY 2010 Budget and include all operating and maintenance expenses, debt service requirements, interfund transfers, and minor capital outlay requirements. After FY 2010, expenditures were projected based upon assumed cost escalation factors for individual expense categories and reflect 4

10 REVENUE SUFFICIENCY ANALYSIS assumed spending execution levels 2. The capital improvement program costs utilized in the analysis were provided by City staff and are presented in projectlevel detail by year in Appendix A (with the exception of the annual renewal and replacement funding requirements from the CH2MHill analysis which is reflected in aggregate). 2.2 ASSUMPTIONS The following presents the assumptions, base data, and parameters utilized in the RSA: Cost Escalation Annual cost escalation factors for the various types of operating and maintenance (O&M) expenses were discussed with City staff and applied in each year of the projection period beginning in FY For example, the annual escalation rate for the General Fund Allocation was assumed to increase at a rate of 3.50% per year 3. The specific escalation factors assumed for each category of expense can be seen on Schedule 1 of Appendix A Growth New connection and water/sewer sales growth projections were based upon a review of multiple years of historical data and discussions with City staff with regards to the current number of new service connections to the Utility. We have assumed in FY 2011 that 200 water units and 10 sewer units will be added to the Utility; in FY 2012, we have assumed that 400 water units and 20 sewer units will be added; in FY 2013, we have assumed 600 water units and 30 sewer units will be added; in FY 2014, we have assumed 800 water units and 40 sewer units will be added; and in FY 2015, continuing each year thereafter, 2 Based upon a review of historical spending verse budget, Personal Services were assumed to be executed at 96% of budgeted/projected amounts in all years of the analysis. Likewise, remaining operating and maintenance expenses were assumed to be executed at 95% of annual budgeted/projected amounts. 3 The General Fund Allocation pertains specifically to the annual reimbursement to the General Fund for services benefiting the Utility, and does not include the PaymentInLieuOfFranchise Fee (calculated annually based upon 6% of Net Operating Income) or the Transfer of Surplus Funds (held constant at $3,600,000 per year). 5

11 REVENUE SUFFICIENCY ANALYSIS we have assumed 1,000 water units and 50 sewer units of growth will be added to the Utility 4. This assumed growth schedule represents annual growth rates ranging from 0.22% 1.08% in the water system, and 0.11% 0.55 in the sewer system Price Elasticity This adjustment is incorporated into the FAMS model to reflect that as rates increase, discretionary water consumption (and therefore sewer sales to a certain degree) will likely decline. Therefore, in order to generate sufficient revenue, projected rate increases will have to be adjusted to reflect a smaller revenue base to which they will be applied, thus causing the projected rate increases to be larger. The price elasticity adjustment reduces consumptionbased revenues by the product of the annual rate increase and the annual assumed elasticity coefficient. In each year of the projection period, the price elasticity coefficient assumed is 0.20, which means that for every 10% increase in price, the RSA reflects a 2% reduction in water, sewer, and reclaimed water consumptionbased revenues Capital Projects Funding The capital improvement program, through FY 2020, was provided by City staff. Beginning in FY 2012, we have included an annual cost inflation factor of 3.79% (based upon the average increase in the Engineering News Record Construction Cost Index, ) so as to account for inflation in the future cost of construction. In total, the capital improvement program from FY 2010 FY 2020 is in excess of $208 million. A detailed list of the specific projects and costs by year can be seen on Schedule 3 of Appendix A. As indicated previously, CH2MHill recently completed a Fixed Asset Inventory and Condition Evaluation Study that identified approximately $10 million per year for the next 20years of renewal and replacement for the Utility s aging infrastructure. However, due to other nearterm financial requirements as well as consideration of customer 4 It is assumed every new connection to the sewer system also connects to the reclaimed water system. 6

12 REVENUE SUFFICIENCY ANALYSIS impacts, the capital improvement program reflects a phasein of renewal and replacement funding that begins with $1 million in FY 2011, $3 million in FY 2012, and then reflects $10 million in FY 2013 and each year thereafter Borrowing Assumptions To the extent new debt is required in any year of the projection period, it is assumed to carry the following terms: LongTerm Debt: Term: 30 Years Interest Rate: 5.00% in FY 2010, increasing by 0.25% per year through FY 2014, where it will remain at 6.00% in each year of the projection period thereafter Cost of Issuance: 1.50% of Par Debt Service Reserve: Equal to 1 year of annual debt service expense State Revolving Fund (SRF) Loans 5 : Term: 20 Years Interest Rate: 2.75% in FY 2010, increasing to 3.00% in each year of the projection period thereafter Cost of Issuance: 0.50% of Par Loan Repayment Res.: 3.00% of Capital Cost Loan Service Fee: 2.00% of Capital Cost Debt Service and Coverage The Utility must maintain net revenues (gross revenues minus operating expenses), plus impact fees, that is at least 1.25 times greater than the annual debt service expense (i.e. the annual principal and interest payments) on its outstanding seniorlien debt. This coverage requirement is a minimum requirement. To the extent the Utility is unable to meet this requirement, it could be found in technical default resulting in the Utility 5 Certain capital improvement projects have been identified as eligible to be funded with SRF loans. 7

13 REVENUE SUFFICIENCY ANALYSIS having its credit rating downgraded, which would affect the interest rate and terms of future financing initiatives. As a policy decision, utilities often measure revenue sufficiency and set rates based upon a higher coverage level so as to ensure compliance with these covenants in the event future projections of revenue and expenses do not occur as predicted. As such, the RSA reflects a debt service coverage ratio target of 1.50, which is considered Adequate for Good utility systems 6 by one of the municipal utility system rating agencies. Additionally, on its outstanding SRF debt the Utility must maintain net revenues (gross revenues minus operating expenses, seniorlien debt service expenses, and any revenue necessary to meet the seniorlien debt service coverage requirements) of 1.20 times greater than the annual debt service expense on its outstanding SRF debt. The rate adjustment plans presented in this Report also maintain SRF debt service coverage ratios at or above a target of 1.50 as well Minimum Operating Reserve The Utility maintains a minimum operating reserve equal to 3months of operating and maintenance expenses. The level of operating reserve is within the typical industry range in Florida as well as the prudent range as identified by a recent analysis conducted by the Rates and Charges Subcommittee of the American Water Works Association (AWWA). Based upon our industry experience, water and sewer utilities will generally target a minimum working capital reserve, or operating reserve, in the range of 2 6 months of operating and maintenance expenses. This range is consistent with the results of the recent analysis performed by the Rates and Charges Subcommittee of the AWWA, which concluded that adequate working capital reserves for water and sewer utility systems should be between 2 6 months of operating and maintenance expenses. 6 As recently published by the municipal utility rating agency, Standard & Poor s (September 2008). 8

14 REVENUE SUFFICIENCY ANALYSIS 2.3 RESULTS The fundamental objective of the RSA was to ensure sufficient annual water, sewer, and reclaimed water revenue over a fiveyear planning period to cover annual operating, maintenance, and capital costs (including system renewal and replacement requirements) while maintaining adequate reserves and debt service coverage levels. Upon initializing the RSA, it became clear that the Utility was facing 1) significant nearterm operating expenditure shortfalls that were reducing reserves, and 2) additional funding requirements to address infrastructure renewal and replacement. In order to address these current and future financial challenges, the RSA determined that a plan of multiyear water, sewer, and reclaimed water rate revenue adjustments was required. Specifically the plan of rate revenue adjustments needed to reflect higher adjustments in the nearterm (i.e. in FY 2010 and/or FY 2011) to correct the current operating expenditure shortfall and maintain an appropriate operating reserve. Once the cash flow deficit is corrected, the RSA identified that a plan of annual rate revenue increases of 5.00% beginning in FY 2012 are required to fund annual renewal and replacement requirements as identified by the City s consulting engineer, increases in annual operating and maintenance expenses, and to maintain adequate operating reserves and debt service coverage ratios. Based upon the foregoing, the RSA initially resulted in two alternative water, sewer, and reclaimed water rate revenue adjustment plans: Option 1: 17.00% rate revenue increase on 10/1/10 (FY 2011), 5% annual increases thereafter on 10/1/2011 (FY 2012) Option 2: 9.00% rate revenue increase on 7/1/10 (FY 2010), 8.00% on 10/1/10 (FY 2011), 5% annual increases thereafter on 10/1/2011 (FY 2012) Upon presentation of these initial options to the City Council and UAB, an additional option (Option 3) was introduced in order to mitigate nearterm customer impacts as much as possible without significantly comprising the Utility s reserves or debt service coverage ratios: 9

15 REVENUE SUFFICIENCY ANALYSIS Option 3: 9.00% rate revenue increase on 7/1/10 (FY 2010), 8.00% on 1/1/11 (FY 2011), 5% annual increases thereafter on 10/1/2011 (FY 2012) Option 1 is a fix and go plan, in that a single large rate revenue adjustment in FY 2011 corrects the nearterm cash flow shortfall and provides an operating reserve at targeted amounts in each year of the planning period. Options 2 and 3 employ two nearterm rate revenue adjustments instead of one, with the first being in FY 2010 and the second in FY Option 2 provides for two rate revenue adjustments over a 3month period, while Option 3 provides for two rate adjustments over a 6month period. While Option 3 results in slightly lower debt service coverage and unrestricted reserve balances 7 than Option 2 in FY 2011 and FY 2012, it was determined to be within acceptable tolerances in order to accommodate customer impact objectives to the greatest extent possible. It is important to note that recommended rate structure modifications or changes (discussed in detail in the next section of this Report) can be implemented with any of these options and would result in different customer impacts depending upon monthly water consumption. Based upon discussions to date with City Council and the UAB, the preferred rate revenue adjustment plan appears to be Option 3. Therefore, the detailed supporting financial schedules included in Appendix A of this Report for the RSA reflect Option 3, as does the Rate Design Analysis presented in the next section of Report. 2.4 CONCLUSIONS & RECOMMENDATIONS Based upon the analysis presented herein and the results presented in the prior subsection, we have reached the following conclusions and recommendations: 7 In Option 3, the unrestricted reserve balance in FY 2011 is projected to be $6.7 million compared to $7.5 million under Option 2 and the targeted amount of $8.1 million. In FY 2012, the unrestricted reserve balance under Option 3 is projected to be $7.8 million compared to $8.4 million under Option 2 and the targeted amount of $8.4 million. 10

16 REVENUE SUFFICIENCY ANALYSIS The Utility s water, sewer, and reclaimed water revenues are insufficient to meet its current and projected operating expenditure requirements, maintain adequate reserves, and fund identified renewal and replacement requirements. As a result of these conditions, a multiyear plan of rate revenue adjustments is required to meet the Utility s ongoing operating expenditure requirements, fund renewal and replacement of its infrastructure, and to meet current stated reserve and debt service coverage parameters for good utility systems as measured by municipal utility rating agencies and consistent with industry practice. Based upon the analysis presented herein, we recommend that the City adopt the plan of multiyear water, sewer, and reclaimed water rate revenue adjustments for Option 3. Moreover, we recommend that the first revenue adjustment be included within the specific rate structure modifications recommended in the next section of this Report for implementation on 7/1/2010. Thereafter, those rates would be adjusted by 8.00% on 1/1/2011 and then by 5% annually thereafter beginning on 10/1/2011. The City should update this analysis on an annual or biannual basis to evaluate the adequacy of its revenues and plan of annual water, sewer, and reclaimed water rate increases. Doing so will allow for the incorporation of updated revenue and expense information as well as changes in economic conditions, water consumption, regulatory requirements, and other factors so that any necessary adjustments can be made to the financial management plan presented herein. This will allow the Utility to meet its financial and operating requirements during the projection period and minimize rate impacts to customers from future events occurring differently than currently projected. 11

17 RATE DESIGN ANALYSIS SECTION 3. FY 2010 RATE DESIGN ANALYSIS Burton & Associates examined the current monthly retail water, sewer, and reclaimed water rates and developed recommended rate structure modifications that should be considered to conform to legal precedent, generally accepted rate making practice in terms of fair and equitable distribution of the costs of service, provide additional incentives for water conservation, and to maintain affordability for low volume users. 3.1 BASIS OF PROPOSED RATE STRUCTURE We have reviewed the Utility s current water, sewer, and reclaimed water rate structure and concluded that it is generally fair and equitable and in conformance with legal precedent and common industry practice. Nevertheless, we do recommend minor modifications to the water rate structure to 1) provide a stronger price signal to discretionary use to promote conservation and maintain affordability for low volume users, and 2) reflect the current average usage patterns by meter size in determining how much consumption is included in each tier of the inclining block rate structure for each respective meter size. It is important to note that the recommended water, sewer, and reclaimed water rates presented and intended for implementation of 7/1/2010 are designed to provide the additional revenues identified for Option 3 in the RSA (a 9.00% increase revenue) while conforming with legal precedent and accepted industry practice, providing greater price incentives for water conservation, and maintaining affordability for low volume and average users to the greatest extent possible. It is equally important to note that while no rate structure changes are recommended for the Utility s sewer or reclaimed water rates, the recommended rates have been adjusted to achieve the identified level of revenue increase for Option 3 and to account for the impacts of assumed demand reductions due to price elasticity. 12

18 RATE DESIGN ANALYSIS 3.2 WATER RATES Water Fixed Monthly Charges Current Rates The current fixed monthly charge or base facility charge is $10.47 per month for Inside City customers with a 3/4 meter (the City has a 10% surcharge for customers located outside of the City). This charge is intended to recover a portion of the fixed costs associated with average day usage and base operating and maintenance of the system. The fixed charge is applied on the basis of meter size for all customer types (singlefamily residential, multifamily residential, commercial, etc). Under the current structure, customers with larger meter sizes pay a greater charge indicative of the higher demands these customers place on the system. Recommendation The current structure conforms to legal precedent and common industry practice, and is a fair and equitable method of recovering a portion of fixed costs of the system. As such, we do not recommend revisions to the current fixed monthly fee structure. However, we do recommend a small adjustment to the level of the charge in order to recover a portion of the additional rate revenue identified in the RSA for Option 3. A complete schedule of the recommended fixed monthly charges by meter size is included later in this section of the Report Water Usage Rates Current Rates Usage charges are intended to recover the portion of the operations and maintenance, debt service, and capital funding costs not recovered by the fixed monthly charges. The Utility currently has a fourtier inclining block rate structure where the amount of consumption in each tier is scaled by meter size similar to the current fixed charges. Adjusting the consumption in each tier for each meter size avoids applying conservation rates intended primarily for excessive irrigation to businesses and other customers whose water use in many cases is a function of business production/processes (such as a car wash or laundromat) or who have little ability to reduce water usage in response to price. 13

19 RATE DESIGN ANALYSIS It is our understanding that the consumption in each tier was initially established for a 3/4 meter customer based upon an analysis of the thencurrent use for all customers with this meter size. Specifically, it is our understanding that the topend or limit of the first tier (up to 8,000 gallons per month) was set based upon the thencurrent average use for customers with a 3/4 meter, with the subsequent tiers set at multiples or increments of that average use 8. Once the consumption in each tier was established for the 3/4 meter customers, it was then adjusted for each larger meter size based upon the ratio of average or typical use for each larger meter size to that for the 3/4" meter size. For example, the blocks for customers with a 2 meter are based upon those for the 3/4" meter size adjusted by a factor of 12.5, with the topend of limit of the first tier being equal to 100,000 gallons per month (8,000 gallons multiplied by the aforementioned factor of 12.5), the topend or limit of the second tier being equal to 200,000 gallons (16,000 gallons multiplied by 12.5), etc. The table below presents the Utility s current Inside City water usage rates and consumption for each tier by meter size. The consumption in each tier is the same for Outside City customers; however the usage rates for each tier reflect a 10% surcharge. WATER USAGE RATES TIER 1 TIER 2 TIER 3 TIER 4 Inside City Rate ($ / TGAL) $2.10 $3.07 $4.53 $6.50 (Use in Thousand Gallons) 3/4" Over 24 1" Over " Over 160 2" Over 400 Recommendation We have made the following recommendations for the Utility s 3" ,600 Over 1,600 SingleFamily, 4" MultiFamily, 0 NonResidential, ,200 Irrigation, 1,200 and 1,800 HighVolume Over 1,800 User 6" 0 2,000 2,000 4,000 4,000 6,000 Over 6,000 account types: 8" 0 6,000 6,000 12,000 12,000 18,000 Over 18,000 10" 0 20,000 20,000 40,000 40,000 60,000 Over 60,000 8 The second tier for a customer with a 3/4 meter is from 8,001 to 16,000 gallons, the third tier is for consumption from 16,001 24,000 gallons per month, and the fourth tier is applicable to all consumption greater than 24,000 gallons per month. 14

20 RATE DESIGN ANALYSIS Recommendation The current water usage rate structure conforms to legal precedent and common industry practice, and is generally fair and equitable. However, we do recommend the following minor modifications: 1) Update the topend consumption in the first tier for the 3/4 meter size to reflect the current (FY 2009) average use (now 6,000 gallons per month) and adjust the consumption in the second and third tiers based upon similar increments or multipliers of the updated average use. 2) Adjust the rates in each tier to provide a greater price signal to discretionary use and to maintain affordability for low volume users. While all of the current water usage rates need to be increased to provide a portion of the additional 9% revenue adjustment required under Option 3 of the RSA (effective 7/1/2010), we recommended adjusting the rates for each tier differently. Specifically, we recommend a smaller adjustment to the rate applicable to water consumption in the first tier in order to maintain affordability and larger adjustments to the rates for the remaining tiers to provide a stronger price signal to promote water conservation. The table below presents the recommended Inside City water usage rates and consumption for each tier by meter size to be effective 7/1/2010. WATER USE PER TIER TIER 1 TIER 2 TIER 3 TIER 4 Inside City Rate ($ / TGAL) $2.19 $4.20 $5.47 $7.38 (Use in Thousand Gallons) 3/4" Over 24 1" Over " Over 168 2" Over 408 3" ,680 Over 1,680 4" ,380 1,380 2,760 Over 2,760 6" 0 3,300 3,300 6,600 6,600 13,200 Over 13,200 8" 0 12,000 12,000 24,000 24,000 48,000 Over 48,000 10" 0 21,000 21,000 42,000 42,000 84,000 Over 84,000 15

21 RATE DESIGN ANALYSIS 3.3 SEWER RATES & RECLAIMED WATER RATES Current Rates The Utility s current sewer and reclaimed water rate structures conform to legal precedent and common industry practice, and are a fair and equitable method of recovering the costs of each respective system. Recommendation As such, we do not have any recommended modifications to these respective rate structures. Therefore, the only recommended adjustment to reclaimed water rates to be effective 7/1/2010 is for the identified level of revenue increase of Option 3. Similarly, the only adjustments to sewer rates are to account for the additional level of revenue increase for Option 3 to be effective 7/1/2010 and the estimated impacts of demand reductions due to assumed price elasticity from the recommended water rates also to be effective 7/1/2010 (as metered water use is the basis of sewer billings). The recommended sewer rates to be effective on 7/1/2010 are identified on the rate schedule in Appendix B. 3.4 PRICE ELASTICITY As water and sewer rates increase, discretionary water and sewer usage will generally decline. Because changes in water use in response to price are a function of the increase in price and the level of discretionary water usage, the recommended modifications to the current rate structure are expected to have an impact on total water usage. Overall, the recommended rate structure is anticipated to produce an overall systemwide billed water use reduction of 12%. That effect has been factored into the calculations of the recommended rates presented in this Report. It is important to note that the estimated water use reductions in this case are fairly modest due to 1) the fact that the recommended rates do not constitute a substantial change in the City s existing conservation rate structure, and 2) that a portion of customers use that is discretionary and would be affected by price has already been reduced somewhat due to the City s existing conservation rate structure. 16

22 3.5 SCHEDULE OF RECOMMENDED RATES RATE DESIGN ANALYSIS It is our recommendation that the adjustments discussed in Sections 3.2 and 3.3 should be made to the current water, sewer, and reclaimed water rates to address conformance to accepted industry practice, water conservation, and affordability objectives. Based upon discussions with City staff, it is our understanding that the Utility s customer billing system can accommodate these recommended changes in rate structure. Schedule 1 in Appendix B presents the specific recommended water and sewer rates for implementation on 7/1/2010 based upon the revenue requirements as identified in the RSA for FY 2010 per Option 3 and the rate structure modifications presented herein. Schedule 2 reflects the rates that would be effective on 1/1/2011 for Option CUSTOMER IMPACT ANALYSIS In considering implementation of the recommended changes to the water and sewer rates, it is important to examine the impact that those adjustments will have upon the monthly water and sewer bill of the Utility s customers. Implementation of the recommended water and sewer rates will impact customers with different usage patterns differently. Schedule 3 in Appendix B presents the customer impact upon an OutsideCity singlefamily residential customer s monthly water bill at consumption levels in 1,000 gallon per month increments up to 20,000 gallons per month. As can be seen the recommended rate design to be effective 7/1/2010 has very small impacts to customers with low to average levels of water use (which represents the majority of the Utility s OutsideCity residential bills issued), while providing a stronger price signal to customers with higher levels of usage to increase water conservation. Schedule 4 in Appendix B presents the customer impact upon an InsideCity Single Family Residential customer s monthly water and sewer bill at consumption levels in 1,000 gallon per month increments up to 20,000 gallons per month. As with Outside City water residential customers, the recommended rate design to be effective 7/1/2010 has very small impacts to customers with low to average levels of water use (which represents the majority of the Utility s InsideCity residential bills issued), while 17

23 RATE DESIGN ANALYSIS providing a stronger price signal to customers with higher levels of usage to increase water conservation. In addition to evaluating the impacts of the recommended rates to residential customers, Schedule 5 presents an analysis of the impact to various nonresidential customers with different meter sizes, services, and monthly consumptions. Consistent with the impacts to residential customers, Schedule 5 demonstrates that the recommended rates achieve affordability objective for lower volume users and provides conservation incentives for higher volume users at each meter size. 3.7 RATE SURVEY RESULTS We performed a comparative survey of the singlefamily water and sewer rates of other utilities in Brevard County. This survey included monthly water only (Schedule 6 of Appendix B) as well as combined water and sewer bill (Schedule 7 of Appendix B) calculations based upon the rates in effect for each community in FY 2010 and compared those to the potential monthly cost to the City under the various options presented herein. The results of the survey indicate that the Utility currently has a monthly bill that is currently at the lower end of utilities surveyed for a typical residential user (6,000 gallons per month). If a 9.00% rate revenue increase is implemented on 7/1/10, whether across the board or through the rate structure changes recommended herein, the Utility will still have one of the lowest utility bills in Brevard County for FY It is important to note that while the survey does include the monthly bill for Cocoa for Option 1 of the RSA (i.e. a 17% rate revenue increase with no rate structure changes), that bill would be in effect as of 10/1/2010, or the beginning of FY The monthly bills included for the entities surveyed are based upon their current FY 2010 rates. It is very likely that the majority of the entities surveyed will have rate adjustments effective at the beginning of FY 2011 as well. Therefore, it is our expectation that with any of the RSA rate revenue adjustment plan options, with or without rate structure modifications, the Utility will continue to have low to average monthly utility bills in FY 2011 for typical residential users. 18

24 IMPACT FEE ANALYSIS SECTION 4. IMPACT FEE ANALYSIS This section of the Report presents the Impact Fee Analysis that was conducted as part of the Study. 4.1 BACKGROUND The currently assesses capital charges for water and sewer that are designed to recover the cost of water and sewer capacity from new connectors to their respective systems. Capital charges are commonly referred to as impact fees, capacity fees, or connection charges and for the purposed of this Report will be interchangeable with capital charges. Impact fees are charges which are assessed against new development in an attempt to cover the cost of providing capital facilities (infrastructure) needed to serve new development. Such fees are the mechanism by which growth can pay its own way and minimize the extent to which existing residences must bear the cost of new or expanded facilities which are necessitated by new residents. The Growth Management legislation passed in 1985 enacted statutory guidelines that generally follow the rational nexus standard from case law. This rational nexus standard requires that impact fees must 1) bear a reasonable relationship to the benefit received by those who pay it, 2) must not exceed the proportional share of the cost of new facilities or services needed to serve new development and must include credits for contributions the development will make toward deferring that cost, and 3) must be earmarked and expended in such a way as to ensure that those paying the fee receive benefit from that payment. Recently, new legislation was passed (Senate Bill 1194) that created Section , Florida Statutes that has also come to be known as the Florida Impact Fee Act. This legislation outlined new requirements in addition to rational nexus standard from case law regarding the calculation/accounting of impact fees. Most notably, the legislation 19

25 IMPACT FEE ANALYSIS requires 1) that the calculation of impact fees be based upon the most recent, localized data, 2) separate reporting/accounting of impact fee revenue and expenditures in a distinct fund, 3) that the administrative charges collected in impact fees be based upon actual costs, and 4) that 90 days notice be given prior to the effective date of an ordinance imposing or amending an impact fee. 4.2 DESCRIPTION The objective of the Impact Fee Analysis was to determine the 100% cost recovery impact fees for the water and sewer systems and provide a comparison of the results to the fees charged by other neighboring communities in Brevard County. When calculating impact fees, there are three primary approaches. One approach is to determine the replacement cost new, less depreciation (RCNLD), of each system s major functional components as the cost basis for the impact fee calculation. This approach is most appropriate for a system with considerable excess capacity such that most new connections to the system will be served by that existing excess capacity. The second approach is to use the portion of each system s 5 or 10year capital improvement program associated with the provision of additional system capacity by functional component as the cost basis for the impact fee calculation. This approach is most appropriate where 1) the existing system has virtually no excess capacity to accommodate growth and 2) the capital improvement program has a significant number of projects that provide additional system capacity for each functional system component to be representative of the cost of capacity for an entire system. The third approach is to use a combination of the two other approaches. This approach is most appropriate when 1) there is excess capacity in the current system that will accommodate some growth, but additional capacity is needed in the shortterm as reflected in each system s capital improvement program, and 2) the capital improvement program includes a significant amount of projects that will provide additional system capacity, but does not necessarily have a sufficient amount of projects in each functional component to be reflective of a total system. 20

26 IMPACT FEE ANALYSIS The City s Consulting Engineer, CH2MHill, recently completed a Fixed Asset Inventory and Condition Evaluation Study that evaluated the Utility s existing water and sewer system infrastructure and determined the FY 2010 replacements cost of the water and sewer system assets. Regarding the water system, the study concluded that the total estimated system assets are valued at approximately $985 million. Regarding the sewer system, estimated total system assets (including reclaimed water system assets) are valued at approximately $137 million. Given that this analysis was just completed and because there is not a significant portion of the capital improvement program associated with capacity expansion, the first approach was employed in updating the Utility s water and sewer impact fees. 4.3 ANALYSIS The first step in calculating the water and sewer impact fees was to identify the capacity cost (in this case the RCNLD based upon the CH2MHill study) for each functional system component: water transmission, water treatment, water supply, water storage and pumping, sewer collection and pumping, sewer treatment, and reclaimed water. The capacities, in million gallons per day (MGD), were provided by City staff for each functional system component and were converted to equivalent residential connections (ERCs) based upon the ERC usage factors provided by City staff. The capacity cost for each functional system component was then divided by the capacity, in ERCs, for each functional system component to determine the capacity cost per ERC. When a new customer connects to either system, that customer will begin to use water and sewer services and will pay the user fees for the benefit received from those services. The user fees will include principal and interest payments associated with the debt funding of expansionrelated infrastructure. Therefore, in order to avoid a double recovery of those capital costs in the impact fees, a credit was calculated for each impact fee based upon the net present value of the annual debt service (through the term of the debt) that the average connection will pay after connecting to each system. This credit was deducted from the capacity cost per ERC to determine the full cost recovery water and sewer impact fees per ERC. In addition to the debt service credit, the capacity cost per ERC was also reduced by 4.00% as an allowance for estimation and contingency. 21

27 IMPACT FEE ANALYSIS 4.4 RESULTS Based upon the approach, data, and calculation process presented herein, the full cost recovery water impact fee was determined to be $1,802 verse the current water impact fee of $1,000, an $802 increase. Similarly, the full cost recovery sewer impact fee was determined to be $2,715 verse the current sewer impact fee of $2,700, or a $15 increase 9. The supporting data, calculation, and results of each impact fee calculation are presented in Appendix C of this Report. In light of current economic conditions, upon presentation of the results of the analysis to the UAB and City Council, it was determined that the updated full cost recovery water and sewer impact fees should be phasedin over a 3year period. As part of the Impact Fee Analysis, we performed an impact fee survey of the same neighboring communities within Brevard County selected for the monthly utility rate survey to determine the relative market range of water and sewer impact fees in the surrounding geographic area. The results of the water impact fee survey (presented in Appendix C of this Report) indicate that water impact fees range from $1,000 $3,726 in the surrounding geographic area and that the average water impact fee (excluding the ) is $1,650. Regarding the sewer impact fee, the survey indicates that sewer impact fees range from $1,583 $3,144 in the surrounding geographic area and that the average sewer impact fee (excluding the ) is $2,375. The impact fee surveys indicate that the full cost recovery water and sewer impact fees are well within the range of fees in the area. 9 The current sewer impact fee of $2,700 per ERC includes the $1,450 force main capacity charge. 22

28 MISCELLANEOUS SERVICE CHARGES SECTION 5. MISCELLANEOUS SERVICE CHARGES This section of the report presents the analysis of Miscellaneous Service Charges that was conducted as part of the Study. 5.1 DESCRIPTION The Utility currently charges Miscellaneous Service Charges in relation to the provision of specific services to individual customers. Trip charges, meter calibrations, reconnections, and customerrequested meter rereads are examples of the types of services for which the Utility has various Miscellaneous Service Charges. The intent of Miscellaneous Service Charges is to ensure the recipient of the benefit of a specific service bears the costs associated with providing that service. Miscellaneous Service Charges are calculated by determining the costs associated with providing that service. Those costs include both the time and materials necessary to provide that service. Identification of the type of employee(s) involved in providing the specific service (meter reader, service technician, billing clerk, customer service representative, etc.) and of the materials used (water meter, couplings, forms, vehicles, equipment, etc.) is the first step in developing the appropriate fee for the Miscellaneous Service Charges. The employee(s) cost, including any overhead allocations (i.e. fringe benefits) are then added to the costs of materials, including any overhead allocations (purchasing, warehousing, etc.) to determine the specific Miscellaneous Service Charge. Burton & Associates created a costofservice template for each Miscellaneous Service Charge listed in the Utility s Ordinance and Rate Resolutions as well as for new charges for the Utility to consider for services it provides but does not currently charge for. This template provided a consistent methodology for assigning the appropriate time and material costs necessary for providing each service. Burton & Associates then worked with City staff to populate and refine the templates. Ultimately, City staff will finalize the results and provide final recommended Miscellaneous Service Charges as part of a future proposed ordinance/resolution revision in order to be adopted. 23

29 MISCELLANEOUS SERVICE CHARGES SECTION 6. COUNCIL ACTION On June 8, 2010, the City Council held a public hearing to approve the recommended adjustments to the Utility s rates, fees, and charges included in this Report. The following actions were unanimously approved by the City Council at the public hearing. 6.1 REVENUE SUFFICIENCY ANALYSIS The City Council approved a plan of water, sewer, and reclaimed water rate revenue adjustments consisting of a 9.00% adjustment on October 1, 2010 (instead of July 1, 2010 as recommended), and an 8.00% adjustment on January 1, Subsequent rate revenue adjustments will be determined by future revenue sufficiency analysis updates. The supporting financial schedules reflecting the approved plan of rate revenue adjustments, followed by the recommended 5.00% annual adjustments each year thereafter, are presented in Appendix D of this Report. 6.2 RATE DESIGN ANALYSIS The City Council approved the recommended rate structure adjustments presented in this Report to occur in conjunction with the implementation of the approved 9.00% adjustment on October 1, 2010 (instead of July 1, 2010 as recommended). 6.3 IMPACT FEE ANALYSIS The City Council approved a twoyear plan of adjustments to the current water impact fee that increase the fee from $1,000 per ERU to $1,400 per ERU effective October 1, 2010, and then from $1,400 per ERU to $1,750 per ERU effective October 1, There was no action taken by City Council to adjust the current sewer impact fee. 6.4 MISCELLANEOUS SERVICE CHARGES No action was taken by the City Council in regards to Miscellaneous Service Charges as City staff did not propose any adjustments for consideration at the public hearing. 24

30 APPENDIX A Appendix A Supporting Financial Schedules for the RSA Option 3: (9% Rate Revenue Increase on 7/1/10, 8% Rate Revenue Increase on 1/1/2011, and 5% annual increases beginning on 10/1/2011) Schedule 1 contains the assumptions of the RSA Schedule 2 identifies the end of FY 2009 fund balances that serve as the FY 2010 beginning balances of the analysis Schedule 3 provides a listing of the tenyear capital improvement program that was utilized in the RSA Schedule 4 presents a detailed list of all projected cash inflows from FY Schedule 5 presents a detailed list of all projected cash outflows from FY Schedule 6 contains the FAMSXL Control Panel that presents a summary of the financial management plan, including annual rate increases, debt service coverage ratios, total CIP spending levels, customer impacts, and fund balances Schedule 7 presents the projected annual net income, debt service coverage, and cash flow results Schedule 8 shows the projected funding sources for the capital improvement program Schedule 9 contains the calculation of projected annual longterm borrowing Schedule 10 contains the calculation of projected annual SRF borrowing Schedule 11 presents a fundlevel cash flow reconciliation, providing the beginning balance in each year, the amount utilized for project funding or payment of debt service, interest calculations, and the end of year fund balance 25

31 Schedule 1 Assumptions APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Assumptions Annual Growth & Cost Escalators: FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Water System Growth: Customer Growth 0.00% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Use Growth 4.50% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Sewer System Growth: Customer Growth 0.00% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Use Growth 4.50% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Reclaimed Water System Growth: Customer Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Use Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Operating & Maintenance Expenses: Personnel Expenses: 2300 Life/Health Insurance N/A 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% All Other Personnel Expenses N/A 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Major Operating Expenses: 3400 Contract Services N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3410 Allocations General Fund N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 4300 Electric/Water/Sewer Service N/A 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 4600 Repairs & Maintenance N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 5200 Operating Supplies N/A 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Average Annual Increase in O&M Expenses: (1) N/A 4.39% 4.43% 4.46% 4.51% 4.57% 4.62% 4.67% 4.73% 4.79% 4.85% Capital Outlay: Machinery & Equipment N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% (1) It is assumed in the analysis that any operating expense not listed as a Major Operating Expense will escalate annually by 2.50% to 3.50% in each year of the projection period, except for 4907 Bad Debt Expense which is projected to escalate annually by the weighted average rate of increase in rate revenue. 26

32 Schedule 1 Assumptions APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Assumptions Debt Assumptions: Other Assumptions: % of Debt Service Avail to be Funded with Impact Fees: (1) Rate Increase Implementation Date: Water Impact Fees FY 2010 July 1 FY % FY 2011 January 1 Sewer Impact Fees FY October 1 FY % Price Elasticity Coefficient Debt Service Coverage Requirements: FY Rate Covenant Test I Net Revenues Only 1.00 Rate Covenant Test II Net Rev plus Impact Fees 1.25 Interest Earnings Rate On Fund Balances: Rate Coveneant Test Planning Requirement 1.50 FY % FY % SRF Loan Coverage Requirement 1.20 FY % SRF Loan Planning Requirement 1.50 FY % FY 2014 FY % LongTerm Financing: Bond Term 30 Years Working Capital Reserve Target: Months of O&M Interest Rate FY FY % Per Year FY % Per Year % of Budget Required For Desired Rate Increase: FY % Per Year FY % Per Year Personnel Services FY % Per Year FY % Cost of Issuance 1.50% of Par Underwriter's Discount $0.00 per $1,000 Operating & Maintenance Bond Insurance times total Debt Service FY % Capitalized Interest Years Interest Debt Service Surety 0.00% of Debt Service Capital Improvement Program Debt Service Reserve 1 Years of Debt Service FY % SRF Loan Financing: Annual Impact Fees Charged for Each ERU of Growth Assumed: (1) Bond Term 20 Years Interest Rate Water Impact Fees (w/out Reclaimed Water Service Available) FY % Per Year FY 2010 $ 1,000 FY % Per Year FY 2011 $ 1,267 Cost of Issuance 0.50% of Par FY 2012 $ 1,534 Loan Repayment Res. 3.00% of Capital Cost FY $ 1,802 Loan Service Fee 2.00% of Capital Cost Capitalized Interest Years Interest Water Impact Fees (w/ Reclaimed Water Service Available) Debt Service Reserve Years of Debt Service FY $ 650 Sewer Impact Fees FY 2010 $ 2,700 FY 2011 $ 2,705 FY 2012 $ 2,710 FY $ 2,715 (1) Approximately 94% of total annual debt service (total annual debt service less annual 2009A Revenue Bond debt service) is eligible to be funded with impact fees. It is assumed in the analysis that of the annual debt service eligible to be funded with impact fees, 50% is to be funded with water impact fees and 50% with sewer impact fees. (1) Based upon discussions with staff, it was determined that the recommeneded water and sewer impact fee increases, as calculated by Burton & Associates, be phasedin over a three year period. 27

33 Schedule 2 Beginning Balances APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Beginning Balances (1) FUND TITLE 10/1/2009 Water Impact Fees $ Sewer Impact Fees $ Series 2009A Revenue Bond Proceeds $ 8,978,975 Existing SRF Loan Proceeds $ 1,054,003 Capital Projects Fund $ Renewal & Replacement (2) $ 2,838,188 Revenue Fund (3) $ 13,354,598 Restricted Reserves $ 3,391,329 Total Consolidated Fund Balance $ 29,617,092 (1) FY 2010 Beginning Fund Balances are based upon estimated cash balances, provided by staff, as of 9/30/2009 and as such are subject to potential adjustment. (2) Any funds available above the $2,750,000 Renewal & Replacement Fund minimum requirement are reserved for capital not to be funded with revenue bond or SRF loan proceeds. (3) Revenue Fund includes current estimate of unrestricted cash onhand and Bond Sinking Fund reserves available for FY 2010 debt service payments. It is important to note that per discussions with staff, a $2 million deduction was made from the original estimate of cash onhand to account for cash received from billing customers whose service was provided for by other municipalities to whom that cash is owed and for other anticipated requirements yet to be paid. 28

34 Schedule 3 Capital Improvement Plan APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY Field Services Division: FY 2010 Budget Replace VehiclesField Service/Meter Shop $ $ $ $ $ $ $ $ $ $ $ FY 2010 CIP Replace VehiclesField Service/Meter Shop $ $ $ $ $ $ $ $ $ $ $ 4010 Administrative/Engineering Division: FY 2010 Budget: Project #WS0902 New Utilities A&E/Lab Building $ $ $ $ $ $ $ $ $ $ $ Remodel 600 School Street $ 75,000 $ $ $ $ $ $ $ $ $ $ Project #WS0501 Wellfield Pipe 48" $ $ $ $ $ $ $ $ $ $ $ Project #WS0403 US1 Widening Park to Rosa L. Jones $ $ $ $ $ $ $ $ $ $ $ Project #WS0401 US1 Widening Rosa L. Jones to Brunson/Pine $ $ $ $ $ $ $ $ $ $ $ Project #WS0402 US1 Widening Brunson/Pine to Cidco $ $ $ $ $ $ $ $ $ $ $ Project #WS0603 East Central Florida Regional Water Supply: Phase II Speci $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WS0405 South Mainland Water Main Extensions $ 100,000 $ $ $ $ $ $ $ $ $ $ Project #WS0709 Barnes Blvd/US1 $ $ $ $ $ $ $ $ $ $ $ Project #WS 0906 Barnes Fiske/Murrell $ 1,580,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX Security Measures for all UT AboveGround Facilities $ 150,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX South Mainland Water Quality Improvement Study $ $ $ $ $ $ $ $ $ $ $ FY 2011 FY 2020 CIP: New Utilities A&E/Lab Building, FF&E in 2015 [LOAN] $ $ $ $ 500,000 $ 5,000,000 $ 1,500,000 $ $ $ $ $ Wellfield Pipe 48" $ $ $ $ $ $ $ $ $ $ $ Port Canaveral 5mg G.S.T. & Pump Stn. [SRF] 2019 $ $ $ $ $ $ $ $ $ $ 275,000 $ 1,980,000 US1 Widening from Pine St. To Cidco Rd.: Replace Utilities (JA, $ due FY2010) [water $ $ $ 10,000,000 $ $ $ $ $ $ $ $ Replace VehiclesAdmin/Eng. $ $ $ $ $ $ $ $ $ $ $ Taylor Creek Road pipe (2400 feet) 2015 $ $ $ $ $ $ 600,000 $ $ $ $ $ Viera 5mg G.S.T #2 + Pump #3 + Pump Upgrades [LOAN] 2020 $ $ $ $ $ $ $ $ $ $ $ 1,800,000 South Mainland Water Quality ImprovementEng. Study $ $ $ $ $ $ $ $ $ $ $ U.S.1 between Barnes and Barton 16" WM (replace 8") [SRF] 2015 $ $ $ $ $ $ 2,080,000 $ $ $ $ $ Lab Information Management Software buy in '09; was $50 in '10 $ $ $ $ $ $ $ $ $ $ $ A&E Building Remodeling eliminate IFF new bldg. goes forward; $50k in '10 $ $ $ $ $ $ $ $ $ $ $ Security Measures for all UT aboveground facilities combine with 10041; $150/year x $ $ 544,000 $ 544,000 $ 544,000 $ 544,000 $ $ $ $ $ $ Grissom Pkwy to Canaveral Groves Blvd. new WM/RM [loan] 2015 $ $ $ $ $ $ 182,000 $ 1,815,000 $ $ $ $ 4015 Water Supply Division: FY 2010 Budget > Moved to 4020 $ $ $ $ $ $ $ $ $ $ $ FY 2011 FY 2020 CIP: Rehab. Wewa. Duty Pumps+Valves (8 over 4 years) thru 2011 $ $ 57,000 $ $ $ $ $ $ $ $ $ Upgrade Wewahootee Generators + Transfer Switches 2017 $ $ $ $ $ $ $ $ 1,000,000 $ $ $ Install hydropneumatic tank at Wewa. (surge study + design; replace piping + valves + $ $ 30,000 $ 200,000 $ 124,000 $ $ $ $ $ $ $ 29

35 Schedule 3 Capital Improvement Plan APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY Dyal Water Treatment Plant Division: FY 2010 Budget: Install 800KW Generator at Industrial Park $ $ $ $ $ $ $ $ $ $ $ Replace 5MG GST at Industrial Park $ $ $ $ $ $ $ $ $ $ $ Process Control System Improvments $ $ $ $ $ $ $ $ $ $ $ Chlorine Gas Conversion at Dyal $ $ $ $ $ $ $ $ $ $ $ Project #WS0821 Replace PLC Network $ 310,000 $ $ $ $ $ $ $ $ $ $ Dyal Facility Modernization Project $ $ $ $ $ $ $ $ $ $ $ Project #WS0711 Rehab Wewahootee Duty Pumps and Valves $ 57,000 $ $ $ $ $ $ $ $ $ $ Ozone Contractor Wall Refurbishment $ 200,000 $ $ $ $ $ $ $ $ $ $ Fencing and Security Issues $ 50,000 $ $ $ $ $ $ $ $ $ $ FY 2011 FY 2020 CIP: Expand Surface Water Treatment Plant [40% Bond/60% others] $ $ $ $ $ $ $ $ $ $ $ Install Bypass Piping around GST's (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Chlorine Gas Conversion Dyal $ $ $ $ $ $ $ $ $ $ $ Upgrade Operators Console (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Replace VehiclesDyal $ $ $ $ $ $ $ $ $ $ $ Dyal Plant Process Control System Improvements $ $ $ $ $ $ $ $ $ $ $ Install Liquid Oxygen System for Ozone (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Replace H.S. Pump EM Drives 2015 $ $ $ $ $ $ 350,000 $ 700,000 $ 300,000 $ $ $ Replace PLC Network (28) (PCP#2 in FY09 w/ budget amendment) $ $ 310,000 $ 310,000 $ 310,000 $ $ $ $ $ $ $ Rehab. Dyal Plant 5MG Storage Tank (east tank) $ $ $ $ 266,000 $ $ $ $ $ $ $ Install Discharge Piping Dyal to SR520 [BOND] (w/ plant expan.) $ $ $ $ $ $ $ $ $ $ $ Dyal Plant 10mg GST and appurtenances [BOND] (w/ plant expan.) $ $ $ $ $ $ $ $ $ $ $ Ozone injection system (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Install Rexa actuators on HSP 1,2,3,4 buy in '09? $ $ $ $ $ $ $ $ $ $ $ Purchase a bobcat $ $ $ $ $ $ $ $ $ $ $ Replace control drives (3) one per year $ $ 310,000 $ 310,000 $ 310,000 $ $ $ $ $ $ $ 4025 Transmission & Distribution Division: FY 2010 Budget: Project #WS0706 New Building for MultiUse $ $ $ $ $ $ $ $ $ $ $ Project #WS10XX #1Space Coast Gardens Distribution Improvments $ 100,000 $ $ $ $ $ $ $ $ $ $ #2Replacement of Mains by Contractor $ 200,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX #3Valve Improvement Program $ $ $ $ $ $ $ $ $ $ $ Project #WS08MT #4New Meters/Services/BFP for New Customers $ 200,000 $ $ $ $ $ $ $ $ $ $ Project #WS09LM #5Replace Large Meter Stations $ 500,000 $ $ $ $ $ $ $ $ $ $ 30

36 Schedule 3 Capital Improvement Plan APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2020 CIP: New T&D/W&P Bldg (design '08/construct '09/'10 $6.644m) [LOAN] $ $ $ $ $ $ $ $ $ $ $ Purchase one ground penetrating radar for new Locator $ $ $ $ 26,000 $ $ $ $ $ $ $ Replace VehiclesT/D & New Vehicles $ $ $ $ $ $ $ $ $ $ $ Purchase Hydrant Maintenance Truck (new) $ $ 35,000 $ $ $ $ $ $ $ $ $ Purchase vehicle for Utility Locator (new) $ $ $ 25,000 $ $ $ $ $ $ $ $ Purchase Backflow Prevention/Cross Connect. Control Truck (new) $ $ $ $ 35,000 $ $ $ $ $ $ $ South Atlantic Ave. replace water main [LOAN] amount CF to 2010? $ $ $ $ $ $ $ $ $ $ $ Indian River Dr. from S.R.520 north to 900 block: replace or line water main (6" unlined $ $ $ 100,000 $ 600,000 $ $ $ $ $ $ $ Replace/Relocate Water MainsIn House budget as OPERATING in '10 ($30k per year $ $ $ $ $ $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 50,000 Install Large Valves in Transmission Mains $ $ 250,000 $ 500,000 $ 250,000 $ 250,000 $ $ $ $ $ $ Purchase GPS Equipment $ $ $ $ 10,000 $ $ $ $ $ $ $ Large Vehicle & Equipment Replacement T&D $ $ $ $ $ $ $ $ $ $ $ Space Coast Gardens SD water distrib. system improvements $ $ 500,000 $ $ $ $ $ $ $ $ $ Backhoe Replacement Program $ $ $ $ $ $ 75,000 $ $ 75,000 $ $ 75,000 $ Purchase Paving Machine $ $ $ $ $ $ $ $ $ $ $ FF&E for new T&D Multiuse Building 2010 $ $ $ $ $ $ $ $ $ $ $ Demolish old T&D, UT Maint., and PW Barn Buildings 2010 $ $ $ $ $ $ $ $ $ $ $ New meters & services & BPA for new customers $ $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ $ $ $ $ $ Replace/Relocate Water MainsBy Contractor $ $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ Fire Hydrant Security combine with 10029; $394/year x 5 years $ $ $ $ $ $ $ $ $ $ $ 4115 Wastewater Collection Division: FY 2010 Budget: Project #WS0903 Upgrade Can Lift Stations and L.S. Buildings $ 250,000 $ $ $ $ $ $ $ $ $ $ Project #WS0904 Systematic Reline/Refurbish/Raplace Gravity $ 250,000 $ $ $ $ $ $ $ $ $ $ Project #WS08UM Radioread Reuse Meters for New Customers $ 20,000 $ $ $ $ $ $ $ $ $ $ Project #WS0833 SR524/Adamson Rd $ $ $ $ $ $ $ $ $ $ $ Project #WS0814 Upgrade Lift Stations $ 220,000 $ $ $ $ $ $ $ $ $ $ Project #WS0815 Relocate L.S. 44 $ $ $ $ $ $ $ $ $ $ $ Project #WS0404 SR520 FM/RM $ $ $ $ $ $ $ $ $ $ $ Surge Protection fo 53 Lift Stations $ 100,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX Replace Lift Station Electrical Panels & Elec. $ 64,500 $ $ $ $ $ $ $ $ $ $ Project #WS0813 Sewer Collection System Interconnects $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WS0901 Standby Generator for Lift Stations $ $ $ $ $ $ $ $ $ $ $ Expand Reuse System as Residents Request It $ $ $ $ $ $ $ $ $ $ $ 31

37 Schedule 3 Capital Improvement Plan APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2020 CIP: U.S.1 between Cidco Rd. and Camp Rd.: FM/RM [SRF] 2018 $ $ $ $ $ $ $ $ 250,000 $ 2,500,000 $ $ SR 524/Adamson Rd RM (LondonAdamson/524Talbot) [SRF] $ $ $ $ $ $ $ $ $ $ $ Purchase two trailermounted generators purchase 2 in '09; was $32 in '11 and $32 in $ $ $ $ $ $ $ $ $ $ $ Lift Station/Force Main Upgrades (#17, 19, 14, 21, 5, 1, 4) $ $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ $ $ $ 250,000 Reuse Distribution System Expansion ('10=Fairfield/Range/Rosetine) $ $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ Refurb/Replace Sewer Mains & Lines $ $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 Standby Generators for lift stations (2/year) through FY2013 $ $ 60,000 $ 60,000 $ 60,000 $ $ $ $ $ $ $ Replace VehiclesWW Collection $ $ $ $ $ $ $ $ $ $ $ Clearlake Rd. (Rosetine Michigan/U.S.1) 20" FM [SRF] $ $ $ 835,000 $ $ $ $ $ $ $ $ Sewer Collection System Interconnects (1013)(3443)(1645) $ $ 200,000 $ 100,000 $ 100,000 $ 100,000 $ $ $ $ $ $ Cox Road Force Main from S.R.524 to S.R.520 [SRF] to '13 by CIP Cte $ $ $ $ 1,120,000 $ $ $ $ $ $ $ Byrd Plaza (US1 to Fiske/Dixon) 12" RW Main [SRF] $ $ $ $ $ $ 283,000 $ $ $ $ $ Cidco Park East (Industry RdUS1) 16"/12" Force Main [SRF] $ $ $ $ $ $ 435,000 $ $ $ $ $ SR520 from Townsend to Fern Meadows & I95 Crossing FM/RM Mains [SRF] $ $ 2,111,000 $ $ $ $ $ $ $ $ $ Michigan Ave. (US1 to Cocoa Lakes Blvd.) 12" RW Main [SRF] $ $ $ $ $ $ 97,000 $ $ $ $ $ SR520 and SR524 east to Friday Rd 8" Force Main [SRF] $ $ $ $ $ $ 1,220,000 $ $ $ $ $ Wilson St. to Clearlake Rd. 16" Force Main [SRF] 2018 $ $ $ $ $ $ $ $ $ 600,000 $ $ SR520/SR524 west to Smith Property 10" Force Main [SRF] 2016 $ $ $ $ $ $ $ 950,000 $ $ $ $ Large Vehicle & Equipment Replacement WW Collection $ $ $ $ $ $ $ $ $ $ $ Radioread reuse meters for new customers req'd by DFD $ $ $ $ $ $ $ $ $ $ $ Replace two trailermounted well point pumps $ $ $ 25,000 $ 25,000 $ $ $ $ $ $ $ Replace asphalt roller $ $ $ 35,000 $ $ $ $ $ $ $ $ 4120 Water Reclamation Division: FY 2010 Budget: Project #WS0811 Corrosivity Control System $ $ $ $ $ $ $ $ $ $ $ Project #WS0806 Increase Plant Discharge Capacity $ $ $ $ $ $ $ $ $ $ $ Project #WS0807 Transfer Pump Control System $ 25,000 $ $ $ $ $ $ $ $ $ $ Project #WS0809 NAOCL Tank Replacement $ $ $ $ $ $ $ $ $ $ $ Project #WS0808 Modify Aeration Blower Control $ 40,000 $ $ $ $ $ $ $ $ $ $ Project #WS0503 Reclaimed Water Aquifer Storage & Recovery Well System $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Increase Effluent Filtration $ 500,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Upgrade Preliminary Treatment Process $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Upgrade WRF Blowers $ 85,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Replace Polymer Feed System $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers BNR Process Evaluation $ 15,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers Operational Data Management System $ 15,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers/Mud Lake Conservation Area Concept Eval $ 15,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers Plant Telemetry Improvments $ 52,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers Plant Surge Protection $ 55,000 $ $ $ $ $ $ $ $ $ $ 32

38 Schedule 3 Capital Improvement Plan APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2020 CIP: Increase Effluent Filtration [CIA/DER Account] $ $ $ $ $ $ $ $ $ $ $ Increase Effluent Filtration [CIA/DER Account] $ $ $ $ $ $ $ $ $ $ $ Modify Effluent Filter Pump & Controls $ $ 30,000 $ $ $ $ $ $ $ $ $ Upgrade WRF SCADA (every 3 years) $ $ 16,000 $ $ $ 17,000 $ $ $ 18,000 $ $ $ 19,000 Replace VehiclesSellers $ $ $ $ $ $ $ $ $ $ $ 25,000 Expand Waste Water Treatment Capacity [Bond] 2015 $ $ $ $ $ $ 13,000,000 $ $ $ $ $ Effluent Disposal Plan Upgrade (engineer in '09, construct in '14) $ $ $ $ $ 300,000 $ $ $ $ $ $ Replace Process Pumps $ $ $ $ 175,000 $ $ $ $ $ $ $ Reuse 2mg G.S.T. incl. land acquisition [Bond] 2015 $ $ $ $ $ $ 1,500,000 $ $ $ $ $ Upgrade Preliminary Treatment Process $ $ 500,000 $ $ $ $ $ $ $ $ $ Construct and Equip 2nd Reclaimed ASR Well on plant site $ $ $ $ 400,000 $ $ $ $ $ $ $ Reclaimed Water Pump Control System do in '09; was $40 in '10 $ $ $ $ $ $ $ $ $ $ $ Upgrade WRF Blowers $ $ $ $ $ $ $ $ $ $ $ Replace polymer feed system $ $ $ $ $ $ $ $ $ $ $ Sellers Admin. Building remodeling $80k operating expense $ $ $ $ $ $ $ $ $ $ $ Major overhall (P/M) of plant clarifiers $ $ $ $ 40,000 $ $ $ $ $ $ $ Replace alum storage tanks (recoat in FY2009) $ $ $ $ $ 30,000 $ $ $ $ $ $ US1 Widening RW Interconnect w/ Rockledge $ 405,000 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for T&D Building funded from Series 2009A Bond $ 6,778,975 $ $ $ $ $ $ $ $ $ $ Capital Projects for Remaining $2.2 Million of Series 2009A Bond Proceeds (1) $ 2,200,000 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for U.S.1 Widening, water portion funded from SRL DW Project #WS0401 HDR sdc $ 38,420 $ $ $ $ $ $ $ $ $ $ Project #WS0401 QLH Loan Administration $ 4,306 $ $ $ $ $ $ $ $ $ $ Project #WS0403 HDR sdc $ 91,373 $ $ $ $ $ $ $ $ $ $ Project #WS0403 QLH Loan Administration $ 640 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for South Mainland 42" New Water Main funded from SRL DW Project #WS0405 CH2M sdc $ 62,336 $ $ $ $ $ $ $ $ $ $ Project #WS0405 Turner Inspection $ 10,020 $ $ $ $ $ $ $ $ $ $ Project #WS0405 GlobeTec Construction $ 486,389 $ $ $ $ $ $ $ $ $ $ Project #WS0405 Nodarse Testing $ 8,882 $ $ $ $ $ $ $ $ $ $ Project #WS0405 QLH Loan Administration $ 4,399 $ $ $ $ $ $ $ $ $ $ Project #WS0405 The Viera Company Contributed Capital (70%) $ 1,324,463 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for U.S.1 Widening, sewer portion funded from SRL WW Project #WS0401 HDR sdc $ 20,688 $ $ $ $ $ $ $ $ $ $ Project #WS0401 QLH Loan Administration $ 2,319 $ $ $ $ $ $ $ $ $ $ Project #WS0403 HDR sdc $ 49,201 $ $ $ $ $ $ $ $ $ $ Project #WS0403 QLH Loan Administration $ 345 $ $ $ $ $ $ $ $ $ $ 33

39 Schedule 3 Capital Improvement Plan APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Remaining Encumb./Expens. for S.R.520 Force Main/Reclaimed Main funded from SRL WW Project #WS0404 QLH sdc $ 11,514 $ $ $ $ $ $ $ $ $ $ Project #WS0404 QLH Loan Administration $ 8,145 $ $ $ $ $ $ $ $ $ $ Project #WS0404 Cathcart Construction $ 212,394 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for S. Atlantic Ave. funded from SRL DW Project #WS0601 HDR sdc $ 56,392 $ $ $ $ $ $ $ $ $ $ Project #WS0601 MASCI Construction (Less Principal Foregiveness) $ 6,393 $ $ $ $ $ $ $ $ $ $ Project #WS0601 QLH Loan Administration $ 23,070 $ $ $ $ $ $ $ $ $ $ Unspecified Future Renewal & Replacement Projects $ $ 1,000,000 $ 3,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 Total CIP Expenditures (2) $ 17,284,165 $ 7,313,000 $ 17,404,000 $ 16,255,000 $ 17,601,000 $ 32,372,000 $ 14,515,000 $ 12,443,000 $ 13,900,000 $ 11,150,000 $ 14,374,000 Compounded Annual Inflation Applied to Budgeted CIP (3) 0.00% 0.00% 3.79% 7.58% 11.37% 15.16% 18.95% 22.74% 26.53% 30.32% 34.11% Projected CIP Adjusted for Compounded Annual Inflation $ 17,284,165 $ 7,313,000 $ 18,063,612 $ 17,487,129 $ 19,602,234 $ 37,279,595 $ 17,265,593 $ 15,272,538 $ 17,587,670 $ 14,530,680 $ 19,276,971 % of Projected CIP Projected to be Executed % % % % % % % % % % % Projected CIP Cost to be Funded $ 17,284,165 $ 7,313,000 $ 18,063,612 $ 17,487,129 $ 19,602,234 $ 37,279,595 $ 17,265,593 $ 15,272,538 $ 17,587,670 $ 14,530,680 $ 19,276,971 Projected CIP Reduction from Budget $ $ $ $ $ $ $ $ $ $ $ (1) A detailed list of capital projects to be funded with the $2.2 million of remaining Series 2009A Bond proceeds is forthcoming and will be integrated into the analysis upon receipt of the information from staff. (2) FY 2010 capital expenditures are per the FY 2010 Budget. Beginning in FY 2011, all capital expenditures are per the CIP as well as dicussions with staff. (3) Compounded annual inflation is based upon the 10year average annual increase in inflation per the Engineering News Record Construction Cost Index (ENRCCI). NOTE: All capital projects in blue highlighting are to be funded with future SRF Loan proceeds as determined by staff. 34

40 Schedule 4 Projection of Cash Inflows APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Inflows Utility System Cash Inflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Rate Revenue Assumptions Water Customer Growth 0.00% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Water Use Growth 4.50% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Sewer Customer Growth 0.00% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Sewer Use Growth 4.50% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Reclaimed Water Customer Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Reclaimed Water Use Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Annual Water Rate Increase 9.00% 8.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Annual Sewer Rate Increase 9.00% 8.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Annual Reclaimed Water Rate Increase 9.00% 8.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Rate Revenue Subject To Growth & Rate Increases Water Sales Fixed Component $ 12,312,878 $ 13,939,264 $ 14,980,361 $ 15,832,804 $ 16,769,238 $ 17,797,742 $ 18,887,174 $ 20,041,054 $ 21,263,105 $ 22,557,257 $ 23,927,668 Water Sales Usage Component $ 23,207,152 $ 25,996,530 $ 27,744,536 $ 29,113,858 $ 30,615,547 $ 32,261,189 $ 33,991,412 $ 35,810,431 $ 37,722,670 $ 39,732,767 $ 41,845,586 Sewer Sales Fixed Component $ 2,757,877 $ 3,118,746 $ 3,344,391 $ 3,523,271 $ 3,715,760 $ 3,922,974 $ 4,141,621 $ 4,372,325 $ 4,615,745 $ 4,872,576 $ 5,143,551 Sewer Sales Usage Component $ 1,299,503 $ 1,454,104 $ 1,548,504 $ 1,619,676 $ 1,695,963 $ 1,777,751 $ 1,863,428 $ 1,953,176 $ 2,047,187 $ 2,145,661 $ 2,248,808 Reclaimed Water Sales Fixed Component $ 132,487 $ 150,464 $ 162,719 $ 173,574 $ 186,060 $ 200,359 $ 215,624 $ 231,914 $ 249,293 $ 267,831 $ 287,600 Reclaimed Water Sales Usage Component $ 130,738 $ 146,918 $ 157,783 $ 167,107 $ 177,848 $ 190,148 $ 203,173 $ 216,961 $ 231,554 $ 246,996 $ 263,332 Total Rate Revenue Subject To Growth & Rate Increases $ 39,840,635 $ 44,806,026 $ 47,938,294 $ 50,430,290 $ 53,160,416 $ 56,150,165 $ 59,302,431 $ 62,625,861 $ 66,129,554 $ 69,823,089 $ 73,716,544 Other Operating Revenue Earned Not Billed $ $ $ $ $ $ $ $ $ $ $ Water Connection Fee $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 Water Hydrant Fees $ 2,000,000 $ 2,160,000 $ 2,268,000 $ 2,381,400 $ 2,500,470 $ 2,625,494 $ 2,756,768 $ 2,894,607 $ 3,039,337 $ 3,191,304 $ 3,350,869 FDOT Easement Payment $ $ $ $ $ $ $ $ $ $ $ Hydrant Resid Flow Test $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Backflow Device Test $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 Jumper Meters $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 Plan Review / Const Inspect $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 Port Access Charge $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 Cross Connection Control $ $ $ $ $ $ $ $ $ $ $ Reuse Water Installation $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 Sewer Connection Fee $ $ $ $ $ $ $ $ $ $ $ 362 Rents and Royalties $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ Sale of Fixed Assets $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25, Sale of Surplus Scrap $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5, Contributions & Donations $ $ $ $ $ $ $ $ $ $ $ 369 Other Misc. Revenues $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 TotalOther Operating Revenue $ 2,504,190 $ 2,664,190 $ 2,772,190 $ 2,885,590 $ 3,004,660 $ 3,129,684 $ 3,260,958 $ 3,398,797 $ 3,543,527 $ 3,695,494 $ 3,855,059 35

41 Schedule 4 Projection of Cash Inflows APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Inflows Utility System Cash Inflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 NonOperating Revenue / Other Sources of Funds Water Impact Fees (1) $ 247,273 $ 596,092 $ 1,046,458 $ 1,395,277 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 Sewer Impact Fees (2) $ 27,051 $ 54,203 $ 81,457 $ 108,609 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 Capital Contributions (3) Recurring Contributed Capital for Connections $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 Rockledge Interconnect $ 405,000 $ $ $ $ $ $ $ $ $ $ South Mainland $ 820,500 $ $ $ $ $ $ $ $ $ $ DER CIA Grant Money $ 1,220,000 $ $ $ $ $ $ $ $ $ $ The Viera Company Barnes Blvd & Fiske $ 759,500 $ $ $ $ $ $ $ $ $ $ The Viera Company 70% of 42" Water Main $ 1,324,463 $ $ $ $ $ $ $ $ $ $ Interest Earned on Invested Funds $ 137,693 $ 106,516 $ 201,635 $ 328,564 $ 493,761 $ 711,214 $ 549,961 $ 555,384 $ 601,164 $ 591,861 $ 662,233 Total NonOperating Revenue / Other Sources of Funds $ 5,076,480 $ 891,811 $ 1,464,550 $ 1,967,450 $ 2,508,618 $ 2,726,071 $ 2,564,818 $ 2,570,241 $ 2,616,022 $ 2,606,719 $ 2,677,091 Total Utility System Cash Inflows $ 47,421,305 $ 48,362,027 $ 52,175,034 $ 55,283,331 $ 58,673,694 $ 62,005,920 $ 65,128,207 $ 68,594,898 $ 72,289,103 $ 76,125,302 $ 80,248,694 (1) The water impact fees assumed in each year of the analysis are presented in the 'Assumptions' Schedule of this Workbook. It is assumed in the analysis that 5% of total new water connections in any year of the projection period will have reclaimed water service available. (2) The sewer impact fees assumed in each year of the analysis are presented in the 'Assumptions' Schedule of this Workbook. (3) Recurring Contributed Capital for Connections are restricted for the operating expenses resulting from new connections to the system. All other Contributed Capital proceeds are reserved for capital improvement projects projected to occur in FY 2010 and are, therefore, transfered out to the Capital Projects Fund upon receipt. 36

42 Schedule 5 Projection of Cash Outflows APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Outflows Utility System Cash Outflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 O&M Personnel Services: 1200 Regular Salaries & Wages $ 6,506,852 $ 6,767,126 $ 7,037,811 $ 7,319,324 $ 7,612,097 $ 7,916,580 $ 8,233,244 $ 8,562,573 $ 8,905,076 $ 9,261,279 $ 9,631, Leave Incentive Sell Back $ $ $ $ $ $ $ $ $ $ $ 1212 Retirement Leave Accruals $ 4,573 $ 4,756 $ 4,946 $ 5,144 $ 5,350 $ 5,564 $ 5,786 $ 6,018 $ 6,258 $ 6,509 $ 6, Other Salaries & Wages $ 113,487 $ 118,026 $ 122,748 $ 127,657 $ 132,764 $ 138,074 $ 143,597 $ 149,341 $ 155,315 $ 161,527 $ 167, Overtime $ 276,000 $ 287,040 $ 298,522 $ 310,462 $ 322,881 $ 335,796 $ 349,228 $ 363,197 $ 377,725 $ 392,834 $ 408, Clothing/Shoe Allowances $ 14,690 $ 15,278 $ 15,889 $ 16,524 $ 17,185 $ 17,873 $ 18,588 $ 19,331 $ 20,104 $ 20,908 $ 21, FICA Taxes $ 508,700 $ 529,048 $ 550,210 $ 572,218 $ 595,107 $ 618,911 $ 643,668 $ 669,414 $ 696,191 $ 724,039 $ 753, Retirement Contributions $ 1,002,063 $ 1,042,146 $ 1,083,831 $ 1,127,185 $ 1,172,272 $ 1,219,163 $ 1,267,929 $ 1,318,647 $ 1,371,392 $ 1,426,248 $ 1,483, Life/Health Insurance $ 1,549,201 $ 1,704,121 $ 1,874,533 $ 2,061,987 $ 2,268,185 $ 2,495,004 $ 2,744,504 $ 3,018,954 $ 3,320,850 $ 3,652,935 $ 4,018, Life/Health Retirees $ $ $ $ $ $ $ $ $ $ $ 2400 Worker's Compensation $ 317,369 $ 330,064 $ 343,266 $ 356,997 $ 371,277 $ 386,128 $ 401,573 $ 417,636 $ 434,341 $ 451,715 $ 469, Unemployment Compensation $ 15,000 $ 15,600 $ 16,224 $ 16,873 $ 17,548 $ 18,250 $ 18,980 $ 19,739 $ 20,529 $ 21,350 $ 22, Cafeteria Plan $ 114,000 $ 118,560 $ 123,302 $ 128,234 $ 133,364 $ 138,698 $ 144,246 $ 150,016 $ 156,017 $ 162,258 $ 168,748 Total Personnel Services Projected From Budget $ 10,421,935 $ 10,931,764 $ 11,471,282 $ 12,042,606 $ 12,648,029 $ 13,290,041 $ 13,971,343 $ 14,694,867 $ 15,463,799 $ 16,281,602 $ 17,152,042 % of Budgeted O&M Projected to be Executed 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% Projected O&M Cost to be Funded $ 10,005,058 $ 10,494,494 $ 11,012,431 $ 11,560,901 $ 12,142,108 $ 12,758,440 $ 13,412,489 $ 14,107,072 $ 14,845,247 $ 15,630,338 $ 16,465,961 Projected O&M Reduction from Budget $ 416,877 $ 437,271 $ 458,851 $ 481,704 $ 505,921 $ 531,602 $ 558,854 $ 587,795 $ 618,552 $ 651,264 $ 686,082 O&M Operating Expenses: 3100 Professional Services $ 212,670 $ 219,050 $ 225,622 $ 232,390 $ 239,362 $ 246,543 $ 253,939 $ 261,557 $ 269,404 $ 277,486 $ 285, Legal Expenses $ 75,000 $ 77,250 $ 79,568 $ 81,955 $ 84,413 $ 86,946 $ 89,554 $ 92,241 $ 95,008 $ 97,858 $ 100, Medical Services $ 360 $ 369 $ 378 $ 388 $ 397 $ 407 $ 417 $ 428 $ 439 $ 450 $ Engineering Services $ 300,000 $ 309,000 $ 318,270 $ 327,818 $ 337,653 $ 347,782 $ 358,216 $ 368,962 $ 380,031 $ 391,432 $ 403, Accounting & Auditing $ 39,700 $ 40,693 $ 41,710 $ 42,753 $ 43,821 $ 44,917 $ 46,040 $ 47,191 $ 48,371 $ 49,580 $ 50, Contract Services $ 823,984 $ 848,704 $ 874,165 $ 900,390 $ 927,401 $ 955,223 $ 983,880 $ 1,013,396 $ 1,043,798 $ 1,075,112 $ 1,107, Allocations General Fund $ 8,770,010 $ 9,033,110 $ 9,304,104 $ 9,583,227 $ 9,870,724 $ 10,166,845 $ 10,471,851 $ 10,786,006 $ 11,109,586 $ 11,442,874 $ 11,786, Contingency $ 508,284 $ 520,991 $ 534,016 $ 547,366 $ 561,050 $ 575,077 $ 589,454 $ 604,190 $ 619,295 $ 634,777 $ 650, Travel & Per Diem $ 21,500 $ 22,038 $ 22,588 $ 23,153 $ 23,732 $ 24,325 $ 24,933 $ 25,557 $ 26,196 $ 26,851 $ 27, Communication $ 62,500 $ 64,063 $ 65,664 $ 67,306 $ 68,988 $ 70,713 $ 72,481 $ 74,293 $ 76,150 $ 78,054 $ 80, Postage & Freight $ 18,800 $ 19,270 $ 19,752 $ 20,246 $ 20,752 $ 21,270 $ 21,802 $ 22,347 $ 22,906 $ 23,479 $ 24, Electric/Water/Sewer Service $ 2,329,180 $ 2,562,098 $ 2,818,308 $ 3,100,139 $ 3,410,152 $ 3,751,168 $ 4,126,284 $ 4,538,913 $ 4,992,804 $ 5,492,085 $ 6,041, Rentals & Leases $ 236,614 $ 243,712 $ 251,024 $ 258,555 $ 266,311 $ 274,300 $ 282,529 $ 291,005 $ 299,736 $ 308,728 $ 317, Insurance $ 407,178 $ 419,393 $ 431,975 $ 444,934 $ 458,282 $ 472,031 $ 486,192 $ 500,778 $ 515,801 $ 531,275 $ 547, Repairs & Maintenance $ 3,539,276 $ 3,645,454 $ 3,754,818 $ 3,867,462 $ 3,983,486 $ 4,102,991 $ 4,226,081 $ 4,352,863 $ 4,483,449 $ 4,617,952 $ 4,756, Printing & Binding $ 10,000 $ 10,250 $ 10,506 $ 10,769 $ 11,038 $ 11,314 $ 11,597 $ 11,887 $ 12,184 $ 12,489 $ 12, Promotional Activities $ 15,250 $ 15,631 $ 16,022 $ 16,423 $ 16,833 $ 17,254 $ 17,685 $ 18,127 $ 18,581 $ 19,045 $ 19, Other Charges & Oblig. $ 125,975 $ 129,124 $ 132,352 $ 135,661 $ 139,053 $ 142,529 $ 146,092 $ 149,745 $ 153,488 $ 157,326 $ 161, Bad Debt Expense $ 100,000 $ 113,000 $ 123,735 $ 129,922 $ 136,418 $ 143,239 $ 150,401 $ 157,921 $ 165,817 $ 174,108 $ 182, Cash Over & Under $ $ $ $ $ $ $ $ $ $ $ 4909 Document Recording Chgs $ 2,000 $ 2,050 $ 2,101 $ 2,154 $ 2,208 $ 2,263 $ 2,319 $ 2,377 $ 2,437 $ 2,498 $ 2, Operating Supplies $ 4,326,501 $ 4,542,826 $ 4,769,967 $ 5,008,466 $ 5,258,889 $ 5,521,833 $ 5,797,925 $ 6,087,821 $ 6,392,212 $ 6,711,823 $ 7,047, Road Materials/Supplies $ 45,840 $ 46,986 $ 48,161 $ 49,365 $ 50,599 $ 51,864 $ 53,160 $ 54,489 $ 55,852 $ 57,248 $ 58, Books/Membership/Traning $ 29,132 $ 29,860 $ 30,607 $ 31,372 $ 32,156 $ 32,960 $ 33,784 $ 34,629 $ 35,495 $ 36,382 $ 37, Training $ 40,750 $ 41,769 $ 42,813 $ 43,883 $ 44,980 $ 46,105 $ 47,258 $ 48,439 $ 49,650 $ 50,891 $ 52,163 Total Operating Expenses Projected From Budget $ 22,040,504 $ 22,956,691 $ 23,918,225 $ 24,926,094 $ 25,988,700 $ 27,109,900 $ 28,293,875 $ 29,545,163 $ 30,868,688 $ 32,269,800 $ 33,754,313 % of Budgeted O&M Projected to be Executed 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Projected O&M Cost to be Funded $ 20,938,479 $ 21,808,857 $ 22,722,314 $ 23,679,789 $ 24,689,265 $ 25,754,405 $ 26,879,181 $ 28,067,904 $ 29,325,253 $ 30,656,310 $ 32,066,597 Projected O&M Reduction from Budget $ 1,102,025 $ 1,147,835 $ 1,195,911 $ 1,246,305 $ 1,299,435 $ 1,355,495 $ 1,414,694 $ 1,477,258 $ 1,543,434 $ 1,613,490 $ 1,687,716 37

43 Schedule 5 Projection of Cash Outflows APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Outflows Utility System Cash Outflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Minor Capital Outlay: Machinery & Equipment $ 521,888 $ 750,000 $ 772,500 $ 795,675 $ 819,545 $ 844,132 $ 869,456 $ 895,539 $ 922,405 $ 950,078 $ 978,580 Total Minor Capital Outlay $ 521,888 $ 750,000 $ 772,500 $ 795,675 $ 819,545 $ 844,132 $ 869,456 $ 895,539 $ 922,405 $ 950,078 $ 978,580 Other Below the Line Expenses: Capital Lease Generators $ 181,444 $ 181,444 $ $ $ $ $ $ $ $ $ Total Other Below the Line Expenses $ 181,444 $ 181,444 $ $ $ $ $ $ $ $ $ Transfers Out: PaymentInLieuOfFranchise Fee (1) $ 684,077 $ 910,012 $ 1,018,544 $ 1,084,511 $ 1,160,022 $ 1,246,020 $ 1,336,303 $ 1,430,981 $ 1,530,155 $ 1,633,916 $ 1,742,343 Transfer to General Account of Surplus Fund (2) $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 Transfer to Capital Projects Fund (2) $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 General Fund Capital Projects 301 $ 2,278,000 $ $ $ $ $ $ $ $ $ $ Tranfer Out to Restricted Assets 425 $ 126,200 $ 130,617 $ 135,189 $ 139,920 $ 144,817 $ 149,886 $ 155,132 $ 160,562 $ 166,181 $ 171,998 $ 178,018 Total Transfers Out $ 10,288,277 $ 8,240,629 $ 8,353,733 $ 8,424,432 $ 8,504,840 $ 8,595,906 $ 8,691,435 $ 8,791,542 $ 8,896,336 $ 9,005,914 $ 9,120,360 Bond/Debt Service Expenses: Existing Senior Lien Debt (Principal & Interest): Series 1999 Bonds $ 360,938 $ 360,938 $ 360,938 $ 1,365,938 $ 1,363,175 $ 1,367,788 $ 1,364,250 $ 1,362,825 $ 1,368,250 $ $ Series 2003 Bonds $ 799,700 $ 799,700 $ 799,700 $ 1,889,700 $ 1,886,550 $ 1,887,488 $ 1,890,275 $ 1,886,525 $ 1,888,925 $ 1,888,575 $ 1,889,100 Series 2009A Bonds $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 Series 2009B Bonds $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 2,085,750 $ 2,079,688 Series 2009C Bonds $ 2,377,613 $ 2,378,213 $ 2,381,063 $ $ $ $ $ $ $ $ Cumulative New Senior Lien Debt for Additional Borrowings $ $ $ 509,644 $ 1,476,451 $ 2,486,583 $ 4,111,541 $ 5,623,339 $ 6,433,248 $ 7,079,866 $ 7,629,260 $ 8,229,445 Existing SRF Loan Debt (Principal & Interest): SRL $ 360,782 $ 360,782 $ 360,783 $ 360,782 $ 360,782 $ 360,782 $ 360,783 $ 360,782 $ 360,782 $ 360,783 $ 360,782 SRL $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 SRL $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 SRL 202P $ 195,334 $ 195,335 $ 195,334 $ 195,334 $ 195,335 $ 195,334 $ 195,334 $ 195,334 $ 195,334 $ 195,334 $ 195,334 SRL $ $ 110,416 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 SRL DW $ 218,808 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 SRL WW $ $ 223,163 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 SRL DW $ $ 3,962 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 Cumulative New SRF Loan Debt for Additional Borrowings $ $ $ 149,736 $ 211,208 $ 296,673 $ 296,673 $ 632,803 $ 712,957 $ 734,723 $ 1,012,945 $ 1,038,365 SunTrust Letter of Credit (Principal & Interest): Suntrust Letter of Credit Draw #1 $ 150,450 $ 151,775 $ 152,950 $ 149,050 $ 150,075 $ 150,950 $ 36,803 $ $ $ $ Suntrust Letter of Credit Draw #2 $ $ $ $ $ $ $ $ $ $ $ Suntrust Letter of Credit Draw #3 $ 68,280 $ 67,660 $ 68,010 $ 67,300 $ 67,560 $ 67,760 $ 67,900 $ 67,980 $ $ $ Suntrust Letter of Credit Draw #4 $ 87,725 $ 83,875 $ 84,850 $ 80,650 $ 81,275 $ 76,725 $ 72,175 $ 72,450 $ $ $ Suntrust Letter of Credit Draw #5 $ 52,794 $ 55,194 $ 52,394 $ 49,594 $ 51,594 $ 48,394 $ 45,194 $ 46,727 $ $ $ Total Bond/Debt Service Expenses $ 6,668,415 $ 7,224,619 $ 8,224,090 $ 8,954,695 $ 10,048,291 $ 11,672,123 $ 13,397,546 $ 14,247,518 $ 14,736,569 $ 15,690,587 $ 16,310,654 Total Utility System Cash Outflows from Budget $ 50,122,462 $ 50,285,147 $ 52,739,830 $ 55,143,501 $ 58,009,405 $ 61,512,102 $ 65,223,655 $ 68,174,630 $ 70,887,798 $ 74,197,980 $ 77,315,949 Projected O&M Reduction from Budget $ (1,518,903) $ (1,585,105) $ (1,654,763) $ (1,728,009) $ (1,805,356) $ (1,887,097) $ (1,973,547) $ (2,065,053) $ (2,161,986) $ (2,264,754) $ (2,373,797) Projected Annual Cash Outflow $ 48,603,560 $ 48,700,042 $ 51,085,068 $ 53,415,492 $ 56,204,048 $ 59,625,005 $ 63,250,108 $ 66,109,577 $ 68,725,811 $ 71,933,226 $ 74,942,152 (1) Annual PaymentInLieuOfFranchise Fee transfers out are calculated as 6% of Net Operating Income. (2) Per discussions with staff, it is assumed in the analysis that $7.2 million of Net Operating Income will be transferred out annually to the General Fund ($3.6 million) and to the Capital Project Fund ($3.6 million). 38

44 Schedule 6 FAMSXL Control Panel CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary 2010 FAMS XL Control Panel APPENDIX A 39

45 Schedule 7 Pro Forma APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Forecast of Net Revenues and Debt Service Coverage FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Revenue Subject to Rate Increases Water, Sewer & Reclaimed Water Rate Revenue $ 39,279,167 $ 39,840,635 $ 44,806,026 $ 47,938,294 $ 50,430,290 $ 53,160,416 $ 56,150,165 $ 59,302,431 $ 62,625,861 $ 66,129,554 $ 69,823,089 Additional Rate Revenue From Partial Prior Year Rate Increase (1) $ $ 2,644,080 $ 858,491 $ $ $ $ $ $ $ $ Additional Rate Revenue from Growth $ $ 89,886 $ 192,789 $ 302,274 $ 421,283 $ 550,457 $ 575,398 $ 601,476 $ 628,743 $ 657,255 $ 687,068 Proposed Water and Sewer Rate Increases (1) 2.27% 5.98% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Water and Sewer Rate Revenue from Rate Increase (1) $ 891,045 $ 2,547,477 $ 2,292,865 $ 2,412,028 $ 2,542,579 $ 2,685,544 $ 2,836,278 $ 2,995,195 $ 3,162,730 $ 3,339,340 $ 3,525,508 Price Elasticity Adjustment $ (329,578) $ (316,052) $ (211,876) $ (222,307) $ (233,736) $ (246,252) $ (259,410) $ (273,241) $ (287,780) $ (303,061) $ (319,120) Total Rate Revenue Subject to Growth & Rate Increase $ 39,840,635 $ 44,806,026 $ 47,938,294 $ 50,430,290 $ 53,160,416 $ 56,150,165 $ 59,302,431 $ 62,625,861 $ 66,129,554 $ 69,823,089 $ 73,716,544 Plus: Other Operating Revenue (2) $ 2,504,190 $ 2,664,190 $ 2,772,190 $ 2,885,590 $ 3,004,660 $ 3,129,684 $ 3,260,958 $ 3,398,797 $ 3,543,527 $ 3,695,494 $ 3,855,059 Total Operating Revenue $ 42,344,825 $ 47,470,216 $ 50,710,484 $ 53,315,880 $ 56,165,076 $ 59,279,848 $ 62,563,389 $ 66,024,657 $ 69,673,081 $ 73,518,583 $ 77,571,603 Less: Personnel Services $ (10,005,058) $ (10,494,494) $ (11,012,431) $ (11,560,901) $ (12,142,108) $ (12,758,440) $ (13,412,489) $ (14,107,072) $ (14,845,247) $ (15,630,338) $ (16,465,961) Less: O&M Expenses $ (20,938,479) $ (21,808,857) $ (22,722,314) $ (23,679,789) $ (24,689,265) $ (25,754,405) $ (26,879,181) $ (28,067,904) $ (29,325,253) $ (30,656,310) $ (32,066,597) Net Operating Income $ 11,401,288 $ 15,166,866 $ 16,975,740 $ 18,075,190 $ 19,333,703 $ 20,767,004 $ 22,271,718 $ 23,849,680 $ 25,502,581 $ 27,231,935 $ 29,039,045 Plus: Non Operating Income (Expense) Interest Earned On Fund Balances $ 137,693 $ 106,516 $ 201,635 $ 328,564 $ 493,761 $ 711,214 $ 549,961 $ 555,384 $ 601,164 $ 591,861 $ 662,233 Recurring Contributed Capital for Connections $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 Water Impact Fees $ 247,273 $ 596,092 $ 1,046,458 $ 1,395,277 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 Sewer Impact Fees $ 27,051 $ 54,203 $ 81,457 $ 108,609 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 Total Non Operating Income $ 547,017 $ 891,811 $ 1,464,550 $ 1,967,450 $ 2,508,618 $ 2,726,071 $ 2,564,818 $ 2,570,241 $ 2,616,022 $ 2,606,719 $ 2,677,091 Net Income $ 11,948,305 $ 16,058,677 $ 18,440,289 $ 20,042,640 $ 21,842,321 $ 23,493,075 $ 24,836,536 $ 26,419,921 $ 28,118,603 $ 29,838,654 $ 31,716,136 Less: Water Impact Fees $ (247,273) $ (596,092) $ (1,046,458) $ (1,395,277) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) Less: Sewer Impact Fees $ (27,051) $ (54,203) $ (81,457) $ (108,609) $ (135,761) $ (135,761) $ (135,761) $ (135,761) $ (135,761) $ (135,761) $ (135,761) Net Income Available for Debt Service $ 11,673,981 $ 15,408,381 $ 17,312,375 $ 18,538,754 $ 19,962,464 $ 21,613,218 $ 22,956,679 $ 24,540,064 $ 26,238,745 $ 27,958,796 $ 29,836,278 Senior Lien Debt Service Coverage Existing Senior Lien Debt $ 4,569,969 $ 4,570,569 $ 4,573,419 $ 4,287,356 $ 4,281,444 $ 4,286,994 $ 4,286,244 $ 4,281,069 $ 4,288,894 $ 4,415,294 $ 4,409,756 Cumulative New Senior Lien Debt for Additional Borrowings $ $ $ 509,644 $ 1,476,451 $ 2,486,583 $ 4,111,541 $ 5,623,339 $ 6,433,248 $ 7,079,866 $ 7,629,260 $ 8,229,445 Total Senior Lien Debt Service $ 4,569,969 $ 4,570,569 $ 5,083,063 $ 5,763,807 $ 6,768,027 $ 8,398,534 $ 9,909,583 $ 10,714,317 $ 11,368,760 $ 12,044,554 $ 12,639,201 Required Planning Senior Lien Debt Service Coverage: Test 1 (Net Revenues Only) Senior Lien Debt Service Coverage: Test 2 (Net Rev + Impact Fees) SRF Loan Debt Service Coverage Existing SRF Loan Debt $ 1,739,197 $ 2,295,546 $ 2,633,088 $ 2,633,087 $ 2,633,087 $ 2,633,087 $ 2,633,088 $ 2,633,087 $ 2,633,087 $ 2,633,088 $ 2,633,087 Cumulative New SRF Loan Debt for Additional Borrowings $ $ $ 149,736 $ 211,208 $ 296,673 $ 296,673 $ 632,803 $ 712,957 $ 734,723 $ 1,012,945 $ 1,038,365 Total SRF Loan Debt Service $ 1,739,197 $ 2,295,546 $ 2,782,823 $ 2,844,294 $ 2,929,760 $ 2,929,760 $ 3,265,891 $ 3,346,044 $ 3,367,810 $ 3,646,033 $ 3,671,452 Required Planning SRF Loan Debt Service Coverage (3)

46 Schedule 7 Pro Forma APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Forecast of Net Revenues and Debt Service Coverage FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Net Income Available for Debt Service $ 11,673,981 $ 15,408,381 $ 17,312,375 $ 18,538,754 $ 19,962,464 $ 21,613,218 $ 22,956,679 $ 24,540,064 $ 26,238,745 $ 27,958,796 $ 29,836,278 Less: Total Senior Lien Debt Service $ (4,569,969) $ (4,570,569) $ (5,083,063) $ (5,763,807) $ (6,768,027) $ (8,398,534) $ (9,909,583) $ (10,714,317) $ (11,368,760) $ (12,044,554) $ (12,639,201) Less: Total SRF Loan Debt Service $ (1,739,197) $ (2,295,546) $ (2,782,823) $ (2,844,294) $ (2,929,760) $ (2,929,760) $ (3,265,891) $ (3,346,044) $ (3,367,810) $ (3,646,033) $ (3,671,452) Plus: Payment of Debt Service with Water Impact Fees $ 247,273 $ 596,092 $ 1,046,458 $ 1,395,277 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 Plus: Payment of Debt Service with Sewer Impact Fees $ 27,051 $ 54,203 $ 81,457 $ 108,609 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 Less: Transfers Out PaymentinlieuofFranchise Fee $ (684,077) $ (910,012) $ (1,018,544) $ (1,084,511) $ (1,160,022) $ (1,246,020) $ (1,336,303) $ (1,430,981) $ (1,530,155) $ (1,633,916) $ (1,742,343) Transfer to General Account of Surplus Fund $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) Transfer to Capital Projects Fund $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) General Fund Capital Projects 301 $ (2,278,000) $ $ $ $ $ $ $ $ $ $ Tranfer Out to Restricted Assets 425 $ (126,200) $ (130,617) $ (135,189) $ (139,920) $ (144,817) $ (149,886) $ (155,132) $ (160,562) $ (166,181) $ (171,998) $ (178,018) Less: Other Below the Coverage Line Expenses Total SunTrust Letter of Credit $ (359,249) $ (358,504) $ (358,204) $ (346,594) $ (350,504) $ (343,829) $ (222,072) $ (187,157) $ $ $ Capital Lease Generators $ (181,444) $ (181,444) $ $ $ $ $ $ $ $ $ Less: Capital Outlay $ (521,888) $ (750,000) $ (772,500) $ (795,675) $ (819,545) $ (844,132) $ (869,456) $ (895,539) $ (922,405) $ (950,078) $ (978,580) Less: Transfer to Renewal & Replacement Fund $ $ $ $ $ $ $ $ $ $ $ Net Cash Flow $ (5,711,718) $ (338,015) $ 1,089,966 $ 1,867,838 $ 2,469,646 $ 2,380,914 $ 1,878,099 $ 2,485,321 $ 3,563,292 $ 4,192,075 $ 5,306,542 Unrestricted Reserve Fund Beginning of Year Balance $ 13,354,598 $ 7,622,725 $ 6,685,765 $ 7,775,732 $ 8,810,173 $ 9,207,843 $ 9,628,211 $ 10,072,918 $ 10,543,744 $ 11,042,625 $ 11,571,662 Plus: Cash Flow Surplus $ (93,004) $ (338,015) $ 1,089,966 $ 1,867,838 $ 2,469,646 $ 2,380,914 $ 1,878,099 $ 2,485,321 $ 3,563,292 $ 4,192,075 $ 5,306,542 Less: Reserve Fund Balance used for Cash Flow $ (5,618,714) $ $ $ $ $ $ $ $ $ $ Less: Projects Designated to be Paid with Cash $ $ $ $ $ $ $ $ $ $ $ Less: Projects Paid with Reserve Funds (Non Specified Funding) $ (20,154) $ (598,945) $ $ (833,397) $ (2,071,975) $ (1,960,546) $ (1,433,393) $ (2,014,495) $ (3,064,411) $ (3,663,039) $ (4,745,064) Unrestricted Reserve Fund End of Year Balance $ 7,622,725 $ 6,685,765 $ 7,775,732 $ 8,810,173 $ 9,207,843 $ 9,628,211 $ 10,072,918 $ 10,543,744 $ 11,042,625 $ 11,571,662 $ 12,133,139 Minimum Working Capital Reserve Target 3.00 Mos O&M $ 7,735,884 $ 8,075,838 $ 8,433,686 $ 8,810,173 $ 9,207,843 $ 9,628,211 $ 10,072,918 $ 10,543,744 $ 11,042,625 $ 11,571,662 $ 12,133,139 Excess (Deficiency) of Working Capital Reserves to Target $ (113,159) $ (1,390,072) $ (657,955) $ $ $ $ $ $ $ $ (1) The analysis assumes a FY 2010 rate structure adjustment effective July 1, 2010; while, the effective date for the FY 2011 rate increases is January 1, (2) Other Operating Revenues include such revenues as Water Connection Fees, Water Hydrant Fees, Backflow Devise Test Revenues, Other Miscellaneous Revenues, etc (3) Some SRF Loan Agreements require debt service coverage of at least 1.15 times net income available for SRF debt service, while others require coverage of at least 1.20 times net income available for SRF debt service. For additional conservatism, the analysis assumes a coverage requirement of at least 1.20 on all SRF debt. 41

47 Schedule 8 Capital Projects Funding Sources APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary CIP Funding Sources Sources FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Water Impact Fees $ $ $ $ $ $ $ $ $ $ $ Sewer Impact Fees $ $ $ $ $ $ $ $ $ $ $ Series 2009A Bond Proceeds $ 8,978,975 $ $ $ $ $ $ $ $ $ $ Existing SRF Loan Proceeds $ 1,054,003 $ 0 $ $ $ $ $ $ $ $ $ Capital Projects Fund $ 7,207,963 $ 4,523,804 $ 3,603,464 $ 3,600,017 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 Renewal & Replacement $ 23,070 $ 79,251 $ 20,922 $ 27,605 $ 41,457 $ 55,415 $ 55,554 $ 55,556 $ 55,556 $ 55,556 $ 55,556 Revenue Fund $ 20,154 $ 598,945 $ $ 833,397 $ 2,071,975 $ 1,960,546 $ 1,433,393 $ 2,014,495 $ 3,064,411 $ 3,663,039 $ 4,745,064 Senior Lien Debt Proceeds $ $ $ 13,572,579 $ 11,821,214 $ 13,888,801 $ 26,924,800 $ 11,046,621 $ 9,295,638 $ 6,945,274 $ 6,853,706 $ 8,220,973 SRF Loan Proceeds $ $ 2,111,000 $ 866,647 $ 1,204,896 $ $ 4,738,834 $ 1,130,025 $ 306,850 $ 3,922,430 $ 358,380 $ 2,655,378 Projects Designated To Be Paid With Cash $ $ $ $ $ $ $ $ $ $ $ Total Projects Paid $ 17,284,165 $ 7,313,000 $ 18,063,612 $ 17,487,129 $ 19,602,234 $ 37,279,595 $ 17,265,593 $ 15,272,538 $ 17,587,670 $ 14,530,680 $ 19,276,971 Total CIP $ 17,284,165 $ 7,313,000 $ 18,063,612 $ 17,487,129 $ 19,602,234 $ 37,279,595 $ 17,265,593 $ 15,272,538 $ 17,587,670 $ 14,530,680 $ 19,276,971 Variance $ $ $ $ $ $ $ $ $ $ $ 42

48 Schedule 9 Projection of LongTerm Borrowing APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Revenue Bond Borrowing Projections Revenue Bond Borrowing Projections FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Term Interest 5.00% 5.25% 5.50% 5.75% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Sources of Funds Par Amount $ $ $ 14,814,078 $ 12,929,480 $ 15,223,088 $ 29,511,446 $ 12,107,861 $ 10,188,663 $ 7,612,501 $ 7,512,136 $ 9,010,756 Interest During Construction $ $ $ $ $ $ $ $ $ $ $ Total Sources of Funds $ $ $ 14,814,078 $ 12,929,480 $ 15,223,088 $ 29,511,446 $ 12,107,861 $ 10,188,663 $ 7,612,501 $ 7,512,136 $ 9,010,756 Uses of Funds Current Year Project Proceeds $ $ $ 13,572,579 $ 11,821,214 $ 13,888,801 $ 26,924,800 $ 11,046,621 $ 9,295,638 $ 6,945,274 $ 6,853,706 $ 8,220,973 Cost of Issuance 1.50% of Par $ $ $ 222,211 $ 193,942 $ 228,346 $ 442,672 $ 181,618 $ 152,830 $ 114,188 $ 112,682 $ 135,161 Underwriter's Discount $0.00 per $1,000 $ $ $ $ $ $ $ $ $ $ $ Bond Insurance 0 times total Debt Service $ $ $ $ $ $ $ $ $ $ $ Capitalized Interest 0 Years Interest $ $ $ $ $ $ $ $ $ $ $ Debt Service Surety 0.00% of Debt Service $ $ $ $ $ $ $ $ $ $ $ Debt Service Reserve 1 Years of Debt Service $ $ $ 1,019,288 $ 914,324 $ 1,105,941 $ 2,143,974 $ 879,623 $ 740,195 $ 553,040 $ 545,749 $ 654,622 Other Costs $ $ $ $ $ $ $ $ $ $ $ Total Uses of Funds $ $ $ 14,814,078 $ 12,929,480 $ 15,223,088 $ 29,511,446 $ 12,107,861 $ 10,188,663 $ 7,612,501 $ 7,512,136 $ 9,010,756 1 Year Interest $ $ $ 814,774 $ 743,445 $ 913,385 $ 1,770,687 $ 726,472 $ 611,320 $ 456,750 $ 450,728 $ 540,645 Annual Debt Service $ $ $ 1,019,288 $ 914,324 $ 1,105,941 $ 2,143,974 $ 879,623 $ 740,195 $ 553,040 $ 545,749 $ 654,622 Total Debt Service $ $ $ 30,578,652 $ 27,429,726 $ 33,178,223 $ 64,319,233 $ 26,388,688 $ 22,205,858 $ 16,591,197 $ 16,372,455 $ 19,638,648 Annual Cumulative Debt Service (1) $ $ $ 509,644 $ 1,476,451 $ 2,486,583 $ 4,111,541 $ 5,623,339 $ 6,433,248 $ 7,079,866 $ 7,629,260 $ 8,229,445 (1) It is assumed in the analysis that revenue bonds will be issued midyear. Therefore, 6months of principal and interest debt service payment are assumed in the year in which revenue bonds are issued, while full payments are assumed each year thereafter. 43

49 Schedule 10 Projection of SRF Borrowing APPENDIX A SRF Loan Borrowing Projections FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Term Interest 2.75% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sources of Funds Par Amount $ $ 2,227,688 $ 914,552 $ 1,271,498 $ $ 5,000,780 $ 1,192,489 $ 323,812 $ 4,139,248 $ 378,190 $ 2,802,158 Interest During Construction $ $ $ $ $ $ $ $ $ $ $ Total Sources of Funds $ $ 2,227,688 $ 914,552 $ 1,271,498 $ $ 5,000,780 $ 1,192,489 $ 323,812 $ 4,139,248 $ 378,190 $ 2,802,158 Uses of Funds Current Year Project Proceeds $ $ 2,111,000 $ 866,647 $ 1,204,896 $ $ 4,738,834 $ 1,130,025 $ 306,850 $ 3,922,430 $ 358,380 $ 2,655,378 Cost of Issuance 0.50% of Par $ $ 11,138 $ 4,573 $ 6,357 $ $ 25,004 $ 5,962 $ 1,619 $ 20,696 $ 1,891 $ 14,011 Loan Repayment Res. 3.00% of Capital Cost $ $ 63,330 $ 25,999 $ 36,147 $ $ 142,165 $ 33,901 $ 9,206 $ 117,673 $ 10,751 $ 79,661 Loan Service Fee 2.00% of Capital Cost $ $ 42,220 $ 17,333 $ 24,098 $ $ 94,777 $ 22,601 $ 6,137 $ 78,449 $ 7,168 $ 53,108 Capitalized Interest 0 Years Interest $ $ $ $ $ $ $ $ $ $ $ Debt Service Reserve 0 Years of Debt Service $ $ $ $ $ $ $ $ $ $ $ Other Costs $ $ $ $ $ $ $ $ $ $ $ Total Uses of Funds $ $ 2,227,688 $ 914,552 $ 1,271,498 $ $ 5,000,780 $ 1,192,489 $ 323,812 $ 4,139,248 $ 378,190 $ 2,802,158 1 Year Interest $ $ 66,831 $ 27,437 $ 38,145 $ $ 150,023 $ 35,775 $ 9,714 $ 124,177 $ 11,346 $ 84,065 Annual Debt Service $ $ 149,736 $ 61,472 $ 85,465 $ $ 336,131 $ 80,154 $ 21,765 $ 278,222 $ 25,420 $ 188,349 Total Debt Service $ $ 2,994,713 $ 1,229,445 $ 1,709,293 $ $ 6,722,619 $ 1,603,079 $ 435,304 $ 5,564,449 $ 508,406 $ 3,766,980 Annual Cumulative Debt Service (1) $ $ $ 149,736 $ 211,208 $ 296,673 $ 296,673 $ 632,803 $ 712,957 $ 734,723 $ 1,012,945 $ 1,038,365 (1) It is assumed in the analysis that annual SRF Loan debt service payments will begin 1year after receipt of loan proceeds. CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary SRF Loan Borrowing Projections 44

50 Schedule 11 Funding Summary by Fund APPENDIX A Water & Sewer Utility System Financial Management Program Summary CITY OF COCOA, FLORIDA Funding Summary By Fund FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Water Impact Fees Beginning Balance $ $ $ $ $ $ $ $ $ $ $ Net Additional Funds $ 247,273 $ 596,092 $ 1,046,458 $ 1,395,277 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 $ 1,744,096 Less: Payment of Debt Service (1) $ (247,273) $ (596,092) $ (1,046,458) $ (1,395,277) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) $ (1,744,096) Subtotal $ $ $ $ $ $ $ $ $ $ $ Less: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Amount Available for Projects $ $ $ $ $ $ $ $ $ $ $ Amount Paid for Projects $ $ $ $ $ $ $ $ $ $ $ Subtotal $ $ $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ $ $ $ $ $ $ $ $ $ $ Less: Interest to Cash Flow $ $ $ $ $ $ $ $ $ $ $ Ending Balance $ $ $ $ $ $ $ $ $ $ $ Sewer Impact Fees Beginning Balance $ $ $ $ $ $ $ $ $ $ $ Net Additional Funds $ 27,051 $ 54,203 $ 81,457 $ 108,609 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 $ 135,761 Less: Payment of Debt Service (1) $ (27,051) $ (54,203) $ (81,457) $ (108,609) $ (135,761) $ (135,761) $ (135,761) $ (135,761) $ (135,761) $ (135,761) $ (135,761) Subtotal $ $ $ $ $ $ $ $ $ $ $ Less: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Amount Available for Projects $ $ $ $ $ $ $ $ $ $ $ Amount Paid for Projects $ $ $ $ $ $ $ $ $ $ $ Subtotal $ $ $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ $ $ $ $ $ $ $ $ $ $ Less: Interest to Cash Flow $ $ $ $ $ $ $ $ $ $ $ Ending Balance $ $ $ $ $ $ $ $ $ $ $ Series 2009A Revenue Bond Proceeds Beginning Balance $ 8,978,975 $ $ $ $ $ $ $ $ $ $ Net Additional Funds $ $ $ $ $ $ $ $ $ $ $ Subtotal $ 8,978,975 $ $ $ $ $ $ $ $ $ $ Less: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Amount Available for Projects $ 8,978,975 $ $ $ $ $ $ $ $ $ $ Amount Paid for Projects $ (8,978,975) $ $ $ $ $ $ $ $ $ $ Subtotal $ $ $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ 22,447 $ $ $ $ $ $ $ $ $ $ Less: Interest to Cash Flow $ (22,447) $ $ $ $ $ $ $ $ $ $ Ending Balance $ $ $ $ $ $ $ $ $ $ $ 45

51 Schedule 11 Funding Summary by Fund APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Funding Summary By Fund FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Existing SRF Loan Proceeds Beginning Balance $ 1,054,003 $ $ $ $ $ $ $ $ $ $ Net Additional Funds $ $ $ $ $ $ $ $ $ $ $ Subtotal $ 1,054,003 $ $ $ $ $ $ $ $ $ $ Less: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Amount Available for Projects $ 1,054,003 $ $ $ $ $ $ $ $ $ $ Amount Paid for Projects $ (1,054,003) $ $ $ $ $ $ $ $ $ $ Subtotal $ $ $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ 2,635 $ $ $ $ $ $ $ $ $ $ Less: Interest to Cash Flow $ (2,635) $ $ $ $ $ $ $ $ $ $ Ending Balance $ $ $ $ $ $ $ $ $ $ $ Capital Projects Fund Beginning Balance $ $ 923,804 $ 3,464 $ 17 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Net Additional Funds $ 8,129,463 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 Subtotal $ 8,129,463 $ 4,523,804 $ 3,603,464 $ 3,600,017 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 Less: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Amount Available for Projects $ 8,129,463 $ 4,523,804 $ 3,603,464 $ 3,600,017 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 Amount Paid for Projects $ (7,207,963) $ (4,523,804) $ (3,603,464) $ (3,600,017) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) $ (3,600,000) Subtotal $ 921,500 $ $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ 2,304 $ 3,464 $ 17 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Less: Interest to Cash Flow $ $ $ $ $ $ $ $ $ $ $ Ending Balance $ 923,804 $ 3,464 $ 17 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Renewal & Replacement Beginning Balance $ 2,838,188 $ 2,829,251 $ 2,770,922 $ 2,777,605 $ 2,791,457 $ 2,805,415 $ 2,805,554 $ 2,805,556 $ 2,805,556 $ 2,805,556 $ 2,805,556 Net Additional Funds $ $ $ $ $ $ $ $ $ $ $ Subtotal $ 2,838,188 $ 2,829,251 $ 2,770,922 $ 2,777,605 $ 2,791,457 $ 2,805,415 $ 2,805,554 $ 2,805,556 $ 2,805,556 $ 2,805,556 $ 2,805,556 Less: Restricted Amount $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) $ (2,750,000) Amount Available for Projects $ 88,188 $ 79,251 $ 20,922 $ 27,605 $ 41,457 $ 55,415 $ 55,554 $ 55,556 $ 55,556 $ 55,556 $ 55,556 Amount Paid for Projects (2) $ (23,070) $ (79,251) $ (20,922) $ (27,605) $ (41,457) $ (55,415) $ (55,554) $ (55,556) $ (55,556) $ (55,556) $ (55,556) Subtotal $ 65,118 $ $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 $ 2,750,000 Plus: Interest Earned During the Year $ 14,133 $ 20,922 $ 27,605 $ 41,457 $ 55,415 $ 55,554 $ 55,556 $ 55,556 $ 55,556 $ 55,556 $ 55,556 Less: Interest to Cash Flow $ $ $ $ $ $ $ $ $ $ $ Ending Balance $ 2,829,251 $ 2,770,922 $ 2,777,605 $ 2,791,457 $ 2,805,415 $ 2,805,554 $ 2,805,556 $ 2,805,556 $ 2,805,556 $ 2,805,556 $ 2,805,556 46

52 Schedule 11 Funding Summary by Fund APPENDIX A CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Funding Summary By Fund FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Revenue Fund Beginning Balance $ 13,354,598 $ 7,622,725 $ 6,685,765 $ 7,775,732 $ 8,810,173 $ 9,207,843 $ 9,628,211 $ 10,072,918 $ 10,543,744 $ 11,042,625 $ 11,571,662 Net Additional Funds $ (5,711,718) $ (338,015) $ 1,089,966 $ 1,867,838 $ 2,469,646 $ 2,380,914 $ 1,878,099 $ 2,485,321 $ 3,563,292 $ 4,192,075 $ 5,306,542 Subtotal $ 7,642,880 $ 7,284,710 $ 7,775,732 $ 9,643,570 $ 11,279,819 $ 11,588,758 $ 11,506,311 $ 12,558,239 $ 14,107,036 $ 15,234,701 $ 16,878,204 Less: Restricted Amount $ $ $ (7,775,732) $ (8,810,173) $ (9,207,843) $ (9,628,211) $ (10,072,918) $ (10,543,744) $ (11,042,625) $ (11,571,662) $ (12,133,139) Amount Available for Projects $ 7,642,880 $ 7,284,710 $ $ 833,397 $ 2,071,975 $ 1,960,546 $ 1,433,393 $ 2,014,495 $ 3,064,411 $ 3,663,039 $ 4,745,064 Amount Paid for Projects $ (20,154) $ (598,945) $ $ (833,397) $ (2,071,975) $ (1,960,546) $ (1,433,393) $ (2,014,495) $ (3,064,411) $ (3,663,039) $ (4,745,064) Subtotal $ 7,622,725 $ 6,685,765 $ $ $ $ $ $ $ $ $ Plus: Restricted Amount $ $ $ 7,775,732 $ 8,810,173 $ 9,207,843 $ 9,628,211 $ 10,072,918 $ 10,543,744 $ 11,042,625 $ 11,571,662 $ 12,133,139 Plus: Interest Earned During the Year $ 52,443 $ 53,657 $ 72,307 $ 124,394 $ 180,180 $ 188,361 $ 197,011 $ 206,167 $ 215,864 $ 226,143 $ 237,048 Less: Interest to Cash Flow $ (52,443) $ (53,657) $ (72,307) $ (124,394) $ (180,180) $ (188,361) $ (197,011) $ (206,167) $ (215,864) $ (226,143) $ (237,048) Ending Balance $ 7,622,725 $ 6,685,765 $ 7,775,732 $ 8,810,173 $ 9,207,843 $ 9,628,211 $ 10,072,918 $ 10,543,744 $ 11,042,625 $ 11,571,662 $ 12,133,139 Restricted Reserves Beginning Balance $ 3,391,329 $ 3,391,329 $ 3,391,329 $ 4,410,617 $ 5,324,942 $ 6,430,882 $ 8,574,857 $ 9,454,480 $ 10,194,675 $ 10,747,715 $ 11,293,463 Net Additional Funds $ $ $ 1,019,288 $ 914,324 $ 1,105,941 $ 2,143,974 $ 879,623 $ 740,195 $ 553,040 $ 545,749 $ 654,622 Interest Earnings $ 16,957 $ 25,435 $ 39,010 $ 73,017 $ 117,558 $ 150,057 $ 180,293 $ 196,492 $ 209,424 $ 220,412 $ 232,415 Less: Interest Earnings Transferred to Operating Fund $ (16,957) $ (25,435) $ (39,010) $ (73,017) $ (117,558) $ (150,057) $ (180,293) $ (196,492) $ (209,424) $ (220,412) $ (232,415) Ending Balance $ 3,391,329 $ 3,391,329 $ 4,410,617 $ 5,324,942 $ 6,430,882 $ 8,574,857 $ 9,454,480 $ 10,194,675 $ 10,747,715 $ 11,293,463 $ 11,948,085 (1) Approximately 94% of total annual debt service (total annual debt service less annual 2009A Revenue Bond debt service) is eligible to be funded with impact fees. It is assumed in the analysis that of the annual debt service eligible to be funded with impact fees, 50% is to be funded with water impact fees and 50% with sewer impact fees. (2) Any Renewal & Replacement funds in excess of the the $2.75 million minimum fund requirement are assumed available for funding the capital requirements of the utility system. 47

53 APPENDIX B Appendix B Rate Design Analysis Supporting Schedules Schedule 1 presents the recommended water and sewer rates effective 7/1/2010 Schedule 2 presents the recommended water and sewer rates effective 1/1/2011 Schedule 3 presents the impact of the recommended rates effective 7/1/2010 for Outside City singlefamily residential water only customers Schedule 4 presents the impact of the recommended rates effective 7/1/2010 for Inside City singlefamily residential water and sewer customers Schedule 5 presents the impact of the recommended rates effective 7/1/2010 to various nonresidential customers with different meter sizes, services, and monthly consumption Schedule 6 provides a graph identifying the monthly water bills in neighboring communities for a typical SingleFamily customer using 6,000 gallons per month in FY 2010 to the Utility s current monthly bill as well as the Utility s monthly bill reflecting the alternative rate revenue adjustment options presented in this Report Schedule 7 provides a graph identifying the combined monthly water and sewer bills in neighboring communities for a typical SingleFamily customer using 6,000 gallons per month in FY 2010 to the Utility s current monthly bill as well as the Utility s monthly bill reflecting the alternative rate revenue adjustment options presented in this Report 48

54 Schedule 1 Rate Schedule Effective 7/1/2010 APPENDIX B New Rate Structure That Would Be Effective 7/1/2010 FIXED CHARGES INSIDE COCOA OUTSIDE COCOA TITUSVILLE 10" Meter Size Water Sewer Water Sewer Water 3/4" $ $ $ $ N/A 1" $ $ $ $ N/A 1.5" $ $ $ $ N/A 2" $ $ $ $ N/A 3" $ $ $ $ N/A 4" $ $ $ $ N/A 6" $ $ 1, $ $ 1, N/A 8" $ 1, $ 1, $ 1, $ 2, N/A 10" $ 1, $ 2, $ 1, $ 3, , USAGE CHARGES INSIDE COCOA OUTSIDE COCOA TITUSVILLE 10" ($ / 1,000 gal.) Water Sewer Water Sewer Water Tier 1 $ 2.19 $ 5.06 $ 2.41 $ 6.33 $ 2.30 Tier 2 $ 4.20 $ 4.62 $ 4.41 Tier 3 $ 5.47 $ 6.02 $ 5.74 Tier 4 $ 7.38 $ 8.12 $ 7.75 WATER USE PER TIER TIER 1 TIER 2 TIER 3 TIER 4 (Use in Thousand Gallons) 3/4" Over 24 1" Over " Over 168 2" Over 408 3" ,680 Over 1,680 4" ,380 1,380 2,760 Over 2,760 6" 0 3,300 3,300 6,600 6,600 13,200 Over 13,200 8" 0 12,000 12,000 24,000 24,000 48,000 Over 48,000 10" 0 21,000 21,000 42,000 42,000 84,000 Over 84,000 49

55 Schedule 2 Rate Schedule Effective 1/1/2011 APPENDIX B New Rate Structure That Would Be Effective 1/1/2011 FIXED CHARGES INSIDE COCOA OUTSIDE COCOA TITUSVILLE 10" Meter Size Water Sewer Water Sewer Water 3/4" $ $ $ $ N/A 1" $ $ $ $ N/A 1.5" $ $ $ $ N/A 2" $ $ $ $ N/A 3" $ $ $ $ N/A 4" $ $ $ $ N/A 6" $ $ 1, $ $ 1, N/A 8" $ 1, $ 1, $ 1, $ 2, N/A 10" $ 1, $ 2, $ 1, $ 3, , USAGE CHARGES INSIDE COCOA OUTSIDE COCOA TITUSVILLE 10" ($ / 1,000 gal.) Water Sewer Water Sewer Water Tier 1 $ 2.37 $ 5.46 $ 2.61 $ 6.83 $ 2.48 Tier 2 $ 4.54 $ 4.99 $ 4.76 Tier 3 $ 5.91 $ 6.50 $ 6.20 Tier 4 $ 7.97 $ 8.77 $ 8.37 WATER USE PER TIER TIER 1 TIER 2 TIER 3 TIER 4 (Use in Thousand Gallons) 3/4" Over 24 1" Over " Over 168 2" Over 408 3" ,680 Over 1,680 4" ,380 1,380 2,760 Over 2,760 6" 0 3,300 3,300 6,600 6,600 13,200 Over 13,200 8" 0 12,000 12,000 24,000 24,000 48,000 Over 48,000 10" 0 21,000 21,000 42,000 42,000 84,000 Over 84,000 50

56 Schedule 3 OC Residential Customer Impact APPENDIX B 51

57 Schedule 4 IC Residential Customer Impacts APPENDIX B 52

58 Schedule 5 Other Customer Impacts APPENDIX B Business Type Meter size Location water only water & sewer 12month avg. usage thru Jan in 1,000 gallons Current Monthly Bill Monthly Bill w/rate structure changes 7/1/2010 $ Chg.: 7/1/2010 vs. Current % Chg.: 7/1/2010 vs. Current restaurant 1.5 inside x 14 $ $ $ % restaurant 0.75 inside x 3 $ $ $ % restaurant 0.75 inside x 50 $ $ $ % Auto service 3" outside x 183 $ 2, $ 2, $ % motel 1.5" inside x 76 $ $ $ % motel 1.5 inside x 67 $ $ $ % motel 1.5 inside x 36 $ $ $ % multifamily 1" inside x 22 $ $ $ % multifamily 1" inside x 29 $ $ $ % multifamily 1.5" inside x 43 $ $ $ % multifamily 1.5" inside x 55 $ $ $ % multifamily 2" inside x 38 $ $ $ % government 10" outside X 17,466 $ 40, $ 41, $ 1, % government 10" outside X 24,593 $ 63, $ 68, $ 5, % government 10" outside X 27,254 $ 72, $ 81, $ 8, % 53

59 Schedule 6 Residential Water Rate Survey APPENDIX B 54

60 Schedule 7 Residential Water & Sewer Rate Survey APPENDIX B 55

61 APPENDIX C Appendix C Impact Fee Analysis Supporting Schedules Schedule 1 presents a summary of the Water Fixed Assets and cost basis of the analysis Schedule 2 presents a detailed summary of the Water Impact Fee Calculation Schedule 3 presents the results of the Water Impact Fee Calculation Schedule 4 presents a summary of the Sewer Fixed Assets and cost basis of the analysis Schedule 5 presents a detailed summary of the Sewer Impact Fee Calculation Schedule 6 presents the results of the Sewer Impact Fee Calculation Schedule 7 presents the FY 2010 Water Impact Fee Survey Schedule 8 presents the FY 2010 Combined Water & Sewer Impact Fee Survey 56

62 Schedule 1 Water Fixed Assets Summary APPENDIX C Table 1 Water Supply Assets Asset Capacity Installation/ Upgrade Year Estimated Replacement Cost RCNLD Groundwater Wells 48 wells $ 11,330,000 $ 5,368,660 Raw Groundwater supply pipelines (1) 51 miles $ 75,431,000 $ 37,715,664 TCR Surface Water Intake and Pump Station 12 mgd 1999 $ 2,832,000 $ 2,011,248 TCR PS Pipeline (1) 36 inch, 24 mgd 1999 $ 4,547,000 $ 3,713,710 Total: $ 94,140,000 $ 48,809,282 Table 2 Water Treatment Assets Asset Capacity Installation/ Upgrade Year Estimated Replacement Cost RCNLD Wewahootee WTP 48 mgd 1957/ 1997 $ 13,457,000 $ 8,742,130 Dyal WTP Groundwater 48 mgd 1970/ 1994 $ 36,149,000 $ 21,342,439 Dyal WTP Surface water 12 mgd 1999 $ 31,340,000 $ 23,286,412 Dyal WTP Shared Facilities 60 mgd 1970/ 1999 $ 16,815,000 $ 11,362,846 Total: $ 97,761,000 $ 64,733,827 Table 3 Water Storage and Pumping Assets Asset Capacity Installation/ Upgrade Year Estimated Replacement Cost RCNLD Dyal Onsite Storage & Pumping 10 MG/ 60 mgd 1970 $ 9,056,000 $ 753,350 Bananna River Storage & Pumping 4 MG 1965 $ 4,312,000 $ 675,560 Industrial Park Storage & Pumping 5 MG 1966 $ 4,273,000 $ 477,014 Viera Storage & Pumping 2 MG 2000 $ 2,443,000 $ 1,136,435 US 1 Elevated Storage Tank 1.4 MG 1957 $ 2,193,000 $ 39,667 Dyal ASR Wells 10mgd in recovery mode 1995/1999 $ 3,360,000 $ 2,609,880 Total: $ 25,637,000 $ 5,691,905 Table 4 Water Transmission Pipeline Assests (12 inch diameter and greater) Asset Length Average Age (years) Estimated Replacement Cost RCNLD Cast Iron 18 miles 30 $ 32,358,000 $ 12,943,200 Asbestos Cement 37 miles 27 $ 31,800,000 $ 14,628,000 PCCP 51 miles 28 $ 97,556,000 $ 52,029,867 PVC 43 miles 18 $ 34,892,000 $ 23,472,800 Ductile Iron 45 miles 19 $ 62,354,000 $ 42,608,567 Unknown Material 26 miles 24 $ 26,610,000 $ 15,966,000 Total: $ 285,570,000 $ 161,648,433 Table 5 Water Distribution Pipeline Assests (less than 12 inch diameter) Asset Length Average Age (years) Estimated Replacement Cost RCNLD Cast Iron 13 miles 29 $ 5,982,000 $ 2,512,440 Asbestos Cement 212 miles 29 $ 99,558,000 $ 41,814,360 PCCP 9 miles 24 TBD $ PVC 449 miles 20 $ 219,093,000 $ 139,422,818 Ductile Iron 19 miles 18 $ 9,912,000 $ 6,938,400 Unknown Material 335 miles 24 $ 145,785,000 $ 87,471,000 Total: $ 480,330,000 $ 278,159,018 57

63 Schedule 2 Water Impact Fee Calculation APPENDIX C CITY OF COCOA, FLORIDA Water System Impact Fee Study Fee Calculation Summary of Water Project Costs: Transmission Treatment Supply Storage & Pumping Total Water Project Costs $ 161,648,433 $ 64,733,827 $ 48,809,282 $ 5,691,905 $ 280,883,448 Less: Grant Funding $ $ $ $ $ Bond Financed Projects 33.74% $ 54,547,793 $ 21,844,241 $ 16,470,550 $ 1,920,717 $ 94,783,301 Projects Paid From Other Sources $ 107,100,641 $ 42,889,586 $ 32,338,732 $ 3,771,188 $ 186,100,147 Financing Analysis: Sources of Funds: Estimated Par Amount 5.00% Int for 30 Years $ 59,326,717 $ 23,758,012 $ 17,913,532 $ 2,088,991 $ 103,087,252 Estimated Int Earnings on Const Fund 0.00% Int for 0 Months $ $ $ $ $ Total Sources of Funds $ 59,326,717 $ 23,758,012 $ 17,913,532 $ 2,088,991 $ 103,087,252 Uses of Funds: Project Costs Financed $ 54,547,793 $ 21,844,241 $ 16,470,550 $ 1,920,717 $ 94,783,301 Cost of Issuance 1.55% of Par Amount $ 919,636 $ 368,278 $ 277,681 $ 32,382 $ 1,597,977 Debt Service Reserve 1 Years of D.S. $ 3,859,288 $ 1,545,493 $ 1,165,301 $ 135,892 $ 6,705,974 Capitalized Interest 0 Years Interest $ $ $ $ $ Underwriters Discount $0.00 per $1,000 $ $ $ $ $ Debt Service Surety 0.00% of D.S. $ $ $ $ $ Cost of Bond Insurance 0 Times Total D.S. $ $ $ $ $ Total Uses of Funds $ 59,326,717 $ 23,758,012 $ 17,913,532 $ 2,088,991 $ 103,087,252 Annual Debt Service $ 3,859,288 $ 1,545,493 $ 1,165,301 $ 135,892 $ 6,705,974 Total Principal & Interest Payments over Term of Loan $ 115,778,642 $ 46,364,783 $ 34,959,029 $ 4,076,755 $ 201,179,210 Projects Paid From Other Sources $ 107,100,641 $ 42,889,586 $ 32,338,732 $ 3,771,188 $ 186,100,147 Total Project Costs $ 222,879,282 $ 89,254,369 $ 67,297,761 $ 7,847,944 $ 387,279,356 Water System Impact Fee Calculation: Transmission Treatment Supply Storage & Pumping Total Capacity by System Function: Million Gallons Per Day (MGD) Equivalent Residential Connections 340 Gallons Per Day 211, , , , ,176 Cost per ERC $ 1,052 $ 506 $ 477 $ 38 $ 2,073 Credit for NPV of Debt Service Included in Usage Rates $ (100) $ (48) $ (45) $ (4) $ (196) Water System Impact Fee Cost / ERC $ 952 $ 458 $ 432 $ 34 $ 1,877 Less: Allowance for Estimation & Contingency 4.00% Net Capacity Cost / ERC $ 1,802 Percentage of Full Cost Recovery % Proposed Water System Impact Fee per ERC $ 914 $ 440 $ 415 $ 33 $ 1,802 Current Water System Impact Fee per ERC $ 1,000 Change $ 802 Percent Change 80.17% 58

64 Schedule 3 Water Impact Fee Results APPENDIX C 59

65 Schedule 4 Sewer Fixed Assets Summary APPENDIX C Table 6 Wastewater Collection and Pumping Assets Asset Quantity/ Capacity Installation/ Upgrade Year Estimated Replacement Cost RCNLD Lift Stations 53 stations $ 9,517,000 $ 5,216,139 Gravity Sewers (2) 61 miles varies $ 32,850,000 $ 9,378,387 Pressurized Force Mains (2) 35 miles varies $ 21,001,000 $ 9,356,064 Total: $ 63,368,000 $ 23,950,590 Table 7 Wastewater Treatment Assets Asset Capacity Installation/ Upgrade Year Estimated Replacement Cost RCNLD Sellers WRF 4.5 mgd 1950/ 1989 $ 38,722,000 $ 19,407,741 Total: Table 8 Reclaimed Water Assets Asset Capacity Installation/ Upgrade Year Estimated Replacement Cost RCNLD Sellers Reuse Storage 8 MG 1995/ 2005 $ 2,888,000 $ 2,201,188 Sellers Reuse Pumping 9 mgd 1995 $ 501,000 $ 248,261 Bracco Reservoir TBD TBD TBD $ Reuse Supplemental Wells 2 MG 1995 $ 1,893,000 $ 1,230,229 Elevated Storage 0.3 MG TBD $ 493,000 $ 285,940 Reuse Pipeline (1) 53 miles varies $ 29,196,000 $ 21,410,737 Total: $ 34,971,000 $ 25,376,355 (1) The analysis assumes a 60 year useful life for all pipe line assets. (2) The analysis includes all gravity sewer pipelines 10" and greater, as well as 50% of all 8" pipelines, or 54% of all gravity sewer assets. Likewise, the analysis includes all preasurized force main pipelines greater than 6", or 84% of all preasurized force main assets. 60

66 Schedule 5 Sewer Impact Fee Calculation APPENDIX C CITY OF COCOA, FLORIDA Sewer System Impact Fee Study Fee Calculation Summary of Sewer Project Costs: Collection & Pumping Treatment Reclaimed Water Total Sewer Project Costs $ 23,950,590 $ 19,407,741 $ 25,376,355 $ 68,734,686 Less: Grant Funding $ $ $ $ Bond Financed Projects 33.74% $ 8,082,057 $ 6,549,086 $ 8,563,177 $ 23,194,319 Projects Paid From Other Sources $ 15,868,533 $ 12,858,655 $ 16,813,178 $ 45,540,366 Financing Analysis: Sources of Funds: Estimated Par Amount 5.00% Int for 30 Years $ 8,790,125 $ 7,122,850 $ 9,313,396 $ 25,226,370 Estimated Int Earnings on Const Fund 0.00% Int for 0 Months $ $ $ $ Total Sources of Funds $ 8,790,125 $ 7,122,850 $ 9,313,396 $ 25,226,370 Uses of Funds: Project Costs Financed $ 8,082,057 $ 6,549,086 $ 8,563,177 $ 23,194,319 Cost of Issuance 1.55% of Par Amount $ 136,258 $ 110,413 $ 144,369 $ 391,039 Debt Service Reserve 1 Years of D.S. $ 571,810 $ 463,352 $ 605,850 $ 1,641,012 Capitalized Interest 0 Years Interest $ $ $ $ Underwriters Discount $0.00 per $1,000 $ $ $ $ Debt Service Surety 0.00% of D.S. $ $ $ $ Cost of Bond Insurance 0 Times Total D.S. $ $ $ $ Total Uses of Funds $ 8,790,125 $ 7,122,850 $ 9,313,396 $ 25,226,370 Annual Debt Service $ 571,810 $ 463,352 $ 605,850 $ 1,641,012 Total Principal & Interest Payments over Term of Loan $ 17,154,306 $ 13,900,548 $ 18,175,493 $ 49,230,348 Projects Paid From Other Sources $ 15,868,533 $ 12,858,655 $ 16,813,178 $ 45,540,366 Total Project Costs $ 33,022,840 $ 26,759,204 $ 34,988,671 $ 94,770,714 Sewer System Impact Fee Calculation: Collection & Pumping Treatment Reclaimed Water Total Capacity by System Function: Million Gallons Per Day (MGD) Equivalent Residential Connections 250 Gallons Per Day 49,500 18,000 36,000 18,000 Cost per ERC $ 667 $ 1,487 $ 972 $ 3,126 Credit for NPV of Debt Service Included in Usage Rates $ (64) $ (142) $ (93) $ (298) Sewer System Impact Fee Cost / ERC $ 603 $ 1,345 $ 879 $ 2,828 Less: Allowance for Estimation & Contingency 4.00% Net Capacity Cost / ERC $ 2,715 Percentage of Full Cost Recovery % Proposed Sewer System Impact Fee per ERC $ 579 $ 1,292 $ 844 $ 2,715 Current Sewer System Impact Fee per ERC $ 1,250 Change $ 1,465 Percent Change % 61

67 Schedule 6 Sewer Impact Fee Results APPENDIX C 62

68 Schedule 7 FY 2010 Water Impact Fee Survey APPENDIX C 63

69 Schedule 8 FY 2010 Combined Water & Sewer Impact Fee Survey APPENDIX C 64

70 APPENDIX D Appendix D Supporting Financial Schedules Council Action Council Action: (9% Rate Revenue Increase on 10/1/10, 8% Rate Revenue Increase on 1/1/2011, and 5% annual increases beginning on 10/1/2011) Schedule 1 contains the assumptions of the RSA Schedule 2 identifies the end of FY 2009 fund balances that serve as the FY 2010 beginning balances of the analysis Schedule 3 provides a listing of the tenyear capital improvement program that was utilized in the RSA Schedule 4 presents a detailed list of all projected cash inflows from FY Schedule 5 presents a detailed list of all projected cash outflows from FY Schedule 6 contains the FAMSXL Control Panel that presents a summary of the financial management plan, including annual rate increases, debt service coverage ratios, total CIP spending levels, customer impacts, and fund balances Schedule 7 presents the projected annual net income, debt service coverage, and cash flow results Schedule 8 shows the projected funding sources for the capital improvement program Schedule 9 contains the calculation of projected annual longterm borrowing Schedule 10 contains the calculation of projected annual SRF borrowing Schedule 11 presents a fundlevel cash flow reconciliation, providing the beginning balance in each year, the amount utilized for project funding or payment of debt service, interest calculations, and the end of year fund balance 65

71 Schedule 1 Assumptions APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Assumptions Annual Growth & Cost Escalators: FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Water System Growth: Customer Growth 0.00% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Use Growth 4.50% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Sewer System Growth: Customer Growth 0.00% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Use Growth 4.50% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Reclaimed Water System Growth: Customer Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Use Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Operating & Maintenance Expenses: Personnel Expenses: 2300 Life/Health Insurance N/A 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% All Other Personnel Expenses N/A 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Major Operating Expenses: 3400 Contract Services N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3410 Allocations General Fund N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 4300 Electric/Water/Sewer Service N/A 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 4600 Repairs & Maintenance N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 5200 Operating Supplies N/A 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Average Annual Increase in O&M Expenses: (1) N/A 4.39% 4.43% 4.46% 4.51% 4.57% 4.62% 4.67% 4.73% 4.79% 4.85% Capital Outlay: Machinery & Equipment N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% (1) It is assumed in the analysis that any operating expense not listed as a Major Operating Expense will escalate annually by 2.50% to 3.50% in each year of the projection period, except for 4907 Bad Debt Expense which is projected to escalate annually by the weighted average rate of increase in rate revenue. 66

72 Schedule 1 Assumptions APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Assumptions Debt Assumptions: Other Assumptions: % of Debt Service Avail to be Funded with Impact Fees: (1) Rate Increase Implementation Date: Water Impact Fees FY 2010 October 1 FY % FY 2011 January 1 Sewer Impact Fees FY October 1 FY % Price Elasticity Coefficient Debt Service Coverage Requirements: FY Rate Covenant Test I Net Revenues Only 1.00 Rate Covenant Test II Net Rev plus Impact Fees 1.25 Interest Earnings Rate On Fund Balances: Rate Coveneant Test Planning Requirement 1.50 FY % FY % SRF Loan Coverage Requirement 1.20 FY % SRF Loan Planning Requirement 1.50 FY % FY 2014 FY % LongTerm Financing: Bond Term 30 Years Working Capital Reserve Target: Months of O&M Interest Rate FY FY % Per Year FY % Per Year % of Budget Required For Desired Rate Increase: FY % Per Year FY % Per Year Personnel Services FY % Per Year FY % Cost of Issuance 1.50% of Par Underwriter's Discount $0.00 per $1,000 Operating & Maintenance Bond Insurance times total Debt Service FY % Capitalized Interest Years Interest Debt Service Surety 0.00% of Debt Service Capital Improvement Program Debt Service Reserve 1 Years of Debt Service FY % SRF Loan Financing: Annual Impact Fees Charged for Each ERU of Growth Assumed: Bond Term 20 Years Interest Rate Water Impact Fees (w/out Reclaimed Water Service Available) FY % Per Year FY 2010 $ 1,000 FY % Per Year FY 2011 $ 1,400 Cost of Issuance 0.50% of Par FY $ 1,750 Loan Repayment Res. 3.00% of Capital Cost Loan Service Fee 2.00% of Capital Cost Water Impact Fees (w/ Reclaimed Water Service Available) Capitalized Interest Years Interest FY $ 650 Debt Service Reserve Years of Debt Service Sewer Impact Fees FY $ 2,700 (1) Approximately 94% of total annual debt service (total annual debt service less annual 2009A Revenue Bond debt service) is eligible to be funded with impact fees. It is assumed in the analysis that of the annual debt service eligible to be funded with impact fees, 50% is to be funded with water impact fees and 50% with sewer impact fees. 67

73 Schedule 2 Beginning Balances APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Beginning Balances (1) FUND TITLE 10/1/2009 Water Impact Fees $ Sewer Impact Fees $ Series 2009A Revenue Bond Proceeds $ 8,978,975 Existing SRF Loan Proceeds $ 1,054,003 Capital Projects Fund $ Renewal & Replacement (2) $ 2,838,188 Revenue Fund (3) $ 13,354,598 Restricted Reserves $ 3,391,329 Total Consolidated Fund Balance $ 29,617,092 (1) FY 2010 Beginning Fund Balances are based upon estimated cash balances, provided by staff, as of 9/30/2009 and as such are subject to potential adjustment. (2) Any funds available above the $2,750,000 Renewal & Replacement Fund minimum requirement are reserved for capital not to be funded with revenue bond or SRF loan proceeds. (3) Revenue Fund includes current estimate of unrestricted cash onhand and Bond Sinking Fund reserves available for FY 2010 debt service payments. It is important to note that per discussions with staff, a $2 million deduction was made from the original estimate of cash onhand to account for cash received from billing customers whose service was provided for by other municipalities to whom that cash is owed and for other anticipated requirements yet to be paid. 68

74 Schedule 3 Capital Improvement Plan APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY Field Services Division: FY 2010 Budget Replace VehiclesField Service/Meter Shop $ $ $ $ $ $ $ $ $ $ $ FY 2010 CIP Replace VehiclesField Service/Meter Shop $ $ $ $ $ $ $ $ $ $ $ 4010 Administrative/Engineering Division: FY 2010 Budget: Project #WS0902 New Utilities A&E/Lab Building $ $ $ $ $ $ $ $ $ $ $ Remodel 600 School Street $ 75,000 $ $ $ $ $ $ $ $ $ $ Project #WS0501 Wellfield Pipe 48" $ $ $ $ $ $ $ $ $ $ $ Project #WS0403 US1 Widening Park to Rosa L. Jones $ $ $ $ $ $ $ $ $ $ $ Project #WS0401 US1 Widening Rosa L. Jones to Brunson/Pine $ $ $ $ $ $ $ $ $ $ $ Project #WS0402 US1 Widening Brunson/Pine to Cidco $ $ $ $ $ $ $ $ $ $ $ Project #WS0603 East Central Florida Regional Water Supply: Phase II Speci $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WS0405 South Mainland Water Main Extensions $ 100,000 $ $ $ $ $ $ $ $ $ $ Project #WS0709 Barnes Blvd/US1 $ $ $ $ $ $ $ $ $ $ $ Project #WS 0906 Barnes Fiske/Murrell $ 1,580,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX Security Measures for all UT AboveGround Facilities $ 150,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX South Mainland Water Quality Improvement Study $ $ $ $ $ $ $ $ $ $ $ FY 2011 FY 2020 CIP: New Utilities A&E/Lab Building, FF&E in 2015 [LOAN] $ $ $ $ 500,000 $ 5,000,000 $ 1,500,000 $ $ $ $ $ Wellfield Pipe 48" $ $ $ $ $ $ $ $ $ $ $ Port Canaveral 5mg G.S.T. & Pump Stn. [SRF] 2019 $ $ $ $ $ $ $ $ $ $ 275,000 $ 1,980,000 US1 Widening from Pine St. To Cidco Rd.: Replace Utilities (JA, $ due FY2010) [water $ $ $ 10,000,000 $ $ $ $ $ $ $ $ Replace VehiclesAdmin/Eng. $ $ $ $ $ $ $ $ $ $ $ Taylor Creek Road pipe (2400 feet) 2015 $ $ $ $ $ $ 600,000 $ $ $ $ $ Viera 5mg G.S.T #2 + Pump #3 + Pump Upgrades [LOAN] 2020 $ $ $ $ $ $ $ $ $ $ $ 1,800,000 South Mainland Water Quality ImprovementEng. Study $ $ $ $ $ $ $ $ $ $ $ U.S.1 between Barnes and Barton 16" WM (replace 8") [SRF] 2015 $ $ $ $ $ $ 2,080,000 $ $ $ $ $ Lab Information Management Software buy in '09; was $50 in '10 $ $ $ $ $ $ $ $ $ $ $ A&E Building Remodeling eliminate IFF new bldg. goes forward; $50k in '10 $ $ $ $ $ $ $ $ $ $ $ Security Measures for all UT aboveground facilities combine with 10041; $150/year x $ $ 544,000 $ 544,000 $ 544,000 $ 544,000 $ $ $ $ $ $ Grissom Pkwy to Canaveral Groves Blvd. new WM/RM [loan] 2015 $ $ $ $ $ $ 182,000 $ 1,815,000 $ $ $ $ 4015 Water Supply Division: FY 2010 Budget > Moved to 4020 $ $ $ $ $ $ $ $ $ $ $ FY 2011 FY 2020 CIP: Rehab. Wewa. Duty Pumps+Valves (8 over 4 years) thru 2011 $ $ 57,000 $ $ $ $ $ $ $ $ $ Upgrade Wewahootee Generators + Transfer Switches 2017 $ $ $ $ $ $ $ $ 1,000,000 $ $ $ Install hydropneumatic tank at Wewa. (surge study + design; replace piping + valves + $ $ 30,000 $ 200,000 $ 124,000 $ $ $ $ $ $ $ 69

75 Schedule 3 Capital Improvement Plan APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY Dyal Water Treatment Plant Division: FY 2010 Budget: Install 800KW Generator at Industrial Park $ $ $ $ $ $ $ $ $ $ $ Replace 5MG GST at Industrial Park $ $ $ $ $ $ $ $ $ $ $ Process Control System Improvments $ $ $ $ $ $ $ $ $ $ $ Chlorine Gas Conversion at Dyal $ $ $ $ $ $ $ $ $ $ $ Project #WS0821 Replace PLC Network $ 310,000 $ $ $ $ $ $ $ $ $ $ Dyal Facility Modernization Project $ $ $ $ $ $ $ $ $ $ $ Project #WS0711 Rehab Wewahootee Duty Pumps and Valves $ 57,000 $ $ $ $ $ $ $ $ $ $ Ozone Contractor Wall Refurbishment $ 200,000 $ $ $ $ $ $ $ $ $ $ Fencing and Security Issues $ 50,000 $ $ $ $ $ $ $ $ $ $ FY 2011 FY 2020 CIP: Expand Surface Water Treatment Plant [40% Bond/60% others] $ $ $ $ $ $ $ $ $ $ $ Install Bypass Piping around GST's (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Chlorine Gas Conversion Dyal $ $ $ $ $ $ $ $ $ $ $ Upgrade Operators Console (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Replace VehiclesDyal $ $ $ $ $ $ $ $ $ $ $ Dyal Plant Process Control System Improvements $ $ $ $ $ $ $ $ $ $ $ Install Liquid Oxygen System for Ozone (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Replace H.S. Pump EM Drives 2015 $ $ $ $ $ $ 350,000 $ 700,000 $ 300,000 $ $ $ Replace PLC Network (28) (PCP#2 in FY09 w/ budget amendment) $ $ 310,000 $ 310,000 $ 310,000 $ $ $ $ $ $ $ Rehab. Dyal Plant 5MG Storage Tank (east tank) $ $ $ $ 266,000 $ $ $ $ $ $ $ Install Discharge Piping Dyal to SR520 [BOND] (w/ plant expan.) $ $ $ $ $ $ $ $ $ $ $ Dyal Plant 10mg GST and appurtenances [BOND] (w/ plant expan.) $ $ $ $ $ $ $ $ $ $ $ Ozone injection system (w/ plant expansion) $ $ $ $ $ $ $ $ $ $ $ Install Rexa actuators on HSP 1,2,3,4 buy in '09? $ $ $ $ $ $ $ $ $ $ $ Purchase a bobcat $ $ $ $ $ $ $ $ $ $ $ Replace control drives (3) one per year $ $ 310,000 $ 310,000 $ 310,000 $ $ $ $ $ $ $ 4025 Transmission & Distribution Division: FY 2010 Budget: Project #WS0706 New Building for MultiUse $ $ $ $ $ $ $ $ $ $ $ Project #WS10XX #1Space Coast Gardens Distribution Improvments $ 100,000 $ $ $ $ $ $ $ $ $ $ #2Replacement of Mains by Contractor $ 200,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX #3Valve Improvement Program $ $ $ $ $ $ $ $ $ $ $ Project #WS08MT #4New Meters/Services/BFP for New Customers $ 200,000 $ $ $ $ $ $ $ $ $ $ Project #WS09LM #5Replace Large Meter Stations $ 500,000 $ $ $ $ $ $ $ $ $ $ 70

76 Schedule 3 Capital Improvement Plan APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2020 CIP: New T&D/W&P Bldg (design '08/construct '09/'10 $6.644m) [LOAN] $ $ $ $ $ $ $ $ $ $ $ Purchase one ground penetrating radar for new Locator $ $ $ $ 26,000 $ $ $ $ $ $ $ Replace VehiclesT/D & New Vehicles $ $ $ $ $ $ $ $ $ $ $ Purchase Hydrant Maintenance Truck (new) $ $ 35,000 $ $ $ $ $ $ $ $ $ Purchase vehicle for Utility Locator (new) $ $ $ 25,000 $ $ $ $ $ $ $ $ Purchase Backflow Prevention/Cross Connect. Control Truck (new) $ $ $ $ 35,000 $ $ $ $ $ $ $ South Atlantic Ave. replace water main [LOAN] amount CF to 2010? $ $ $ $ $ $ $ $ $ $ $ Indian River Dr. from S.R.520 north to 900 block: replace or line water main (6" unlined $ $ $ 100,000 $ 600,000 $ $ $ $ $ $ $ Replace/Relocate Water MainsIn House budget as OPERATING in '10 ($30k per year $ $ $ $ $ $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 50,000 Install Large Valves in Transmission Mains $ $ 250,000 $ 500,000 $ 250,000 $ 250,000 $ $ $ $ $ $ Purchase GPS Equipment $ $ $ $ 10,000 $ $ $ $ $ $ $ Large Vehicle & Equipment Replacement T&D $ $ $ $ $ $ $ $ $ $ $ Space Coast Gardens SD water distrib. system improvements $ $ 500,000 $ $ $ $ $ $ $ $ $ Backhoe Replacement Program $ $ $ $ $ $ 75,000 $ $ 75,000 $ $ 75,000 $ Purchase Paving Machine $ $ $ $ $ $ $ $ $ $ $ FF&E for new T&D Multiuse Building 2010 $ $ $ $ $ $ $ $ $ $ $ Demolish old T&D, UT Maint., and PW Barn Buildings 2010 $ $ $ $ $ $ $ $ $ $ $ New meters & services & BPA for new customers $ $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ $ $ $ $ $ Replace/Relocate Water MainsBy Contractor $ $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ Fire Hydrant Security combine with 10029; $394/year x 5 years $ $ $ $ $ $ $ $ $ $ $ 4115 Wastewater Collection Division: FY 2010 Budget: Project #WS0903 Upgrade Can Lift Stations and L.S. Buildings $ 250,000 $ $ $ $ $ $ $ $ $ $ Project #WS0904 Systematic Reline/Refurbish/Raplace Gravity $ 250,000 $ $ $ $ $ $ $ $ $ $ Project #WS08UM Radioread Reuse Meters for New Customers $ 20,000 $ $ $ $ $ $ $ $ $ $ Project #WS0833 SR524/Adamson Rd $ $ $ $ $ $ $ $ $ $ $ Project #WS0814 Upgrade Lift Stations $ 220,000 $ $ $ $ $ $ $ $ $ $ Project #WS0815 Relocate L.S. 44 $ $ $ $ $ $ $ $ $ $ $ Project #WS0404 SR520 FM/RM $ $ $ $ $ $ $ $ $ $ $ Surge Protection fo 53 Lift Stations $ 100,000 $ $ $ $ $ $ $ $ $ $ Project #WS10XX Replace Lift Station Electrical Panels & Elec. $ 64,500 $ $ $ $ $ $ $ $ $ $ Project #WS0813 Sewer Collection System Interconnects $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WS0901 Standby Generator for Lift Stations $ $ $ $ $ $ $ $ $ $ $ Expand Reuse System as Residents Request It $ $ $ $ $ $ $ $ $ $ $ 71

77 Schedule 3 Capital Improvement Plan APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2020 CIP: U.S.1 between Cidco Rd. and Camp Rd.: FM/RM [SRF] 2018 $ $ $ $ $ $ $ $ 250,000 $ 2,500,000 $ $ SR 524/Adamson Rd RM (LondonAdamson/524Talbot) [SRF] $ $ $ $ $ $ $ $ $ $ $ Purchase two trailermounted generators purchase 2 in '09; was $32 in '11 and $32 in $ $ $ $ $ $ $ $ $ $ $ Lift Station/Force Main Upgrades (#17, 19, 14, 21, 5, 1, 4) $ $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ $ $ $ 250,000 Reuse Distribution System Expansion ('10=Fairfield/Range/Rosetine) $ $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ Refurb/Replace Sewer Mains & Lines $ $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 Standby Generators for lift stations (2/year) through FY2013 $ $ 60,000 $ 60,000 $ 60,000 $ $ $ $ $ $ $ Replace VehiclesWW Collection $ $ $ $ $ $ $ $ $ $ $ Clearlake Rd. (Rosetine Michigan/U.S.1) 20" FM [SRF] $ $ $ 835,000 $ $ $ $ $ $ $ $ Sewer Collection System Interconnects (1013)(3443)(1645) $ $ 200,000 $ 100,000 $ 100,000 $ 100,000 $ $ $ $ $ $ Cox Road Force Main from S.R.524 to S.R.520 [SRF] to '13 by CIP Cte $ $ $ $ 1,120,000 $ $ $ $ $ $ $ Byrd Plaza (US1 to Fiske/Dixon) 12" RW Main [SRF] $ $ $ $ $ $ 283,000 $ $ $ $ $ Cidco Park East (Industry RdUS1) 16"/12" Force Main [SRF] $ $ $ $ $ $ 435,000 $ $ $ $ $ SR520 from Townsend to Fern Meadows & I95 Crossing FM/RM Mains [SRF] $ $ 2,111,000 $ $ $ $ $ $ $ $ $ Michigan Ave. (US1 to Cocoa Lakes Blvd.) 12" RW Main [SRF] $ $ $ $ $ $ 97,000 $ $ $ $ $ SR520 and SR524 east to Friday Rd 8" Force Main [SRF] $ $ $ $ $ $ 1,220,000 $ $ $ $ $ Wilson St. to Clearlake Rd. 16" Force Main [SRF] 2018 $ $ $ $ $ $ $ $ $ 600,000 $ $ SR520/SR524 west to Smith Property 10" Force Main [SRF] 2016 $ $ $ $ $ $ $ 950,000 $ $ $ $ Large Vehicle & Equipment Replacement WW Collection $ $ $ $ $ $ $ $ $ $ $ Radioread reuse meters for new customers req'd by DFD $ $ $ $ $ $ $ $ $ $ $ Replace two trailermounted well point pumps $ $ $ 25,000 $ 25,000 $ $ $ $ $ $ $ Replace asphalt roller $ $ $ 35,000 $ $ $ $ $ $ $ $ 4120 Water Reclamation Division: FY 2010 Budget: Project #WS0811 Corrosivity Control System $ $ $ $ $ $ $ $ $ $ $ Project #WS0806 Increase Plant Discharge Capacity $ $ $ $ $ $ $ $ $ $ $ Project #WS0807 Transfer Pump Control System $ 25,000 $ $ $ $ $ $ $ $ $ $ Project #WS0809 NAOCL Tank Replacement $ $ $ $ $ $ $ $ $ $ $ Project #WS0808 Modify Aeration Blower Control $ 40,000 $ $ $ $ $ $ $ $ $ $ Project #WS0503 Reclaimed Water Aquifer Storage & Recovery Well System $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Increase Effluent Filtration $ 500,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Upgrade Preliminary Treatment Process $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Upgrade WRF Blowers $ 85,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Replace Polymer Feed System $ 50,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers BNR Process Evaluation $ 15,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers Operational Data Management System $ 15,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers/Mud Lake Conservation Area Concept Eval $ 15,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers Plant Telemetry Improvments $ 52,000 $ $ $ $ $ $ $ $ $ $ Project #WSXXXX Sellers Plant Surge Protection $ 55,000 $ $ $ $ $ $ $ $ $ $ 72

78 Schedule 3 Capital Improvement Plan APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2020 CIP: Increase Effluent Filtration [CIA/DER Account] $ $ $ $ $ $ $ $ $ $ $ Increase Effluent Filtration [CIA/DER Account] $ $ $ $ $ $ $ $ $ $ $ Modify Effluent Filter Pump & Controls $ $ 30,000 $ $ $ $ $ $ $ $ $ Upgrade WRF SCADA (every 3 years) $ $ 16,000 $ $ $ 17,000 $ $ $ 18,000 $ $ $ 19,000 Replace VehiclesSellers $ $ $ $ $ $ $ $ $ $ $ 25,000 Expand Waste Water Treatment Capacity [Bond] 2015 $ $ $ $ $ $ 13,000,000 $ $ $ $ $ Effluent Disposal Plan Upgrade (engineer in '09, construct in '14) $ $ $ $ $ 300,000 $ $ $ $ $ $ Replace Process Pumps $ $ $ $ 175,000 $ $ $ $ $ $ $ Reuse 2mg G.S.T. incl. land acquisition [Bond] 2015 $ $ $ $ $ $ 1,500,000 $ $ $ $ $ Upgrade Preliminary Treatment Process $ $ 500,000 $ $ $ $ $ $ $ $ $ Construct and Equip 2nd Reclaimed ASR Well on plant site $ $ $ $ 400,000 $ $ $ $ $ $ $ Reclaimed Water Pump Control System do in '09; was $40 in '10 $ $ $ $ $ $ $ $ $ $ $ Upgrade WRF Blowers $ $ $ $ $ $ $ $ $ $ $ Replace polymer feed system $ $ $ $ $ $ $ $ $ $ $ Sellers Admin. Building remodeling $80k operating expense $ $ $ $ $ $ $ $ $ $ $ Major overhall (P/M) of plant clarifiers $ $ $ $ 40,000 $ $ $ $ $ $ $ Replace alum storage tanks (recoat in FY2009) $ $ $ $ $ 30,000 $ $ $ $ $ $ US1 Widening RW Interconnect w/ Rockledge $ 405,000 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for T&D Building funded from Series 2009A Bond $ 6,778,975 $ $ $ $ $ $ $ $ $ $ Capital Projects for Remaining $2.2 Million of Series 2009A Bond Proceeds (1) $ 2,200,000 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for U.S.1 Widening, water portion funded from SRL DW Project #WS0401 HDR sdc $ 38,420 $ $ $ $ $ $ $ $ $ $ Project #WS0401 QLH Loan Administration $ 4,306 $ $ $ $ $ $ $ $ $ $ Project #WS0403 HDR sdc $ 91,373 $ $ $ $ $ $ $ $ $ $ Project #WS0403 QLH Loan Administration $ 640 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for South Mainland 42" New Water Main funded from SRL DW Project #WS0405 CH2M sdc $ 62,336 $ $ $ $ $ $ $ $ $ $ Project #WS0405 Turner Inspection $ 10,020 $ $ $ $ $ $ $ $ $ $ Project #WS0405 GlobeTec Construction $ 486,389 $ $ $ $ $ $ $ $ $ $ Project #WS0405 Nodarse Testing $ 8,882 $ $ $ $ $ $ $ $ $ $ Project #WS0405 QLH Loan Administration $ 4,399 $ $ $ $ $ $ $ $ $ $ Project #WS0405 The Viera Company Contributed Capital (70%) $ 1,324,463 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for U.S.1 Widening, sewer portion funded from SRL WW Project #WS0401 HDR sdc $ 20,688 $ $ $ $ $ $ $ $ $ $ Project #WS0401 QLH Loan Administration $ 2,319 $ $ $ $ $ $ $ $ $ $ Project #WS0403 HDR sdc $ 49,201 $ $ $ $ $ $ $ $ $ $ Project #WS0403 QLH Loan Administration $ 345 $ $ $ $ $ $ $ $ $ $ 73

79 Schedule 3 Capital Improvement Plan APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Capital Project Spending By Year Project Description FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Remaining Encumb./Expens. for S.R.520 Force Main/Reclaimed Main funded from SRL WW Project #WS0404 QLH sdc $ 11,514 $ $ $ $ $ $ $ $ $ $ Project #WS0404 QLH Loan Administration $ 8,145 $ $ $ $ $ $ $ $ $ $ Project #WS0404 Cathcart Construction $ 212,394 $ $ $ $ $ $ $ $ $ $ Remaining Encumb./Expens. for S. Atlantic Ave. funded from SRL DW Project #WS0601 HDR sdc $ 56,392 $ $ $ $ $ $ $ $ $ $ Project #WS0601 MASCI Construction (Less Principal Foregiveness) $ 6,393 $ $ $ $ $ $ $ $ $ $ Project #WS0601 QLH Loan Administration $ 23,070 $ $ $ $ $ $ $ $ $ $ Unspecified Future Renewal & Replacement Projects $ $ 1,000,000 $ 3,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 Total CIP Expenditures (2) $ 17,284,165 $ 7,313,000 $ 17,404,000 $ 16,255,000 $ 17,601,000 $ 32,372,000 $ 14,515,000 $ 12,443,000 $ 13,900,000 $ 11,150,000 $ 14,374,000 Compounded Annual Inflation Applied to Budgeted CIP (3) 0.00% 0.00% 3.79% 7.58% 11.37% 15.16% 18.95% 22.74% 26.53% 30.32% 34.11% Projected CIP Adjusted for Compounded Annual Inflation $ 17,284,165 $ 7,313,000 $ 18,063,612 $ 17,487,129 $ 19,602,234 $ 37,279,595 $ 17,265,593 $ 15,272,538 $ 17,587,670 $ 14,530,680 $ 19,276,971 % of Projected CIP Projected to be Executed % % % % % % % % % % % Projected CIP Cost to be Funded $ 17,284,165 $ 7,313,000 $ 18,063,612 $ 17,487,129 $ 19,602,234 $ 37,279,595 $ 17,265,593 $ 15,272,538 $ 17,587,670 $ 14,530,680 $ 19,276,971 Projected CIP Reduction from Budget $ $ $ $ $ $ $ $ $ $ $ (1) A detailed list of capital projects to be funded with the $2.2 million of remaining Series 2009A Bond proceeds is forthcoming and will be integrated into the analysis upon receipt of the information from staff. (2) FY 2010 capital expenditures are per the FY 2010 Budget. Beginning in FY 2011, all capital expenditures are per the CIP as well as dicussions with staff. (3) Compounded annual inflation is based upon the 10year average annual increase in inflation per the Engineering News Record Construction Cost Index (ENRCCI). NOTE: All capital projects in blue highlighting are to be funded with future SRF Loan proceeds as determined by staff. 74

80 Schedule 4 Projection of Cash Inflows APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Inflows Utility System Cash Inflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Rate Revenue Assumptions Water Customer Growth 0.00% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Water Use Growth 4.50% 0.22% 0.44% 0.66% 0.87% 1.08% 1.07% 1.06% 1.05% 1.03% 1.02% Sewer Customer Growth 0.00% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Sewer Use Growth 4.50% 0.11% 0.22% 0.33% 0.44% 0.55% 0.55% 0.54% 0.54% 0.54% 0.53% Reclaimed Water Customer Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Reclaimed Water Use Growth 0.00% 0.54% 1.07% 1.59% 2.09% 2.56% 2.49% 2.43% 2.38% 2.32% 2.27% Annual Water Rate Increase 9.00% 8.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Annual Sewer Rate Increase 9.00% 8.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Annual Reclaimed Water Rate Increase 9.00% 8.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Rate Revenue Subject To Growth & Rate Increases Water Sales Fixed Component $ 12,042,726 $ 13,939,264 $ 14,980,361 $ 15,832,804 $ 16,769,238 $ 17,797,742 $ 18,887,174 $ 20,041,054 $ 21,263,105 $ 22,557,257 $ 23,927,668 Water Sales Usage Component $ 22,691,161 $ 25,996,530 $ 27,744,536 $ 29,113,858 $ 30,615,547 $ 32,261,189 $ 33,991,412 $ 35,810,431 $ 37,722,670 $ 39,732,767 $ 41,845,586 Sewer Sales Fixed Component $ 2,697,367 $ 3,118,746 $ 3,344,391 $ 3,523,271 $ 3,715,760 $ 3,922,974 $ 4,141,621 $ 4,372,325 $ 4,615,745 $ 4,872,576 $ 5,143,551 Sewer Sales Usage Component $ 1,270,609 $ 1,454,104 $ 1,548,504 $ 1,619,676 $ 1,695,963 $ 1,777,751 $ 1,863,428 $ 1,953,176 $ 2,047,187 $ 2,145,661 $ 2,248,808 Reclaimed Water Sales Fixed Component $ 129,580 $ 150,464 $ 162,719 $ 173,574 $ 186,060 $ 200,359 $ 215,624 $ 231,914 $ 249,293 $ 267,831 $ 287,600 Reclaimed Water Sales Usage Component $ 127,831 $ 146,918 $ 157,783 $ 167,107 $ 177,848 $ 190,148 $ 203,173 $ 216,961 $ 231,554 $ 246,996 $ 263,332 Total Rate Revenue Subject To Growth & Rate Increases $ 38,959,275 $ 44,806,026 $ 47,938,294 $ 50,430,290 $ 53,160,416 $ 56,150,165 $ 59,302,431 $ 62,625,861 $ 66,129,554 $ 69,823,089 $ 73,716,544 Other Operating Revenue Earned Not Billed $ $ $ $ $ $ $ $ $ $ $ Water Connection Fee $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 $ 230,000 Water Hydrant Fees $ 2,000,000 $ 2,160,000 $ 2,268,000 $ 2,381,400 $ 2,500,470 $ 2,625,494 $ 2,756,768 $ 2,894,607 $ 3,039,337 $ 3,191,304 $ 3,350,869 FDOT Easement Payment $ $ $ $ $ $ $ $ $ $ $ Hydrant Resid Flow Test $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Backflow Device Test $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 $ 163,000 Jumper Meters $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 Plan Review / Const Inspect $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 Port Access Charge $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 $ 1,830 Cross Connection Control $ $ $ $ $ $ $ $ $ $ $ Reuse Water Installation $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 Sewer Connection Fee $ $ $ $ $ $ $ $ $ $ $ 362 Rents and Royalties $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ Sale of Fixed Assets $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25, Sale of Surplus Scrap $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5, Contributions & Donations $ $ $ $ $ $ $ $ $ $ $ 369 Other Misc. Revenues $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 $ 50,360 TotalOther Operating Revenue $ 2,504,190 $ 2,664,190 $ 2,772,190 $ 2,885,590 $ 3,004,660 $ 3,129,684 $ 3,260,958 $ 3,398,797 $ 3,543,527 $ 3,695,494 $ 3,855,059 75

81 Schedule 4 Projection of Cash Inflows APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Inflows Utility System Cash Inflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 NonOperating Revenue / Other Sources of Funds Water Impact Fees (1) $ 272,500 $ 678,000 $ 1,017,000 $ 1,356,000 $ 1,695,000 $ 1,695,000 $ 1,695,000 $ 1,695,000 $ 1,695,000 $ 1,695,000 $ 1,695,000 Sewer Impact Fees (2) $ 27,000 $ 54,000 $ 81,000 $ 108,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 Capital Contributions (3) Recurring Contributed Capital for Connections $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000 Rockledge Interconnect $ 405,000 $ $ $ $ $ $ $ $ $ $ South Mainland $ 820,500 $ $ $ $ $ $ $ $ $ $ DER CIA Grant Money $ 1,220,000 $ $ $ $ $ $ $ $ $ $ The Viera Company Barnes Blvd & Fiske $ 759,500 $ $ $ $ $ $ $ $ $ $ The Viera Company 70% of 42" Water Main $ 1,324,463 $ $ $ $ $ $ $ $ $ $ Interest Earned on Invested Funds $ 135,680 $ 100,761 $ 194,155 $ 323,216 $ 495,044 $ 712,811 $ 551,769 $ 557,422 $ 603,451 $ 594,416 $ 665,078 Total NonOperating Revenue / Other Sources of Funds $ 5,099,643 $ 967,761 $ 1,427,155 $ 1,922,216 $ 2,460,044 $ 2,677,811 $ 2,516,769 $ 2,522,422 $ 2,568,451 $ 2,559,416 $ 2,630,078 Total Utility System Cash Inflows $ 46,563,108 $ 48,437,977 $ 52,137,639 $ 55,238,096 $ 58,625,120 $ 61,957,659 $ 65,080,158 $ 68,547,079 $ 72,241,532 $ 76,077,999 $ 80,201,681 (1) The water impact fees assumed in each year of the analysis are presented in the 'Assumptions' Schedule of this Workbook. It is assumed in the analysis that 5% of total new water connections in any year of the projection period will have reclaimed water service available. (2) The sewer impact fees assumed in each year of the analysis are presented in the 'Assumptions' Schedule of this Workbook. (3) Recurring Contributed Capital for Connections are restricted for the operating expenses resulting from new connections to the system. All other Contributed Capital proceeds are reserved for capital improvement projects projected to occur in FY 2010 and are, therefore, transfered out to the Capital Projects Fund upon receipt. 76

82 Schedule 5 Projection of Cash Outflows APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Outflows Utility System Cash Outflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 O&M Personnel Services: 1200 Regular Salaries & Wages $ 6,506,852 $ 6,767,126 $ 7,037,811 $ 7,319,324 $ 7,612,097 $ 7,916,580 $ 8,233,244 $ 8,562,573 $ 8,905,076 $ 9,261,279 $ 9,631, Leave Incentive Sell Back $ $ $ $ $ $ $ $ $ $ $ 1212 Retirement Leave Accruals $ 4,573 $ 4,756 $ 4,946 $ 5,144 $ 5,350 $ 5,564 $ 5,786 $ 6,018 $ 6,258 $ 6,509 $ 6, Other Salaries & Wages $ 113,487 $ 118,026 $ 122,748 $ 127,657 $ 132,764 $ 138,074 $ 143,597 $ 149,341 $ 155,315 $ 161,527 $ 167, Overtime $ 276,000 $ 287,040 $ 298,522 $ 310,462 $ 322,881 $ 335,796 $ 349,228 $ 363,197 $ 377,725 $ 392,834 $ 408, Clothing/Shoe Allowances $ 14,690 $ 15,278 $ 15,889 $ 16,524 $ 17,185 $ 17,873 $ 18,588 $ 19,331 $ 20,104 $ 20,908 $ 21, FICA Taxes $ 508,700 $ 529,048 $ 550,210 $ 572,218 $ 595,107 $ 618,911 $ 643,668 $ 669,414 $ 696,191 $ 724,039 $ 753, Retirement Contributions $ 1,002,063 $ 1,042,146 $ 1,083,831 $ 1,127,185 $ 1,172,272 $ 1,219,163 $ 1,267,929 $ 1,318,647 $ 1,371,392 $ 1,426,248 $ 1,483, Life/Health Insurance $ 1,549,201 $ 1,704,121 $ 1,874,533 $ 2,061,987 $ 2,268,185 $ 2,495,004 $ 2,744,504 $ 3,018,954 $ 3,320,850 $ 3,652,935 $ 4,018, Life/Health Retirees $ $ $ $ $ $ $ $ $ $ $ 2400 Worker's Compensation $ 317,369 $ 330,064 $ 343,266 $ 356,997 $ 371,277 $ 386,128 $ 401,573 $ 417,636 $ 434,341 $ 451,715 $ 469, Unemployment Compensation $ 15,000 $ 15,600 $ 16,224 $ 16,873 $ 17,548 $ 18,250 $ 18,980 $ 19,739 $ 20,529 $ 21,350 $ 22, Cafeteria Plan $ 114,000 $ 118,560 $ 123,302 $ 128,234 $ 133,364 $ 138,698 $ 144,246 $ 150,016 $ 156,017 $ 162,258 $ 168,748 Total Personnel Services Projected From Budget $ 10,421,935 $ 10,931,764 $ 11,471,282 $ 12,042,606 $ 12,648,029 $ 13,290,041 $ 13,971,343 $ 14,694,867 $ 15,463,799 $ 16,281,602 $ 17,152,042 % of Budgeted O&M Projected to be Executed 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% 96% Projected O&M Cost to be Funded $ 10,005,058 $ 10,494,494 $ 11,012,431 $ 11,560,901 $ 12,142,108 $ 12,758,440 $ 13,412,489 $ 14,107,072 $ 14,845,247 $ 15,630,338 $ 16,465,961 Projected O&M Reduction from Budget $ 416,877 $ 437,271 $ 458,851 $ 481,704 $ 505,921 $ 531,602 $ 558,854 $ 587,795 $ 618,552 $ 651,264 $ 686,082 O&M Operating Expenses: 3100 Professional Services $ 212,670 $ 219,050 $ 225,622 $ 232,390 $ 239,362 $ 246,543 $ 253,939 $ 261,557 $ 269,404 $ 277,486 $ 285, Legal Expenses $ 75,000 $ 77,250 $ 79,568 $ 81,955 $ 84,413 $ 86,946 $ 89,554 $ 92,241 $ 95,008 $ 97,858 $ 100, Medical Services $ 360 $ 369 $ 378 $ 388 $ 397 $ 407 $ 417 $ 428 $ 439 $ 450 $ Engineering Services $ 300,000 $ 309,000 $ 318,270 $ 327,818 $ 337,653 $ 347,782 $ 358,216 $ 368,962 $ 380,031 $ 391,432 $ 403, Accounting & Auditing $ 39,700 $ 40,693 $ 41,710 $ 42,753 $ 43,821 $ 44,917 $ 46,040 $ 47,191 $ 48,371 $ 49,580 $ 50, Contract Services $ 823,984 $ 848,704 $ 874,165 $ 900,390 $ 927,401 $ 955,223 $ 983,880 $ 1,013,396 $ 1,043,798 $ 1,075,112 $ 1,107, Allocations General Fund $ 8,770,010 $ 9,033,110 $ 9,304,104 $ 9,583,227 $ 9,870,724 $ 10,166,845 $ 10,471,851 $ 10,786,006 $ 11,109,586 $ 11,442,874 $ 11,786, Contingency $ 508,284 $ 520,991 $ 534,016 $ 547,366 $ 561,050 $ 575,077 $ 589,454 $ 604,190 $ 619,295 $ 634,777 $ 650, Travel & Per Diem $ 21,500 $ 22,038 $ 22,588 $ 23,153 $ 23,732 $ 24,325 $ 24,933 $ 25,557 $ 26,196 $ 26,851 $ 27, Communication $ 62,500 $ 64,063 $ 65,664 $ 67,306 $ 68,988 $ 70,713 $ 72,481 $ 74,293 $ 76,150 $ 78,054 $ 80, Postage & Freight $ 18,800 $ 19,270 $ 19,752 $ 20,246 $ 20,752 $ 21,270 $ 21,802 $ 22,347 $ 22,906 $ 23,479 $ 24, Electric/Water/Sewer Service $ 2,329,180 $ 2,562,098 $ 2,818,308 $ 3,100,139 $ 3,410,152 $ 3,751,168 $ 4,126,284 $ 4,538,913 $ 4,992,804 $ 5,492,085 $ 6,041, Rentals & Leases $ 236,614 $ 243,712 $ 251,024 $ 258,555 $ 266,311 $ 274,300 $ 282,529 $ 291,005 $ 299,736 $ 308,728 $ 317, Insurance $ 407,178 $ 419,393 $ 431,975 $ 444,934 $ 458,282 $ 472,031 $ 486,192 $ 500,778 $ 515,801 $ 531,275 $ 547, Repairs & Maintenance $ 3,539,276 $ 3,645,454 $ 3,754,818 $ 3,867,462 $ 3,983,486 $ 4,102,991 $ 4,226,081 $ 4,352,863 $ 4,483,449 $ 4,617,952 $ 4,756, Printing & Binding $ 10,000 $ 10,250 $ 10,506 $ 10,769 $ 11,038 $ 11,314 $ 11,597 $ 11,887 $ 12,184 $ 12,489 $ 12, Promotional Activities $ 15,250 $ 15,631 $ 16,022 $ 16,423 $ 16,833 $ 17,254 $ 17,685 $ 18,127 $ 18,581 $ 19,045 $ 19, Other Charges & Oblig. $ 125,975 $ 129,124 $ 132,352 $ 135,661 $ 139,053 $ 142,529 $ 146,092 $ 149,745 $ 153,488 $ 157,326 $ 161, Bad Debt Expense $ 100,000 $ 113,000 $ 123,735 $ 129,922 $ 136,418 $ 143,239 $ 150,401 $ 157,921 $ 165,817 $ 174,108 $ 182, Cash Over & Under $ $ $ $ $ $ $ $ $ $ $ 4909 Document Recording Chgs $ 2,000 $ 2,050 $ 2,101 $ 2,154 $ 2,208 $ 2,263 $ 2,319 $ 2,377 $ 2,437 $ 2,498 $ 2, Operating Supplies $ 4,326,501 $ 4,542,826 $ 4,769,967 $ 5,008,466 $ 5,258,889 $ 5,521,833 $ 5,797,925 $ 6,087,821 $ 6,392,212 $ 6,711,823 $ 7,047, Road Materials/Supplies $ 45,840 $ 46,986 $ 48,161 $ 49,365 $ 50,599 $ 51,864 $ 53,160 $ 54,489 $ 55,852 $ 57,248 $ 58, Books/Membership/Traning $ 29,132 $ 29,860 $ 30,607 $ 31,372 $ 32,156 $ 32,960 $ 33,784 $ 34,629 $ 35,495 $ 36,382 $ 37, Training $ 40,750 $ 41,769 $ 42,813 $ 43,883 $ 44,980 $ 46,105 $ 47,258 $ 48,439 $ 49,650 $ 50,891 $ 52,163 Total Operating Expenses Projected From Budget $ 22,040,504 $ 22,956,691 $ 23,918,225 $ 24,926,094 $ 25,988,700 $ 27,109,900 $ 28,293,875 $ 29,545,163 $ 30,868,688 $ 32,269,800 $ 33,754,313 % of Budgeted O&M Projected to be Executed 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Projected O&M Cost to be Funded $ 20,938,479 $ 21,808,857 $ 22,722,314 $ 23,679,789 $ 24,689,265 $ 25,754,405 $ 26,879,181 $ 28,067,904 $ 29,325,253 $ 30,656,310 $ 32,066,597 Projected O&M Reduction from Budget $ 1,102,025 $ 1,147,835 $ 1,195,911 $ 1,246,305 $ 1,299,435 $ 1,355,495 $ 1,414,694 $ 1,477,258 $ 1,543,434 $ 1,613,490 $ 1,687,716 77

83 Schedule 5 Projection of Cash Outflows APPENDIX D CITY OF COCOA, FLORIDA Water & Sewer Utility System Financial Management Program Summary Summary of Projection of Cash Outflows Utility System Cash Outflows FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Minor Capital Outlay: Machinery & Equipment $ 521,888 $ 750,000 $ 772,500 $ 795,675 $ 819,545 $ 844,132 $ 869,456 $ 895,539 $ 922,405 $ 950,078 $ 978,580 Total Minor Capital Outlay $ 521,888 $ 750,000 $ 772,500 $ 795,675 $ 819,545 $ 844,132 $ 869,456 $ 895,539 $ 922,405 $ 950,078 $ 978,580 Other Below the Line Expenses: Capital Lease Generators $ 181,444 $ 181,444 $ $ $ $ $ $ $ $ $ Total Other Below the Line Expenses $ 181,444 $ 181,444 $ $ $ $ $ $ $ $ $ Transfers Out: PaymentInLieuOfFranchise Fee (1) $ 631,196 $ 910,012 $ 1,018,544 $ 1,084,511 $ 1,160,022 $ 1,246,020 $ 1,336,303 $ 1,430,981 $ 1,530,155 $ 1,633,916 $ 1,742,343 Transfer to General Account of Surplus Fund (2) $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 Transfer to Capital Projects Fund (2) $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600,000 General Fund Capital Projects 301 $ 2,278,000 $ $ $ $ $ $ $ $ $ $ Tranfer Out to Restricted Assets 425 $ 126,200 $ 130,617 $ 135,189 $ 139,920 $ 144,817 $ 149,886 $ 155,132 $ 160,562 $ 166,181 $ 171,998 $ 178,018 Total Transfers Out $ 10,235,396 $ 8,240,629 $ 8,353,733 $ 8,424,432 $ 8,504,840 $ 8,595,906 $ 8,691,435 $ 8,791,542 $ 8,896,336 $ 9,005,914 $ 9,120,360 Bond/Debt Service Expenses: Existing Senior Lien Debt (Principal & Interest): Series 1999 Bonds $ 360,938 $ 360,938 $ 360,938 $ 1,365,938 $ 1,363,175 $ 1,367,788 $ 1,364,250 $ 1,362,825 $ 1,368,250 $ $ Series 2003 Bonds $ 799,700 $ 799,700 $ 799,700 $ 1,889,700 $ 1,886,550 $ 1,887,488 $ 1,890,275 $ 1,886,525 $ 1,888,925 $ 1,888,575 $ 1,889,100 Series 2009A Bonds $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 $ 440,969 Series 2009B Bonds $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 590,750 $ 2,085,750 $ 2,079,688 Series 2009C Bonds $ 2,377,613 $ 2,378,213 $ 2,381,063 $ $ $ $ $ $ $ $ Cumulative New Senior Lien Debt for Additional Borrowings $ $ $ 509,644 $ 1,508,680 $ 2,556,179 $ 4,191,372 $ 5,713,785 $ 6,535,170 $ 7,194,195 $ 7,757,005 $ 8,371,694 Existing SRF Loan Debt (Principal & Interest): SRL $ 360,782 $ 360,782 $ 360,783 $ 360,782 $ 360,782 $ 360,782 $ 360,783 $ 360,782 $ 360,782 $ 360,783 $ 360,782 SRL $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 $ 293,085 SRL $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 $ 671,188 SRL 202P $ 195,334 $ 195,335 $ 195,334 $ 195,334 $ 195,335 $ 195,334 $ 195,334 $ 195,334 $ 195,334 $ 195,334 $ 195,334 SRL $ $ 110,416 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 $ 220,833 SRL DW $ 218,808 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 $ 437,615 SRL WW $ $ 223,163 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 $ 446,325 SRL DW $ $ 3,962 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 $ 7,924 Cumulative New SRF Loan Debt for Additional Borrowings $ $ $ 149,736 $ 211,208 $ 296,673 $ 296,673 $ 632,803 $ 712,957 $ 734,723 $ 1,012,945 $ 1,038,365 SunTrust Letter of Credit (Principal & Interest): Suntrust Letter of Credit Draw #1 $ 150,450 $ 151,775 $ 152,950 $ 149,050 $ 150,075 $ 150,950 $ 36,803 $ $ $ $ Suntrust Letter of Credit Draw #2 $ $ $ $ $ $ $ $ $ $ $ Suntrust Letter of Credit Draw #3 $ 68,280 $ 67,660 $ 68,010 $ 67,300 $ 67,560 $ 67,760 $ 67,900 $ 67,980 $ $ $ Suntrust Letter of Credit Draw #4 $ 87,725 $ 83,875 $ 84,850 $ 80,650 $ 81,275 $ 76,725 $ 72,175 $ 72,450 $ $ $ Suntrust Letter of Credit Draw #5 $ 52,794 $ 55,194 $ 52,394 $ 49,594 $ 51,594 $ 48,394 $ 45,194 $ 46,727 $ $ $ Total Bond/Debt Service Expenses $ 6,668,415 $ 7,224,619 $ 8,224,090 $ 8,986,925 $ 10,117,887 $ 11,751,955 $ 13,487,992 $ 14,349,440 $ 14,850,899 $ 15,818,332 $ 16,452,903 Total Utility System Cash Outflows from Budget $ 50,069,581 $ 50,285,147 $ 52,739,830 $ 55,175,731 $ 58,079,000 $ 61,591,934 $ 65,314,101 $ 68,276,551 $ 71,002,127 $ 74,325,725 $ 77,458,198 Projected O&M Reduction from Budget $ (1,518,903) $ (1,585,105) $ (1,654,763) $ (1,728,009) $ (1,805,356) $ (1,887,097) $ (1,973,547) $ (2,065,053) $ (2,161,986) $ (2,264,754) $ (2,373,797) Projected Annual Cash Outflow $ 48,550,678 $ 48,700,042 $ 51,085,068 $ 53,447,722 $ 56,273,644 $ 59,704,837 $ 63,340,553 $ 66,211,498 $ 68,840,141 $ 72,060,971 $ 75,084,401 (1) Annual PaymentInLieuOfFranchise Fee transfers out are calculated as 6% of Net Operating Income. (2) Per discussions with staff, it is assumed in the analysis that $7.2 million of Net Operating Income will be transferred out annually to the General Fund ($3.6 million) and to the Capital Project Fund ($3.6 million). 78

84 Schedule 6 Approved Plan: FAMSXL Control Panel APPENDIX D 79