Laserfiche WebLink
$14.0 <br />cn <br />C <br />7-$12.0 <br />$10.0 <br />$8.0 <br />$6.0 <br />$4.0 <br />$2.0 <br />$0.0 <br />Figure 5. Rate Study CIP Expenses by Funding Source, FY 2026 to FY 2031 <br />FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 <br />■ Rate Funded <br />Debt Service and Coverage Ratios <br />The water utility has three outstanding debt issuances that are currently being paid by rates: the 2024 <br />Series Revenue bond, the DWSRF Well 32 Nitrate Treatment and Rehabilitation Project loan, and the <br />DWSRF Automate Metering Infrastructure (AMI) Project loan. Total annual debt payments are around <br />$4.1 million a year. Table 27 shows the water utility's annual debt payments used in this study. <br />Table 27. Rate Study Debt Service Expenses, FY 2026 to FY 20319 <br />Principal $1,044,056 $1,566,406 $1,612,125 $1,662,852 $1,718,586 $1,774,329 <br />Interest $2,132,000 $2,586,226 $2,536,383 $2,484,156 $2,457,046 $2,400,804 <br />Total Debt Service $3,176,056 $4,152,633 $4,148,508 $4,147,008 $4,175,633 $4,175,133 <br />Debt issued by the water utility also includes a requirement for revenues to exceed operating expenses. <br />The City's debt service coverage requirement under its current covenants is 125 percent, or 1.25 times <br />the operating expenses. Maintaining a healthy debt coverage ratio will help the City keep a good credit <br />rating and will allow the City to service issue debt at lower rates. Table 28 shows the current debt service <br />coverage calculation based on the revenues and expenses under current rates. <br />9 Debt service payment schedules taken from original loan agreements provided by City staff <br />City of Santa Ana - 2026 Water and Sewer Rate Study <br />21 <br />