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water utility's costs and not the expected impact to each customer class. Revenue adjustments in subsequent years are applied across all charges,classes,and tiers proportional to the base year rates developed for FY 2024.The revenue adjustments are effective on January 1 of every year. Tah+- 2 19: Prop:sed Revenue Adjustrr—t—, Revenue AdIFY2026 Effective Month January January January Percent Adjustment 30%20%12% Table 2-20 shows the projected financial plan with the proposed revenue adjustments in Table 2-19 applied to the water rate revenues. Revenues from interest income(Lines 8 and 9)are greater than those shown in the status quo scenario(Table 2-18, Lines 8 and 9)due to additional cash from the proposed adjustments. O&M expenses(Line 18),debt service(Lines 21 and 22),and cash funded CIP(Lines 23 and 24)are the same as the status quo scenario. Net cash flow(Line 27)is positive in FY 2025 and beyond which means that the city will be funding its reserves in those years.Net cash flow is negative in FY 2024,which means that the City will be drawing down its water fund to pay for capital costs. The combined ending balance(Line 46)will not meet the reserve target(Line 47)in FY 2024 and FY 2025. The City recovers its reserves and meets the reserve target by FY 2026. Calculated debt service coverage(Line 31)exceeds target debt service coverage(Line 32)in all years through FY 2026. 28 CITY OF PLEASANTON