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Page 4 of 10 <br />Figure 1 shows the results of the Status Quo scenario in four graphs: <br />• The Revenue Requirement graph compares the revenues (lines) and expenses <br />(stacked bars). Note that the revenues and expenses are inclusive of pass-through <br />revenues for treatment costs paid to DSRSD and the City of Livermore. The pass- <br />through revenues are equal to the treatment costs. In this scenario, the City’s revenues <br />are insufficient to cover expenses. <br />• The Fund Balance graph compares the projected ending balances for the combined <br />sewer enterprise fund (green bars) and the reserve policy targets (dashed line). In this <br />scenario, the City’s combined sewer enterprise fund will be negative starting in FY <br />2028. <br />• The Debt Coverage graph compares the calculated debt coverage (blue line) and the <br />required debt coverage (dashed black line). In this scenario, the City does not have any <br />debt service, and therefore, no debt coverage requirement applies. <br />• The Capital Projects graph shows the total CIP funding by funding source. In this <br />scenario, the City will fund its sewer CIP with rates/cash (green bars). <br /> <br />Figure 1: Projected Financial Plan (Status Quo) <br /> <br /> <br />Scenario 1 - Maintain <br />The Maintain scenario is an implementation plan that offers a balanced approach of near-term <br />improvement spending versus program risk. For operations, this scenario includes costs to: <br />supplement internal inspection and flushing of sewer piping and maintenance holes with <br />contract services to document baseline conditions over the next seven years; establish a pipe <br />blockage and root control program that is compliant with new regulations; perform specialty <br />inspections and develop emergency response plans for all lift stations; enhance staff training; <br />and update/enhance vehicles and equipment that are used to monitor and maintain the sewer <br />system to reduce the risk of overflows. For capital improvements, near-term projects include <br />two pipeline capacity improvements, rehabilitation of four lift stations, complete replacement of <br />Lift Station 05, emergency generator improvements, replacement of 0.5 to 1 mile of piping per <br />Page 100 of 144