Categories: Major project, utility optimization, general fund support
Drivers: Fresno faced multiple challenges when Table Rock performed its analysis. The city was still recovering from the recession, and facing potential bankruptcy. There had been a reduction in the number of city employees from 4,000 to 3,000, the city’s credit rating was downgraded, and the annual budget deficit exceeded $10 million for several years. To add to those challenges, the city need to make significant investments in the city’s water system including a major new water treatment plant to reduce the city’s reliance on dwindling groundwater resources.
Partnership Analysis: Table Rock tailored a partnership solution to Fresno’s needs that would provide an upfront payment of $50 million to restore the city’s reserves, an annual $8.5 million lease payment to stabilize the city budget, and $410 million in capital improvement project funding in the water utility. All of this could be accomplished for the same 97% rate increase that the city had previously implemented just to fund the water infrastructure improvements. In effect, the partnership provided over $300 million in additional value for the same rate increase.