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Improvements Program and how that program will be financed (rates, impact fees, utility revenue reserves, etc . ). The County' s LDRs may need to be amended to reflect the zoning categories which may require the installation of reuse infrastructure as a condition of development approval . Once again, the economic driver and timing associated with the need for reuse expansion will help direct and define the changes that are necessary in the County ' s LDRs. The County' s reuse ordinance will also need to be revised to reflect the proposed Reuse Service Areas and the proposed reuse rate structure which may also influence the ordinances establishing the water and wastewater rate structures . Subtask 4.4 — Financing Strategies and Rate Structure Alternatives. Meet with County staff, and the County' s financial advisor, if directed, to identify potential options for funding of reclaimed water system improvements. Strategies to be considered include, but are not necessarily limited to, the following : • Bonding/debt — Because it is most feasible to serve new customers with water reuse rather than retrofit the existing developed areas, a debt strategy which is based on the principle that the infrastructure will serve future customers and so the payments should be made by future customers has merit. The utility' s debt capacity must be determined to ensure that a debtibonding strategy will not hamper the utility' s ability to continue to conduct their business and effectively serve their customer base. Types of debt instruments and their feasibility for use will be analyzed in this task. • Pay-As-You-Go A cash strategy utilizes cash reserved and cash flow generated by existing utility customers. It can be theorized that the existing customers have received the benefit of using the limited supply of potable water and wastewater treatment capacity and the cost of using that limited resource will be used to expand the capacity of the system to continue to serve others entering the system . Once new customers are being served, they too will begin to pay into the cash reserves to be used to further expand the system. This type of strategy will likely result in the slower implementation of a master reuse system, however, the needs analysis will determine if this is acceptable. • Cash and Debt Combination — A financing strategy that combines debt and cash could be a feasible approach to implementing the master reuse system expansion plan. This type of strategy will be investigated as one of the possible financing alternatives . Each of the financing strategies identified will be evaluated with respect to applicability for reclaimed water infrastructure projects in Indian River County. The advantages and disadvantages of each strategy will be presented in the Technical Memorandum in Subtask 4 . 5 and discussed at the workshop meeting in Subtask 4. 6. S:A041077.003VIRC Reclaimed Water System Implementation PlanAAttachment I .doc October I , 2005