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Home My WebLink AboutCC 2025-01-14_09c AFR for FY 23-24 Water and Sewer Capacity F PRROYO ° C11 '1 tN CORPORATED -5 * JULY 10, 1911 * C44IFOJ MEMORANDUM TO: City Council FROM: Nicole Valentine, Director of Administrative Services SUBJECT: Annual Financial Report for Fiscal Year 2023-24 — Receipt and Use of Water and Sewer Capacity and Connection Fees/Charges DATE: January 14, 2025 RECOMMENDATION: 1) Receive and file the annual report of the receipt and use of water and sewer capacity and connection fees and charges, in compliance with Government Code Section 66013; and 2) Determine that ratifying the annual report is not a project subject to the California Environmental Quality Act ("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.). IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: There is no direct financial impact from the status report other than the staff time required to prepare it, which is estimated at 2 hours. During FY 2023-24, the Water Facility Fund balance increased by $67,540. The Sewer Facility Fund balance increased by $32,205. The Water Availability Fund increased by $32,184. BACKGROUND: Government Code Section 66013 requires an annual financial accounting of the transactions dealing with water and sewer capacity and connection fees and charges. The basic accounting and reporting responsibilities under Government Code Section 66013 require the following: 1. A description of the charges/fees deposited in the fund; 2. The beginning and ending balance of the fund and any interest earned from investment of monies in the fund; 3. The amount of charges/fees collected in the fiscal year; 4. An identification of all of the following: a. Public improvement charges expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the Item 9.c. Page 51 of 190 City Council Annual Financial Report for Fiscal Year 2023-24 — Receipt and Use of Water and Sewer Capacity and Connection Fees/Charges January 14, 2025 Page 2 public improvements that were funded by these charges/fees if more than one source of funding was used; b. The public improvements on which charges/fees were expended that was completed during the fiscal year; c. Each public improvement that is anticipated to be undertaken the following fiscal year. 5. A description of each interfund transfer or loan made from the capital facilities fund. In the case of an interfund transfer, identify the public improvements the transferred moneys are, or will be, expended. In the case of an interfund loan, the date the loan will be repaid and the rate of interest the fund will receive on the loan. Attached to this staff report is the financial information (Attachments 1-3) required by Government Code Section 66013 and current as of June 30, 2024. The information consists of beginning and ending fund balances for each fee charged by the City, including interest earned and details of all expenditures made from these sources. Information within this report and Attachments 1-3 meet the requirements of Government Code section 66013. ANALYSIS OF ISSUES: The City utilizes fund accounting to segregate development-related fees from other City revenues. Although the City pools its cash for investment purposes, interest income is allocated to the funds based on their respective cash balances. The City accounts for water and sewer connection and capacity fees or charges can be found in three separate funds - the Water Facility Fund, the Sewer Facility Fund, and the Water Availability Fund. The information in Attachments 1-3 compares the revenues, expenditures, and changes in fund balances for each fund from July 1, 2014, to June 30, 2024. The following is a description of the City funds used to track water and sewer connections and capacity fees and charges: Water Facility (Fund 642) Water Main Charges, enacted pursuant to the provision of Sections 13.04.050 of the City Municipal Code, are accounted for in the Water Facility Fund. These revenues are to be collected and accumulated for future water infrastructure improvements. The Water Facility Fund has accumulated $1,107,830 in unspent connection fees. There are no projects budgeted in FY 2024-25 at this time. Sewer Facility (Fund 634) Sewer Connection fees, enacted pursuant to the provision of Section 13.12.190 et seq. of the City Municipal Code, are collected and accumulated to help pay for improvements and future sewer system capacity as necessary to meet the needs of the City resulting Item 9.c. Page 52 of 190 City Council Annual Financial Report for Fiscal Year 2023-24 — Receipt and Use of Water and Sewer Capacity and Connection Fees/Charges January 14, 2025 Page 3 from growth and expansion. The Sewer Facility Fund ended the year with a fund balance of $378,609, and the FY 2024-25 budget did not identify any projects at this time. Water Availability Fund (Fund 241) This fund is used to account for the accumulation of water availability charge revenues. The Water Availability charge was enacted pursuant to the provision of Section 38743 of the Government Code, and Section 13.04.040 of the City Municipal Code. Water availability charges are imposed upon each parcel of property not served with city water. The Water Availability Fund has a fund balance of$73,035, with no projects budgeted for FY 2024-25 at this time. ALTERNATIVES: The following alternatives are provided for the Council's consideration: 1. Receive and file the annual report of the receipt and use of water and sewer capacity and connection fees and charges, in compliance with Government Code Section 66013; and determine that ratifying the annual report is not a project subject to the California Environmental Quality Act ("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.). 2. Do not receive and file the annual report of the receipt and use of water and sewer capacity and connection fees and charges and request additional information; or 3. Provide other direction to staff. ADVANTAGES: By accepting the Water and Sewer Capacity and Connection Fees and Charges-Annual Report, the City will be complying with Government Code Sections 66013, et seq., which requires a financial accounting of the transactions dealing with water and sewer capacity and connection fees and charges to be made available to the public. DISADVANTAGES: There are no disadvantages in relation to the recommended action. ENVIRONMENTAL REVIEW: No environmental review is required for this item. Ratifying the annual report is not a project subject to the California Environmental Quality Act ("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City's website in accordance with Government Code Section 54954.2. Item 9.c. Page 53 of 190 City Council Annual Financial Report for Fiscal Year 2023-24 — Receipt and Use of Water and Sewer Capacity and Connection Fees/Charges January 14, 2025 Page 4 ATTACHMENTS: 1-3. Statement of Fund Balances for the Water Facility Fund, Sewer Facility Fund, and Water Availability Fund Item 9.c. Page 54 of 190 ATTACHMENT 1 CITY OF ARROYO GRANDE Water Facility Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balances Fiscal Years Ending June 30,2015-2024 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 Actual Actual _ Actual _ Actual Actual Actual Actual Actual Actual Actual Revenues: Interest Income $ 8,045 $ 11,944 $ 2,771 $ 4,718 $ 16,285 $ 13,958 $ 1,967 $ (14,638) $ 9,539 $ 42,936 Water Main Charges - 753 665 - 66,457 105,507 48,561 7,081 17,040 1,712 Distribution Charges 58,104 35,534 126,135 29,584 - - - - - 22,892 Total Revenues 66,149 48,231 129,571 34,302 82,742 119,465 50,528 (7,557) 26,579 67,540 Expenditures: Operating Expenses - - (2,794) - - - - - - - Excess of Revenues Over Expenditures 66,149 48,231 126,777 34,302 82,742 119,465 50,528 (7,557) 26,579 67,540 Other Financing Uses: Capital Projects (114,570) (213,000) - - - - - - - - Excess of Revenues Over (Under)Expenditures and Other Financing Uses (48,421) (164,769) 126,777 34,302 82,742 119,465 50,528 (7,557) 26,579 67,540 Fund Balance, Beginning of Year 820,644 772,223 607,454 734,231 768,533 851,275 970,740 1,021,268 1,013,711 1,040,290 Fund Balance, End of Year $ 772,223 $ 607,454 $ 734,231 $ 768,533 $ 851,275 $ 970,740 $1,021,268 $1,013,711 $1,040,290 $1,107,830 Capital Project Detail Reservoir No 6 Construction $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Old Ranch Rd Property Improveme 30,000 - - - - - - - - - Leanna Dr Creek Crossing Upgrade 84,570 - - - - - - - - - LePoint Area Main Upgrade - 38,000 - - - - - - - - Alpine Street Overlay&Waterline - 175,000 - - - - - - - - Total Capital Projects $ 114,570 $ 213,000 $ - $ - $ - $ - $ - $ - $ - $ - There are no current Capital Improvement Projects budgeted for this Fund in this budget cycle No refunds were made during FY 2023-24. Page 55 of 190 ATTACHMENT 2 CITY OF ARROYO GRANDE Sewer Facility Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balances Fiscal Years Ending June 30,2015-2024 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 Actual Actual _ Actual _ Actual Actual Actual Actual Actual Actual Actual Revenues: Interest Income $ 3,864 $ 6,328 $ 2,030 $ 3,170 $ 10,934 $ 9,579 $ (60) $ (4,717) $ 3,156 $ 14,510 Sewer Facility Charges 36,860 24,434 74,156 19,011 57,602 _ 71,251 31,209 9,441 14,458 17,695 Total Revenues 40,724 30,762 76,186 22,181 68,535 80,830 31,150 4,724 17,614 32,205 Expenditures: Operating Expenses - - - - - - - - - - Excess of Revenues Over Expenditures 40,724 30,762 76,186 22,181 68,535 80,830 31,150 4,724 17,614 32,205 Other Financing Uses: Capital Projects (30,000) - - - - (372,249) - - - - Excess of Revenues Over (Under)Expenditures and Other Financing Uses 10,724 30,762 76,186 22,181 68,535 (291,419) 31,150 4,724 17,614 32,205 Fund Balance, Beginning of Year 375,946 386,670 417,432 493,618 515,799 584,334 292,916 324,065 328,790 346,404 Fund Balance, End of Year $ 386,670 $ 417,432 $ 493,618 $ 515,799 $ 584,334 $ 292,916 $ 324,065 $ 328,790 $ 346,404 $ 378,609 Capital Project Detail Lift Station No 3 Replacement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - N. Rena Sewer Relocation - - - - - - - - - - Old Ranch Rd Property Impr 30,000 - - - - - - - - - Lift Stn No 1 Force Main Replacemi - - - - - 372,249 - - - - Total Capital Projects $ 30,000 $ - $ - $ - $ - $ 372,249 $ - $ - $ - $ - There are no current Capital Improvement Projects budgeted for this Fund in this budget cycle No refunds were made during FY 2023-24. Page 56 of 190 ATTACHMENT 3 CITY OF ARROYO GRANDE Water Availability Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balances Fiscal Years Ending June 30,2015-2024 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 Actual Actual _ Actual _ Actual Actual Actual Actual Actual Actual Actual Revenues: Interest Income $ 19,009 $ 26,303 $ 7,021 $ 10,518 $ 30,006 $ 22,571 $ 3,038 $ (22,947) $ 12,250 $ 2,434 Water Availability Charges 99,600 21,450 144,312 32,450 85,363 126,325 48,050 9,900 28,601 29,750 Expense Recovery - - - - - - - - - - Total Revenues 118,609 47,753 151,333 42,968 115,369 148,896 51,088 (13,047) 40,851 32,184 Expenditures: Operating Expenses - - (42,179) - (83,198) (41,166) - - - - Excess of Revenues Over Expenditures 118,609 47,753 109,154 42,968 32,171 107,730 51,088 (13,047) 40,851 32,184 Other Financing Uses: Capital Projects (26,115) (352,550) - (232,499) (75,035) - (5,059) (297,578) (1,291,275) - Excess of Revenues Over (Under)Expenditures and Other Financing Uses 92,494 (304,797) 109,154 (189,531) (42,864) 107,730 46,029 (310,626) (1,250,424) 32,184 Fund Balance, Beginning of Year 1,783,685 1,876,179 1,571,382 1,680,536 1,491,005 1,448,141 1,555,871 1,601,901 1,291,275 40,851 Fund Balance, End of Year $1,876,179 $1,571,382 $1,680,536 $1,491,005 $1,448,141 $1,555,871 $1,601,901 $1,291,275 $ 40,851 $ 73,035 Capital Project Detail Lopez Spillway Feasibility Study $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Water Well No 11 Facilities 26,115 352,550 - 227,957 6,654 - - - - - Well Siting Study - - - 4,542 24,396 - - - - - Well 7 Evaluation - - - - 43,985 - - - - - Central Coast Blue - - - - - - 5,059 - 1,291,275 - Total Capital Projects $ 26,115 $ 352,550 $ - $ 232,499 $ 75,035 $ - $ 5,059 $ - $1,291,275 $ - There are no current Capital Improvement Projects budgeted for this Fund in this budget cycle No refunds were made during FY 2023-24. 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