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CC 2014-01-14_08.c. Annual Financial Report 2012-13MEMORANDUM TO: CITY COUNCIL FROM: DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES~ SUBJECT: CONSIDERATION OF ANNUAL FINANCIAL REPORT -FISCAL YEAR 2012-13 RECEIPT AND USE OF WATER AND SEWER CAPACITY AND CONNECTION FEES/CHARGES DATE: JANUARY 14, 2014 RECOMMENDATION: It is recommended the City Council 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. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: No outside funding is required. . > No or minimal future staff time is projected. BACKGROUND: Government Code Section 66013 requires a financial accounting of the transactions dealing with water and sewer capacity and connection fees and charges (development impact fees) shall be made available to the public. The basic accounting and reporting responsibilities under the Government Code 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 moneys in the fund; 3. The amount of charges/fees collected in the fiscal year; 4. The public improvements on which charges/fees were expended; 5. The percentage of the total cost of the public improvements that were funded by these charges/fees;· 6. The completed public improvements on which charges/fees were expended; 7. Each public improvement that is anticipated to be undertaken in the current fiscal year. Attached to this staff report is the financial information (Attachment 1) as required by Government Code Section 66013 as of June 30, 2013. The information consists of beginning and ending fund balances for each fee charged by the City, including interest Item 8.c. - Page 1 CITY COUNCIL WATER AND SEWER DEVELOPMENT IMPACT FEES-ANNUAL REPORT . JANUARY 14, 2014 PAGE2 earned and details of all expenditures made from these sources. The information provided is consistent with the financial records. Pursuant to Government Code Section 66013, this report is for review purposes only. 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 faCility 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 Attachment A is presented in a format consistent with the annual audit of the Fiscal Year from July 1, 2012 to June 30, 2013. The following is a description of the City funds used to track water and sewer connection and capacity fees and charges: • Water Facility (Fund 642) Water Main Charges, enacted pursuant to the provision of Section 13.04.050 of the City Municipal Code, are accounted for in the Water Facility Fund. These revenues are to be used for future water infrastructure improvements. • Sewer Facility (Fund 634) Sewer Connection fees, enacted pursuant to the provision of Section 13.12.190 et seq. of the City Municipal Code, is collected to help pay for improvements and future sewer system capacity as necessary to meet the needs of the City resulting from growth and expansion. e Water Availability Fund (Fund 241) This fund is used to account for the accumulation of water availability charge revenues. This charge was enacted pursuant to the provision of Section 387 43 of the Government Code, and Section 13.04.040 of the City Municipal Code. Due to the substantial reduction in development activity, new revenue in these funds has decreased in recent years. This has required adjustments to projections for future capital improvement projects. ALTERNATIVES: The following alternatives are provided for City Council consideration: -Approve staff recommendation and accept the report; Do not accept staff recommendation; Modify staff recommendation and approve; Provide direction to staff. Item 8.c. - Page 2 CITY COUNCIL WATER AND SEWER DEVELOPMENT IMPACT FEES-ANNUAL REPORT JANUARY 14, 2014 PAGE3 ADVANTAGES: By accepting the Water and Sewer Development Impact Fees-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 (development impact fees) shall be made available to the public. c DISADVANTAGES: There are no disadvantages in relation to the recommended action. ENVIRONMENTAL REVIEW: No environmental. review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted in front of City Hall on Thursday, January 9, 2014. The Agenda and report were posted on the City's website on Friday, January 10, 2014. No public comments were received. · Attachment: 1. Statement of Fund Balances for Water and Sewer Development Fees and Charges Item 8.c. - Page 3 ATTACHMENT 1 CITY OF ARROYO GRANDE Water and Sewer Development Fees and Charges Statement of Revenues, Expenditures and Changes in Fund Balances Fiscal Year Ended June 30, 2013 Sewer Water Water Facility Facility Availability Revenues: Interest Income $ 1,371 $ 2,935 $ 6,916 Sewer Facility Charges 53,983 Water Main Charges 5,469 Distribution Charges 46,360 Water Availability Charges 51,850 Total Revenues 55,354 54,764 58,766 Expenditures Operating Expenses Excess of Operating Revenues Over Operating Expenditures 55,354 54,764 58,766 Other Financing Uses Capital Transfers Out (2,546) (528) (47,704) (2,546) (528) (47,704) Excess of Revenues Over (Under) Expenditures and Other Financing Uses 52,808 54,236 11,062 Fund Balance, Beginning of Year 331,370 724,319 1,733,516 Fund Balance, End of Year $ 384,178 $ 778,555 $ 1,744,578 Item 8.c. - Page 4 CITY OF ARROYO GRANDE Water and Sewer Development Fees and Charges Fiscal Year 2012-13 Completed Work Lift Station No 3 Replacement Total Capital Transfers Fiscal Year 2013-14 Current Projects N. Rena Sewer Relocation Total Funding for Current Projects Fiscal Year 2012-13 Completed Work Reservoir No 6 Construction Total Capital Transfers Fiscal Year 2013-14 Current Projects LePoint Area Main Upgrade Leanna Drive Creek Crossing Upgrade Reservior No 7 Construction Total Funding for Current Projects Fiscal Year 2012-13 Completed Work Lopez Spillway Feasibility Study Water Well No 11 Facilities Total Capital Transfers Fiscal Year 2013-14 Current Projects Water Well No. 11 Facilities Total Funding for Current Projects Sewer Facility Transfers Transfers $ 2,546 $ 2,546 Transfers $ 33,000 $ 33,000 Water Facility Transfers Transfers $ 528 $ 528 Transfers 342,050 175,800 377,600 $ 895,450 Water Availability Transfers Transfers 3,977 43,727 $ 47,704 Transfers 221,797 $ 221,797 % of Project 1% % of Project 50% % of Project 0% % of Project 50% 35% 43% % of Project 12% 15% % of Project 78% ATTACHMENT 1 % Project is Complete 100% % Project is Complete 100% % Project is Complete 100% 22% Item 8.c. - Page 5 THIS PAGE INTENTIONALLY LEFT BLANK Item 8.c. - Page 6