CC 2015-01-27_08c Annual Report_Water Sewer Fees and ChargesMEMORANDUM
TO: CITY COUNCIL
FROM: DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES~
SUBJECT: CONSIDERATION OF ANNUAL FINANCIAL REPORT -FISCAL YEAR
2013-14 RECEIPT AND USE OF WATER AND SEWER CAPACITY AND
CONNECTION FEES/CHARGES
DATE: JANUARY 27, 2015
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, 2014. 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 CAPACITY AND CONNECTION FEES-ANNUAL REPORT
JANUARY 27, 2015
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, 2013 to June 30, 2014.
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 Sections 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.
• 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 volatility in development activity in recent years, new revenue in these funds
has been unpredictable. This has required adjustments to projections for future capital
improvement projects.
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
-Approve staff recommen~ation and accept the report;
Do not approve staff recommendation;
Modify staff recommendation and approve;
Provide direction to staff.
Item 8.c. - Page 2
CITY COUNCIL
WATER AND SEWER CAPACITY AND CONNECTION FEES-ANNUAL REPORT
JANUARY 27, 2015
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.
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 22, 2015. The
Agenda and report were posted on the City's website on Friday, January 23, 2015. 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, 2014
Sewer Water Water
Facility Facility Availability
Revenues:
Interest Income $ 2,092 $ 4,240 $ 9,394
Sewer Facility Charges 22,676
Water Main Charges
Distribution Charges 37,849
Water Availability Charges 44,900
Total Revenues 24,768 42,089 54,294
Expenditures
Operating Expenses
Excess of Operating Revenues Over
Operating Expenditures 24,768 42,089 54,294
Other Financing Uses
Capital Transfers Out (33,000) (15, 187)
(33,000) (15,187)
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses (8,232) 42,089 39,107
Fund Balance, Beginning of Year 384,178 778,555 1,744,578
Fund Balance, End of Year $ 375,946 $ 820,644 $ 1,783,685
Item 8.c. - Page 4
CITY OF ARROYO GRANDE
Water and Sewer Development Fees and Charges
Sewer Facility Transfers
Fiscal Year 2013-14 Completed Work Transfers
N. Rena Sewer Relocation $ 33,000
Total Capital Transfers $ 33,000
Future Fiscal Year Project(s) Transfers
Old Ranch Road Property Improvements $ 30,000
Total Funding for Future Projects $ 30,000
Water Facility Transfers
Fiscal Year 2013-14 Completed Work Transfers
$
Total Capital Transfers $
Future Fiscal Year Project(s) Transfers
Old Ranch Road Property Improvements $ 30,000
LePoint Area Main Upgrade 342,050
Leanna Drive Creek Crossing Upgrade 175,800
Reservior No 7 Construction 377,600
Total Funding for Future Projects $ 895,450
Water Availability Transfers
Fiscal Year 2013-14 Completed Work Transfers
Water Well No 11 Facilities 15, 187
Total Capital Transfers $ 15, 187
Future Fiscal Year Project(s) Transfers
Water Well No. 11 Facilities 206,610
Total Funding for Future Projects $ 206,610
% of Project
50%
% of Project
19%
% of Project
% of Project
19%
50%
35%
43%
% of Project
5%
% of Project
72%
ATTACHMENT 1
% Project is
Complete
100%
% Project is
Complete
% Project is
Complete
28%
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