CC 2016-01-12_09d Annual Report Water Sewer Fees MEMORANDUM
TO: CITY COUNCIL
FROM: DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES
SUBJECT: CONSIDERATION OF ANNUAL FINANCIAL REPORT – FISCAL YEAR
2014-15 RECEIPT AND USE OF WATER AND SEWER CAPACITY AND
CONNECTION FEES/CHARGES
DATE: JANUARY 12, 2016
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 that a financial accounting of the
transactions dealing with water and sewer capacity and connection fees and charges
(development impact fees) 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, 2015. The information consists of
beginning and ending fund balances for each fee charged by the City, including interest
Item 9.d. - Page 1
CITY COUNCIL
WATER AND SEWER CAPACITY AND CONNECTION FEES-ANNUAL REPORT
JANUARY 12, 2016
PAGE 2
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 i s
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, 2014 to June 30, 2015.
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 38743 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 recommendation and accept the report;
- Do not approve staff recommendation;
- Modify staff recommendation and approve;
- Provide direction to staff.
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CITY COUNCIL
WATER AND SEWER CAPACITY AND CONNECTION FEES-ANNUAL REPORT
JANUARY 12, 2016
PAGE 3
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 that a
financial accounting of the transactions dealing with water and sewer capacity and
connection fees and charges (development impact fees) 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 7, 2016. The
Agenda and report were posted on the City’s website on Friday, January 8, 2016. No
public comments were received.
Attachment:
1. Statement of Fund Balances for Water and Sewer Development Fees and
Charges
Item 9.d. - Page 3
ATTACHMENT 1
Sewer Water Water
Facility Facility Availability
Revenues:
Interest Income 3,864$ 8,045$ 19,009$
Sewer Facility Charges 36,860
Water Main Charges -
Distribution Charges 58,104
Water Availability Charges 99,600
Total Revenues 40,724 66,149 118,609
Expenditures
Operating Expenses - - -
Excess of Operating Revenues Over
Operating Expenditures 40,724 66,149 118,609
Other Financing Uses
Capital Transfers Out (30,000) (114,570) (26,115)
(30,000) (114,570) (26,115)
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 10,724 (48,421) 92,494
Fund Balance, Beginning of Year 375,946 820,644 1,783,685
Fund Balance, End of Year 386,670$ 772,223$ 1,876,179$
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, 2015
Item 9.d. - Page 4
ATTACHMENT 1
Fiscal Year 2014-15 Completed Work Transfers % of Project
% Project is
Complete
Old Ranch Road Property Improvements 30,000$ 19%100%
Total Capital Transfers 30,000$
Budgeted Future Fiscal Year Project(s)Transfers % of Project
Total Funding for Future Projects -$
Fiscal Year 2014-15 Completed Work Transfers % of Project
% Project is
Complete
Old Ranch Road Property Improvements 30,000$ 19%100%
Leanna Drive Creek Crossing Upgrade 84,570 35%48%
Total Capital Transfers 114,570$
Budgeted Future Fiscal Year Project(s)Transfers % of Project
-$
LePoint Area Main Upgrade 342,050 50%
Leanna Drive Creek Crossing Upgrade 91,230 35%
Reservior No 7 Construction 600,000 68%
Total Funding for Future Projects 1,033,280$
Fiscal Year 2014-15 Completed Work Transfers % of Project
% Project is
Complete
Water Well No 11 Facilities 26,115 9%37%
Total Capital Transfers 26,115$
Budgeted Future Fiscal Year Project(s)Transfers % of Project
Water Well No. 11 Facilities 206,610 72%
Total Funding for Future Projects 206,610$
Sewer Facility Transfers
Water Facility Transfers
Water Availability Transfers
CITY OF ARROYO GRANDE
Water and Sewer Development Fees and Charges
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