CC 2019-01-08_08d Annual Financial Report FY2017-18 Water and Sewer FeesMEMORANDUM
TO: CITY COUNCIL
FROM: NICOLE VALENTINE, ACTING DIRECTOR OF ADMINISTRATIVE SERVICES
SUBJECT: CONSIDERATION OF ANNUAL FINANCIAL REPORT – FISCAL YEAR 2017-
18 RECEIPT AND USE OF WATER AND SEWER CAPACITY AND
CONNECTION FEES/CHARGES
DATE: JANUARY 8, 2019
SUMMARY OF ACTION:
The attached report provides an accounting of fees derived from water and sewer capacity and
connection fees as required by State law.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no direct financial impact of the status report other than the staff time required to
prepare it, which is estimated at 2 hours.
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.
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) be
made available to the public annually.
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 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 amount of the expenditure for each improvement, including the percentage of the
total cost of the public improvements that were funded by these charges/fees;
Item 8.d. - Page 1
CITY COUNCIL
CONSIDERATION OF REPORT ON WATER AND SEWER CAPACITY AND
CONNECTION FEES/CHARGES
JANUARY 8, 2019
PAGE 2
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, 2018. 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. The information provided is consistent
with the financial records.
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 1 is presented in a format consistent with the
annual audit of the Fiscal Year from July 1, 2017 to June 30, 2018.
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, are 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 difficult to forecast. This has required occasional adjustments to projections for future
capital improvement projects.
Item 8.d. - Page 2
CITY COUNCIL
CONSIDERATION OF REPORT ON WATER AND SEWER CAPACITY AND
CONNECTION FEES/CHARGES
JANUARY 8, 2019
PAGE 3
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
1. Approve staff’s recommendation to receive and file the annual report;
2. Do not approve staff’s recommendation and request further information;
3. Modify staff’s recommendation and approve; or
4. Provide direction to staff.
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) 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.
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.
Attachment:
1. Statement of Fund Balances for Water and Sewer Development Fees and Charges
Item 8.d. - Page 3
ATTACHMENT 1
Sewer Water Water
Facility Facility Availability
Revenues:
Interest Income 6,574$ 9,782$ 22,039$
Sewer Facility Charges 19,011
Distribution Charges 29,584
Water Availability Charges 32,450
Total Revenues 25,584 39,366 54,489
Expenditures
Operating Expenses - - -
There were no operating expenditures.
Excess of Operating Revenues Over
Operating Expenditures 25,584 39,366 54,489
Other Financing Uses
Capital Transfers Out - - (232,499)
- - (232,499)
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 25,584 39,366 (178,010)
Fund Balance, Beginning of Year 493,618 734,231 1,680,536
Fund Balance, End of Year 519,202$ 773,597$ 1,502,526$
Fiscal Year 2017-18 Completed Work Transfers
Water Well No 11 Facilities 227,958
Well Siting Study 4,542
Total Capital Transfers 232,499$
There were no operating expenditures in FY2017-18.
We do not currently have any funding budgeted for these funds in FY2018-19
Water Availability Transfers
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, 2018
Item 8.d. - Page 4