08d FY 10-12 Annual Report Water & Sewer Connection FeesMEMORANDUM
TO: CITY COUNCIL
FROM: ANGELA KRAETSCH, DIRECTOR OF ADMINISTRATIVE SERVICE
SUBJECT: CONSIDERATION OF ANNUAL FINANCIAL REPORT - FISCAL YEAR
2010-11 RECEIPT AND USE OF WATER AND SEWER CAPACITY AND
CONNECTION FEESICHARGES
DATE: JANUARY 10,2012
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 6601 3.
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 chargeslfees 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 chargeslfees collected in the fiscal year;
4. The public improvements on which chargeslfees were expended;
5. 'The percentage of the total cost of the public improvements that were funded by
these chargeslfees;
6. The completed public improvements on which chargeslfees 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, 201 1. The information consists of
beginning and ending fund balances for each fee charged by the City, including interest
Agenda Item 8.d.Page 1
CITY COUNCIL
WATER AND SEWER DEVELOPMENT IMPACT FEES-ANNUAL REPORT
JANUARY 10,2012
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
6601 3, 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, 2010 to June 30, 201 1.
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.
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 substantial reduction in development activity, new revenue in these funds
has decreased. 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.
Agenda Item 8.d.Page 2
CITY COUNCIL
WATER AND SEWER DEVELOPMENT IMPACT FEES-ANNUAL REPORT
JANUARY 10,2012
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 a financial
accounting of the transactions dealing with water and sewer capacity and connection
fees and charges (development irr~pact 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 5, 2012. The
Agenda and report were posted on the City's website on Friday, January 6, 2012. No
public comments were received.
Attachment:
1. Statement of Fund Balances for Water and Sewer Development Fees and
Charges
Agenda Item 8.d.Page 3
ATTACHMENT I
CITY OF ARROYO GRANDE
Water and Sewer Development Fees and Charges
Statement of Revenues, Expenditures and Changes in Fund Balances
Fiscal Year Ended June 30.201 1
Sewer Water Water
Facility Facility Availability
Revenues:
Interest l ncome
Sewer Facility Charges
Distribution Charges
Water Availability Charges
Expense Recovery
Total Revenues
Expenditures
Operating Expenses
Excess of Operating Revenues Over
Operating Expenditures
Other Financing Uses
Capital Transfers Out
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses
Fund Balance, Beginning of Year
Fund Balance, End of Year
Agenda Item 8.d.Page 4
ATTACHMENT 1
CITY OF ARROYO GRANDE
Water and Sewer Development Fees and Charges
Sewer Facility Transfers
Fiscal Year 201 1-12 Current Projects Transfers % of Project
The Pike Sewer Upgrade $ 50,000 42 %
Lift Station No 3 Replacement
Total Funding for Current Projects $ 100,000
Water Facility Transfers
Fiscal Year 201 0-1 1 Completed Work Transfers % of Project % Complete
Reservoir No 6 Construction $ 53,073 6% 6%
Water Well No 10 144,177 22% 80%
Total Capital Transfers $ 197,250
Fiscal Year 201 1-12 Current Projects Transfers % of Project
Reservoir No 6 46,389 5%
Waterline Upgrade-Bell St & Faeh Ave 25,000 9%
Reservior No 7 Construction 200,000 22%
Total Funding for Current Projects $ 271,389
Water Availability Transfers
Fiscal Year 201 0-1 1 Completed Work Transfers % of Project % Complete
Water Well No 10 $ 134,880 20% 20%
Lopez Spillway Feasibility Study 6,752 22% 23%
Water Well No 1'1 Facilities
Total Capital Transfers
Fiscal Year 201 1-1 2 Current Projects Transfers % of Project
Lopez Spillway Feasibility Study $ 23,236 77%
Water Well No. 1 1 Facilities 266,343 93%
Total Funding for Current Projects $ 289,579
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