RES 00071A - Laserfiche WebLink

Operating Reserves have been severely reduced in the last few years due to consumption being less than expected, and Zone 7 costs being higher. Therefore, it is likely that a series of rate increases will be necessary over the next several years, in order to once again build operating reserves. If levels fall too low, it may be necessary to temporarily use some of the Water Replacement Fund reserves for cash flow. Since their intended use is several years into the future, we should have ample time to recover and rebuild all the reserves. A rate study is currently underway, and the results are expected to be presented to Council in June. C. Sewer Operating Fund Net income to the Sewer Operating Fund in 2000 -01 is projected to be $318.500 Less than originally adopted. There is no change in the original projection of $9.6 million in rate revenue, however, the portion which goes to DSRSD is expected to be $400,000 more than originally projected. A sewer rate study is expected to be completed and presented to Council in June, for both the City's local system and the DSRSD regional system, including LAVWMA export costs and potential debt service on the replacement portion of the planned LAVWMA pipeline project. D. Internal Service Funds for Employee Costs As of 2000 -01, staff is proposing to fully integrate the Livermore Pleasanton Fire Department employee benefit accounting into its current intemal service fund benefit accounting system. This will result in the Employee Benefit Fund reflecting revenue from the LPFD Fund, which will offset the payments for employee benefits and other associated costs. In total, projected revenue and expenditures in the Employee Benefit Fund are expected to increase by $3.7 million, due primarily to the change in the LPFD accounting, along with increases in employee benefit costs for health care, and the benefit costs for new employees. Staff is recommending that retiree medical long -term funding contributions be increased by about $460,000, which is the approximate amount employee retirement costs were decreased. The State's Public Retirement Systems (PERS) has been reducing employer contribution rates in the last few years, due to outstanding earnings growth. These reductions are expected to be temporary, and therefore, when the 1999 00/2000 -01 budget was first adopted, staff recommended that any reductions in retirement funding be added to the Retirees Medical Reserve Funds to help reduce the unfunded portion. Therefore, with additional PERS rate reductions for fiscal year 2000 -01, staff is recommending offsetting increases in retiree medical reserve contributions. 15