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Sewer Operations and Maintenance (0 & M) and Debt Funds
<br /> The Sewer Operating Fund ended 2013/14FY with a positive operating balance of
<br /> $373,409 as shown in Table 7. Staff had projected a slight operating profit at Midyear
<br /> of $7,121. The majority of the variance was due to an increase in sewer revenues from
<br /> the addition of the Continuing Life Care project at Staples Ranch and an offsetting
<br /> increase in payments to DSRSD for regional sewer charges. As a result of this, the
<br /> ending fund balance has increased to approximately $4.181 million. The adopted sewer
<br /> rates effective September 1, 2010 included an annual CPI adjustment for local
<br /> collection fees. The rates were designed to maintain the Sewer Operating Fund in a
<br /> balanced operating position with a minimum fund balance of $3.5 million. Staff is
<br /> pleased to see that operations are continuing to be stabilized and that the minimum
<br /> fund balance has been exceeded. Staff will continue to monitor the revenues and
<br /> expenditures of the Sewer operations. Like the water rates, the next sewer rate review
<br /> (local collection system rates only) will need to be adopted by the City Council no later
<br /> than September 2015 as a result of Proposition 218 requiring all fees and charges with
<br /> a CPI adjustment to be reviewed every five years. Finally, the recommended year-end
<br /> budget adjustments ($25,361) are for an increase in the Repair and Replacement
<br /> Reserves and the worker's compensation reserves for the water operations.
<br /> Table 7. Sewer O&M and Debt Funds —Amended Budget vs. Actual
<br /> Year-End
<br /> Recommended Year-End
<br /> Amended Budget Recommended
<br /> Sewer O&M/Debt Rinds Budget Actual $Variance Adjustments Actual
<br /> Beginning Fund Balance $3,807,331 $3,807,331 $0 $3,807,331
<br /> Plus Revenues 13,009,616 13,617,587 607,971 13,617,587
<br /> Less Net Transfers (1,084,007) (1,096,303) (12,296) (1,096,303)
<br /> Less Expenditures (11,918,488) (12,122,514) (204,026) ($25,361) (12,147,875)
<br /> Ending Fund Balance $3,814,452 $4,206,101 $391,649 ($25,361) $4,180,740
<br /> Change in Fund Balance $7,121 $398,770 $391,649 ($25,361) $373,409
<br /> CALLIPPE PRESERVE GOLF COURSE OPERATING FUND
<br /> The Callippe Preserve Golf Course operating fund ended the year with a positive
<br /> operating balance of $268,227 as shown below in Table 8. These excess funds from
<br /> operations were transferred to the General Fund to repay the golf course loan (originally
<br /> $10 million; as of June 30, 2014 the remaining balance is $6.884 million). The most
<br /> notable activity that occurred in the 2013/14FY for the golf course was the
<br /> reconstruction of two greens for improved playability of the course. However, this
<br /> resulted in a decrease in rounds played while the course was under construction. The
<br /> golf course manager, CourseCo., was able to reduce expenditures by an equal amount
<br /> in 2013/14FY to offset the loss in revenues. However, staff is concerned that for the
<br /> 2014/15FY this will not be possible and for the first time in the history of the operation of
<br /> the golf course (opened in 2005) the course operations may incur an operating loss due
<br /> to the construction activity and the playability of the course. Staff is monitoring this
<br /> issue and will provide an update to the Council at the MidYear Budget Review in March
<br /> 2015.
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