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Enterprise Funds
<br /> Water Fund
<br /> Revenues from water sales are expected to increase by approximately one percent in FY 2019/20
<br /> and increase by six percent in FY 2020/21, mainly attributable to Zone 7 and City of Pleasanton
<br /> rate increases. Expenses in the Water Fund are estimated to increase overall by 28 percent in FY
<br /> 2019/20 and increase by five percent in FY 2020/21.The increase in FY 2019/20 is primarily related
<br /> to a newly created Water Repair and Replacement Fund that will be used to fund annual repair
<br /> and replacement projects for the Water Enterprise that had been budgeted in the Water CIP fund.
<br /> As required by accounting standards,the City budget expenses allocations to the Repair and
<br /> Replacement funds as opposed to transferring the funds out as it does for CIP funds.There is also
<br /> $127,000 included in a contingency account to fund up to 3.0 FTE positions: Instrument Technician
<br /> and 2.0 FTE Utility Operators.The cost of the three positions is shared equally with the Sewer
<br /> Operating Fund.The City Manager will decide during the year whether to fill any of those positions.
<br /> There is also an increase of$2.3 million in net transfers out to fund water enterprise projects in the
<br /> CIP.
<br /> The increase in FY 2020/21 is primarily attributed to increased cost of water purchased from
<br /> Zone 7.The Zone 7 Water Agency is the water wholesaler for the Livermore-Amador Valley,which
<br /> purchases,treats,and delivers water to the cities of Pleasanton and Livermore, Dublin San Ramon
<br /> Services District (DSRSD),and the California Water Service Company (serving parts of Livermore).
<br /> The Water Operating Fund is expected to end FY 2019/20 with an operating fund balance of $12.4
<br /> million as shown in the table below,equaling 44 percent of the Water Fund's FY 2019/20 budgeted
<br /> operating expenses.The operating reserve policy adopted by the City Council in November 2016
<br /> targets the Water Fund operating reserves equal to 35 percent of operating expenses. Thus,
<br /> operating reserves exceed the target.
<br /> The City receives 80%of its water supply from Zone 7 and the other 20%from City-owned and
<br /> operated wells.The following table summarizes the Water Operations and Maintenance Fund for
<br /> the four years ending FY 2020/21.
<br /> Actual Mid-Year Projected Projected
<br /> Water/Recycled Water(O&M)
<br /> 2017/18 2018/19 2019120 2020 21
<br /> Beginning Balance,July 1 $12,346,487 $11,596,506 $14,326,519 $12,390,601
<br /> Revenues 28,399,721 29,636,741 29,927,741 31,801,241
<br /> Net Transfers (5,166,386) (1,432,000) (3,723,129) (3,266,129)
<br /> Expenses
<br /> Zone 7 Purchased Water 14,590,711 16,000,000 16,100,000 17,500,000
<br /> All other expenses 9,392,604 9,474,728 12,040,530 12,062,523
<br /> Total Expenses 23,983,315 25,474,728 28,140,530 29,562,523
<br /> ($749,9811 $2,730,013 ($1,935,918) ( n27
<br /> Ending Balance,June 30 $11,596,506 $14,326,519 $12,390,601 $11,363,190
<br /> 37 City of Pleasanton Operating Budget • FY 2019/20 - FY 2020/21
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