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Table 6. Water/Recycled Water O&M Funds — Amended Budget vs. Actual
<br /> FY 2018/19 FY 2018/19
<br /> Water+ Recycled Water(O&M) Midyear Actual Variance Variance%
<br /> Beginning Balance, July 1 $11,596.506 $11,596.506 $0 0.0%
<br /> Revenues 29,636,741 27,273,293 (2,363,448) -8.0%
<br /> Net Transfers (1,432.000) (1,814,376) (382,376) 26.7%
<br /> Expenses
<br /> Zone 7 Purchased Water (16,000,000) (14,040,043) 1,959,957 -12.2%
<br /> All other expenses (9,474.728) (8,298,276) 1,176,452 -12.4%
<br /> Total Expenses (25,474,728) (22,338,319) 3,136,409 -12.3%
<br /> Net Income $2,730,013 S3.120,598 $390,585 14.3%
<br /> Ending Balance, June 30 $14,326,519 $14,717,104 $390,585 2.7%
<br /> Sewer Operations and Maintenance (0 & M) and Debt Funds. As shown in Table 7,
<br /> the Sewer Operating Fund ended FY 2018/19 with an operating fund balance of $7.5
<br /> million which is $141,580 less than the amount included in the FY 2018/19 Amended
<br /> Budget. The recommended fund balance of $7.5 million equals 56 percent of the Sewer
<br /> Fund's actual FY 2018/19 operating expenses and 50 percent of the Sewer Fund's FY
<br /> 2019/20 operating budget. The operating reserve policy adopted by City Council in
<br /> November 2016 requires reserves equal to between 30 percent and 40 percent of
<br /> operating expenses with a target of 35 percent. Thus, operating reserves exceed the
<br /> maximum required reserves. However, it's important to note that excess reserves will be
<br /> available to fund future CIP projects. The Operations Services Department (OSD) is
<br /> embarking on a comprehensive asset management plan for the water and sewer
<br /> system that should be complete in approximately four years. Staff expects that
<br /> implementing the projects that the sewer asset management plan identifies will
<br /> necessitate increasing CIP allocations beyond the current levels. Drawing down surplus
<br /> reserves to cover those increased CIP expenses will mean lower future rate increases.
<br /> The variance is due to actual revenues exceeding the Midyear budget by $54.663 or 0.4
<br /> percent. In addition, expenditures were greater than the budget by $218,551 due to
<br /> actual Dublin San Ramon Services District (DSRSD) sewer treatment fees exceeding
<br /> budget by $147,647 and the City's Sewer Fund net operating expenses exceeding
<br /> budget by $70,904, which is the result of allocating $179,000 of Sewer Funds to the
<br /> City's Section 115 Pension Trust fund that staff neglected to include in the FY 2018/19
<br /> budget.
<br /> Page 7 of 11
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