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Table 6. Water/Recycled Water O&M Funds — Amended Budget vs. Actual
<br /> FY 2019/20 FY 2019/20
<br /> Water+ Recycled Water(O&M) Revised Actual Variance Variance%
<br /> Beginning Balance, July 1 $13,753,773 $13,753,773 $0 0.0%
<br /> Revenues 29,992,741 30,104,916 112,175 0.4%
<br /> Net Transfers (4,692,815) (4,638,203) 54,612 -1.2%
<br /> Expenses
<br /> Zone 7 Purchased Water (16,100,000) (16,943,894) (843,894) 5.2%
<br /> All other expenses (11,076,627) (8,985,234) 2,091,393 -18.9%
<br /> Total Expenses (27,176,627) (25,929,128) 1,247,499 -4.6%
<br /> Net Income ($1,876,701) ($462,415) $1,414,286 -75.4%
<br /> Ending Balance, June 30 $11,877,072 $13,291,358 $1,414,286 11.9%
<br /> Sewer Operations and Maintenance (0 & M) and Debt Funds. As shown in Table 7,
<br /> the Sewer Operating Fund ended FY 2019/20 with an operating fund balance of
<br /> approximately $9 million which is $1.1 million more than the amount included in the FY
<br /> 2019/20 Amended Budget. The recommended fund balance of$9 million equals 67
<br /> percent of the Sewer Fund's actual FY 2019/20 operating expenses. The operating
<br /> reserve policy adopted by City Council in November 2016 requires reserves equal to
<br /> between 30 percent and 40 percent of operating expenses with a target of 35 percent.
<br /> Thus, operating reserves exceed the maximum required reserves. However, it's
<br /> important to note that excess reserves will be available to fund future CIP projects. The
<br /> Operations Services Department (OSD) is embarking on a comprehensive asset
<br /> management plan for the water and sewer system that should be complete in
<br /> approximately four years. Staff expects that implementing the projects that the sewer
<br /> asset management plan identifies will necessitate increasing CIP allocations beyond the
<br /> current levels. Drawing down surplus reserves to cover those increased CIP expenses
<br /> will mean lower future rate increases.
<br /> The variance is primarily due to not expending $1,172,500 from the Sewer Repair and
<br /> Replacement Fund and $132,396 in attrition savings that is off-set by (1) actual
<br /> revenues less than the Midyear budget by $104,618 or 0.7 percent, (2) $101,183 actual
<br /> Dublin San Ramon Services District (DSRSD) sewer treatment fees exceeding budget,
<br /> and (3) net transfer out exceeding budget by $9,877.
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