RES 97030 - Laserfiche WebLink

Sewer Maintenance & Operating (M & O) Fund Appendix B (page 18) contains a recap of staff recommended budget amendments for the Sewer Division in 1996-97. Actual ending fund balance last June 30, 1996 was $1.03 million. Projected ending fund balance for the year ending June 30, 1997 is $1.22 million. However, most of the Fund Balance represents restricted debt service reserves ($723,000). The portion of the Fund Balance which relates to M & O was only $311,000 on June 30, 1996, and is projected to be $492,000 on June 30, 1997. In order to maintain a 10% contingency and allow for a one to two month cash flow, the M & O portion should have a balance of at least $1.2 - $1.8 million. Through the rate review process, staff will be recommending that we gradually increase this reserve to a more optimal level. ALL OTHER OPERATING FUNDS Most Funds reflect an increase in interest earnings projections, with few other revenue changes. The most significant expenditure and other changes are outlined below and shown in appendix B, page 18. Internal Service Funds A transfer of $500,000 from the General Fund (from the PERS credit) is recommended to the Workers' Comp Reserve Fund ($100,000) and the Retirees' Medical Reserve Fund ($400,000). As staff has indicated in earlier reports to Council, staff will be gradually increasing credits to the Retirees' Medical and Workers' Comp Reserves over the next two to four years to bring their balances to optimal levels. This approach is similar to the one used to phase replacement accrual funding into the Utility Funds. Staff is recommending that the savings in the General Fund from electricity costs for street lights be used to make another payment to the Equipment Replacement Fund in the amount of $100,000 and to establish a Street Light Replacement Fund with a transfer of $100,000. These savings resulted from the City initiating the process of acquiring its street lights from PG&E. The Equipment Replacement Fund advanced $490,000 for the initial condemnation deposit. In 1995-96, the General Fund repaid $75,000; therefore, with this payment in 1996-97, the balance owed by the General Fund to the Equipment Replacement Fund will be $315,000. Staff will be recommending the use of future electricity cost savings to make additional loan repayments and contributions to the Replacement Fund in the upcoming two year budget. An additional $60,000 in expenditures for facility repairs, vehicles and equipment, and assessment district legal services is included in the other Internal Service Funds. A refund of $161,000 from the City's insurance pool is reflected in the Self-Insurance Retention Fund. SR97:110 11