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WATER OPERATIONS AND MAINTENANCE (O & M) AND DEBT FUNDS
<br />
<br />The Water Operating Funds ended the year with a $1.34 million excess of revenues and transfers
<br />compared to expenditures, which is $1 million more than expected. However, $46,000 of these
<br />additional funds are restricted for debt service; and about $120,000 was generated by the nickel
<br />irrigation surcharge, and will be used for landsca e water auditing and conservation programs
<br />that are currently under development. As part o~rlle 1997 water Rate review which is currently
<br />in progress, staff is reviewing carefully the reasons for the remaining surplus. Year end
<br />accounting accruals can cause some swings in the revenue, but staff believes that much of the
<br />surplus is attributable to weather and increased landscape irrigation. This increased usage may or
<br />may not be ongoing. Due to this surplus, staff will be exploring the ossibility of absorbing
<br />some or all of the pending Zone 7 rate increase of 7.35 %. City s~tP~as plans to update the
<br />Water Replacement study, so it is possible that some of this surplus will be needed for additional
<br />capital replacement funding. The June 30, 1996 ending Debt Service Fund Balance is $672,000,
<br />and the ending O & M Fund Balance is $2,273,000, for a total fund balance of $2.945 million.
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<br />SEWER OPERATIONS AND MAINTENANCE (O & M) AND DEBT FUNDS
<br />
<br />The Sewer Operatinl~ Funds ended the year with a $62,000 deficit of revenues and transfers
<br />compared to expenditures, which is $118,000 less net income than expected. Although revenues
<br />exceeded projections by $347,000, expenditures exceeded projections by $450,000, mostly due
<br />to payments to the Dublin San Ramon Services District (DSRSD) for sewage treatment costs.
<br />Therefore, staff is recommending that Council amend the 1995-96 Sewer Maintenance and
<br />Operations budget accordingly (to reflect actual rate revenue and ex enditures). The June 30,
<br />1996 ending Debt Service Fund Balances are $ 723,000, and the en~ng O & M is
<br /> Fund Balance
<br />$311,000, for a total fund balance of $1.03 million.- The O & M Fund Balance continues to be
<br />inadequate to meet cash flow requirements, which results in money being advanced from
<br />Replacement Funds to meet operatin cash flow needs. This results in less interest earnin s to
<br />the Replacement Fund, which in the ~ong term will result in it being inadequate to meet aloof its
<br />intended purposes. With the pending 1997 Sewer Rate Study and update of the five-year old
<br />Replacement Funding Study, it is expected that further rate increases will be necessary to
<br />increase reserves. In addition, it is anticipated that rates will also need to increase to help pay for
<br />LAVWMA (export pipeline) repairs, as well as to meet normal O & M in~ationary increases.,
<br />
<br />WORKERS' COMPENSATION FUND
<br />
<br />In 1992-93, the current liability for current workers' compensation cases far exceeded what was
<br />projected, with $426,000 being taken from reserves. Therefore, in 1993-94 an additional
<br />one-time contribution of $500,000 was made to this Fund to restore its reserve levels. In
<br />1994-95 expenditures were $79,000 greater than projected, and in 1995-96 they were $74,000
<br />greater than projected. Therefore, staff is recommending that $175,000 be carried over from the
<br />General Fund from 1995-96 to 1996-97 to provide an extra transfer to the Workers' Comp Fund
<br />in 1996-97 to replenish its reserves, and to rovide additional funding for the 1996-97 year. Staff
<br />believes that the extraordinary payments o?t~e last few years have now taken care of most of the
<br />outstanding existing liabilities of the Fund, and that future annual expenditures will be less.
<br />However, staff will need to continue to monitor this Fund and continue efforts to manage costs to
<br />avoid additional contributions from the General Fund in the future.
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<br />SELF-INSURANCE RETENTION (LIABILITY) RESERVE FUND
<br />
<br />The ending reserves are $1.9 million, which is $600,000 greater than the adjusted budget. Staff
<br />is not recommending any adjustment to this Fund, since there have been deficits in previous
<br />years. The extra reserves may need to be utilized in the future, and staff does not believe they are
<br />excessive.
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<br />SR96:318
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