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It is also recommended that a portion of the budgeted contingency not expended be carried over for a number of potential expenditures such as additional recruitments, studies, and energy projects and gasoline price fluctuations. The amount of $250,000 was also budgeted in the prior year contingency for energy demonstration projects and $25,000 was allocated during the year for the Solar Cities Program (Livermore & Pleasanton) approved by City Council in October 2006. Carryover funding is also designated for various planning studies not yet completed such as the environmental impact report for Staples Ranch and the General Plan. The grant revenue carryover includes the "Save Our Schools" grant that has not yet been fully expended and will be reimbursed by the PUSD. It also includes an Office of Traffic Safety (OTS) grant and the California Cultural Crossroads grant that was received in the prior fiscal year but not yet expended. ENTERPRISE FUNDS The City currently has five Enterprise Funds, including the Storm Drain, Golf, Water and Sewer and Cemetery Funds. Only the Operations & Maintenance (O&M), and Debt Service portions of these enterprises are reflected in the Operating Budget. Capital Improvements and replacement for Storm, Water and Sewer are accounted for in the CIP. WATER AND SEWER OPERATING FUNDS The Water Operating Fund ended FY 2006-07 with a higher ending fund balance than was projected. The Sewer Operating Fund ended FY 2006-07 with a slightly lower fund balance than was projected due to a surplus from interest earnings in the debt service fund which was available for debt payments and allowed the amount budgeted for debt service in the O & M fund to be reduced. Dublin San Ramon Services District (DSRSD) is in the process of reviewing regional sewer rates for FY 2006-07, and a separate study by the City is underway to update local water and sewer rates and connection fees. Both the Water and Sewer O&M Funds typically need a larger fund balance than many other Funds, because of cash flow challenges (service is provided before revenue is received), and the need for a larger than average contingency (due to weather changes and unexpected equipment failures, costly water line breaks, etc.) Fund balances are monitored annually to determine if they are adequate to meet unexpected situations. Excess balances can be used to make additional transfers to the Water and Sewer Replacement Funds if needed to offset future costs. Page 5 of 10