HomeMy WebLinkAbout1999-04-13; City Council; 15140; Appropriations Of Funds And Adjust Sewer Ratesf . - c”l-3 0 13’
CITY OF CARLSBAD - AGElvDA BILL lI/
AB# [<, /Yo TITLE:
MTG. 04/13/99 APPROPRIATIONS OF SEWER OPERATIONS UNRESERVED
FUNDS AND SETTING OF A PUBLIC HEARING TO ADJUST
DEPT. CMWD SEWER RATES CITY MGRa
RECOMMENDED ACTION:
Adopt Resolution No. 9P-/2? transferring funds from the Sewer Operations Fund
Balance to the Sewer Fixed Asset Replacement Fund and requesting the Council to set
a Public Hearing for May 4, 1999 to consider adjusting sewer rates.
ITEM EXPLANATION:
Staff has reviewed the status of the Sewer Operations Fund Balance and the present
sewer rates. This review has resulted in a determination that the present fund balance
exceeds the level of reserves that was recommended in the District’s Rate Study
approved by the City Council in 1996.
The unreserved funds in Sewer Operations are a result of revenue being generated by the
sewer services rates which were set to provide for funding for operations and maintenance
of the City’s sewer collection system as well as the City’s share of Encina Wastewater
Operations. As a result of a reorganization within Encina’s operations, the City has
realized a reduction in annual Encina cost of services. This resulted in a fund balance that
exceeded the level of required reserves stated in the previously mentioned adopted Rate
Study. Staff is recommending that the unreserved funds be appropriated to the Sewer
Fixed Asset Replacement Fund to cover costs associated with future capital replacement
projects.
To deal with future setting of rates, staff has developed a financial “wastewater rate model”
to better forecast future operational expenses and establish subsequent revenue
requirements. With improved wastewater rate forecasting and full-funding of the adopted
level of annual operations reserves, staff is recommending adjustments to the sewer
services rates as follows:
l Reduce the existing monthly sewer flat rate charge (single family residences) from
$15.00 to $13.00, and
l Reduce the existing monthly sewer flow-based charge by 9.6% for all remaining
customer categories.
It is recommended that the Council set a Public Hearing for May 4, 1999, to take public
input regarding the proposed rate adjustments.
FISCAL IMPACT:
Because the Sewer Capital Replacement Fund was not funded prior to 1990 and based on
an updated inventory of the City’s sewer system infrastructure, staff estimates that the
sewer operation should have set aside $7.5 million for the Sewer Fixed Asset
Replacement Fund prior to 1990. This allocation of unreserved funds from the City’s
Sewer Operations Fund Balance totals $5.92 million and will be added to the present
balance in the Replacement Fund.
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Page 2 of Agenda Bill No. /q/q0 /
EXHIBITS:
1. Resolution No. 99-129 transferring funds from the Sewer Operations Fund Balance to
Sewer Fixed Asset Replacement Fund and setting the date for the Public Hearing to
adjust sewer rates.
R:\CMWD\WordlWord - 99\Agenda Bill - Sewer Rates.doc
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RESOLUTION NO. 99-129
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CARLSBAD, CALIFORNIA TRANSFERRING
FUNDS FROM THE SEWER OPERATIONS FUND
BALANCE TO THE SEWER FIXED ASSET REPLACEMENT
FUND AND SETTING THE DATE FOR THE PUBLIC HEARING
TO ADJUST SEWER RATES
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WHEREAS, a review of the Sewer Operation Fund Balance shows the level of
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required revenues exceeds the level stated in the 1996 Rate Study; and
10 WHEREAS, these unreserved funds are the result of revenue being generated which
11 were set to provide funding for operations and maintenance of the City’s sewer collection ;
i2 system as well as the City’s share of the Encina Wastewater operations; and i’
13 WHEREAS, as a result of a reorganization within’Encina’s operations, the City has
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realized a reduction in annual Encina cost of services; and
WHEREAS, a financial “wastewater rate model” has been developed to better
17 forecast future expenditures and revenues and with improved forecasting it has been
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recommended the existing monthly sewer flat rate charge be reduced from $15 .OO to $13 .OO
and that the existing monthly sewer flow-based charge by 9.6% for all remaining customer
categories; and
WHEREAS, the Public Hearing is required to take public input regarding the
proposed sewer rate adjustments.
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NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
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Carlsbad, California as follows:
1. The above recitations are true and correct.
2. That unreserved funds be transferred from Sewer Operations Fund Balance to the
Sewer Fixed Asset Replacement Fund.
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3. That a Public Hearing is set for May 4,1999 to take public input regarding
the proposed sewer rate adjustments.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of
the City of Carlsbad, California held on the 13th day of April
1999, by the following vote:
AYES: Council Members Lewis, Hall, Finnila, Nygaard and Kulchin
NOES: None
ABSENT: None