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HomeMy WebLinkAbout06/02/2005, - RED FILE, ITEM PH5 Julie O'Connor- RED File,_Item PH5 From: Julie O'Connor To: RED FILE DISTRIBUTION GROUP Date: 6/1/05 10:52AM Subject: RED File, Item PH5 Please note that the most recent red file you received with.a memo from Audrey regarding the Sewer Review Fund item, is not meant to replace the original report but rather to be a supplement to it. PLEASE KEEP BOTH THE ORIGINAL REPORT AND THE SUPPLEMENT REPORT FOR TOMORROW NIGHT'S MEETING. If you have any questions please let me know. CC: Baasch, Sue; Dave Hix �iiuiilllllllllullll�u°°9�IU 7jtuliv CEIVED council memomnaum 0 M5 10ty of San Luis Obispo SLO C DATE: June 1, 2005 TO: Mayor and Members of the City Council FROM: Audrey Hooper, City Clerk VIA: Ken Hampian, City Administrative Office SUBJECT: REPLACEMENT OF AGENDA REPORT PH5: 2005 SEWER FUND REVIEW -UPDATE Attached is a revised agenda report for PH5 - 2005 Sewer Fund Review Update. The agenda report included in the agenda packet, should be replaced with the revised report. E;� OUNCIIL ADD DIR -CAO FIN DIR :�XACAO 2'FIRE CHIEF RED FILE ATTORNEY 'z--FW DIR CLERKfCRIG POLICE CHF ME NG AGENDA 10D T E;DS PZ R=C DIR paT-� O�ITEM # uTILDIR — _ /HR DIR GA301-03 AGENDAS\060205 Replacement Report PH5.DOC . l council Me 6'D.p June 2,2005 j agenda Report ¢�H CITY OF SAN LUIS OBISPO FROM: John Moss, Director of Utilities Prepared By: Sue Baasch, A nistrative Analyst Dave Hix, Wastewater Division Manager SUBJECT: 2005 SEWER FUND REVIEW -UPDATE CAO RECOMMENDATION 1. Review and accept the updated 2005 annual sewer fund financial and rate review; and 2. Conceptually approve the proposed operating program changes and capital improvement plan requests contained in the preliminary 2005-07 Financial Plan, pending final budget review and adoption; and 3. Adopt a resolution increasing sewer service charges pursuant to Exhibit A, effective July 1, 2005 and July 1,2006. DISCUSSION This brief report updates the recommendation arising from the 2005 sewer fund financial review. As Council is aware, there is a change to the sewer fund projected financial condition from the report previously received. The update accounts for the way the City receives and shows the funding and expenses for the lease purchase financing of the distributed generation energy projects at the Water Reclamation Facility.. Lease purchase funds were acquired in 2002-03 for the energy projects. With lease purchase financing, the funds are placed in a trust or escrow account and are drawn upon as the project is completed and the equipment is in place to guarantee the financing. Since the money is not available to the lender, payment for the full amount of the financing begins immediately; however, the funds are not technically received by the City until the work is completed. Our accounting appropriately did not show the funds as received, even though they are available to us, but this obviously alters the position of the fund significantly once those funds are received. Staff anticipates completion of the energy projects shortly and will, therefore, show receipt of these funds in 2004-05, and this significantly affects the short-term fiscal outlook of the sewer fund. Now accounted for, the sewer fund ends the 2004-05 year in much better financial condition, meeting working capital requirements in 2004-05. However, it does not change the long term financial outlook for the sewer fund because it must be able to pay for the projects that will assure compliance with regulations and provide for required system maintenance, as explained in detail in the earlier report. Adding the additional proceeds from the debt service from the energy conservation project moderates the projected annual sewer rates over the next several years, but does not change where the sewer fund revenues need to be in four to five years, assuming stafFs best information on meeting the new.requirements and the compliance time frames. .7 — t 2005 Sewer Fund Review Page 2 Based on this updated review, the revised recommendation is that sewer rates be increased by 14%, effective July 1, 2005, and 10%, effective July 1, 2006. The single family residential monthly sewer charge would increase from the current $28.36 to $32.33 on July 1, 2005 and then to $35.56 on July 1, 2006. This is a$3.97 monthly increase for single family households on July 1, 2005 and an additional $3.23 monthly on July 1, 2006. The attachments included with this update report are the revised financial schedules and the recommended resolution and rate exhibit. ATTACHMENTS 1. 2005 SEWER FUND ANALYSIS Exhibit A — Updated Financial Schedules A.1 Changes in Financial Condition A.2 Assumptions A.3 Capital Improvement Plan 2. RESOLUTION NO. ESTABLISHING SEWER SERVICE RATES Exhibit A. -- Schedule of Sewer Service Rates, effective July 1, 2005 and July 1, 2006. s-a ATTACHMENT 1 2005 Sewer Fund Analysis Updated Financial Schedules June 2, 2005 Prepared by the Utilities Department city of san lui s OBISPO s- 3 Exhibit A.1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ° 0 0 0 0 0 0 0 0 0 0 0 0 0 o O O o 0 0 C U — - - O [BO O N d !w� \D O — Vl O h00 N O N N N V' O V) N �o t- �6 M Vl O oo V) N V V1 %0 M %0 ON V1 V1 OS N \D l- O t, N O N N C N M \O M — M V1 R N N `-•' O O en O 000000 0 0 0 0 0 0 O O O O O O O O O O O O O O O 0 0 0 0 0 0 O O O Cl O O — %C V< C O n o0 O1 r, o0 t O R O C t+1 N O M — O1 ON N r 'V) �o N O 0tl N O\ O O\ 7 r- M O �O n fV a' M M t` V — %0 N — O %D V1 — V O N O`. l- M \o 00 O cn M � N V1 `••� r- 00 t- t'7 00 = O O O O O O O 0 0 0 0 0 0 O O OO O O O O O O O O O O O o O O O O O V V1 ootoo — OO ON V1 .4, n4 O R O %0 m �o 'es 4) M l- O O1 N N V) 0606 r- l-Z 0� Me lz O N \ M t- 0 vovaM00 o, rr -Twlm o �o o M �z - R N Oy. 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D R m I o \ m tD e r r OOD_d m O < D M e O C D N coO LD Ln m N n N C Z O m N (") m O cliH f0 O N > m O w � `A a> ° ai`A a E ~ 2 E E E LU ro E o = E C E n 13 ami m o a o c m Inm $ a 0 E d a in c r' `o ao m Z E C m (0-00 U O m p d C m OP, O. m LL m m �° m Unj E m m m tic` m ° E ' W. o m - Cccm m d Utd . $ NHy Qcmcmm L•yYm$�m V•ccZm ol6cm U$Zm cm :H= c 0 Zm dW v E m C Ec $O� Ld O N C `8 >N O2 a : C;cccr m' c mm y m03cj .0O 3 m M> aEueic LL o E m E LL + USamamm2 0N— O O LC lL OpOZ m OU E GONG ; m m lY 7 m m _ N c c m M > Zm0 m o) w H 0 3 Dn >. nmE. >1 m noE O m 10 c mDm Z ocmm �E 'MM R 0 n m '-.Z mmU cn o N cn c ma m r pm nm YLLm Di m ai m3 bm7uHm \ Exhibit A.3 � � ° $ � _ \ � � @ \ \ ■ a 00 a cq ? \ \ � Im § ° } i 2 2 f R . - § 2 # © ce � 2m Ln \ � } § \ / ell k § \ k / \ / $ — eq — © \0 k / / \ \ § J C4 d % S / . a S a 2 § Q tt k / � \ � go — ■ a \ § \ ® ( J § � a e E » ' § 2 & \ ƒ \ \ � ( cc B B § � ® a / \ . / k / § f § fƒ ) a ee e ` | e ¢ ■ , � §. � t K § � �� ; k § � [ • � ƒ 22 %\ E) I % \ f # 4 ) ■ � ] g = s3Cq ft \ f 2 B m a kuu = % / . ��� 1 ATTACHMENT 2 RESOLUTION NO. (2005 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO ESTABLISHING SEWER SERVICE RATES WHEREAS,it is the policy of the City of San Luis Obispo to review enterprise fund fees and rates on an ongoing basis and to adjust them as required to ensure that they remain equitable and adequate to fully cover the cost of providing services; and WHEREAS;a comprehensive analysis of sewer fund operating,capital and debt service needs has been performed for fiscal years 2004-05 through 2009-10; and WHEREAS, this comprehensive analysis has been revised based on updated revenue and expenditure information; and WHEREAS,the Council has reviewed the sewer service rates necessary to meet system operating, capital and debt service requirements. NOW,THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Resolution No. 9569(2004 Series)is hereby rescinded,effective July 1,2005. SECTION 2. The rates set forth in Exhibit"A"are hereby adopted,establishing rates effective July 1,2005 and July 1, 2006. Upon motion of seconded by ,and on the following roll call vote: AYES` NOES: ABSENT: The foregoing resolution was adopted this day of , 2005. ATTEST: Mayor Dave Romero Audrey Hooper,City Clerk APPROVED AS TO FORM: Jonathan Lowell,City Attorney EXHIBIT A to Resolution No. (Series 2005) MONTHLY SEWER SERVICE RATES Type of Account July 1, 2005 July 1, 2006 Single family dwelling, including single meter 32.33 $35.56 condominiums and townhouses Multi-family dwelling in any duplex, apartment house or 25.46 28.01 rooming house, per each dwelling unit Mobile home or trailer park, 19.22 21.14 per each dwelling unit Public, private, or parochial 3.65 4.02 school, average daily attendance at the school All other accounts Minimum charge 32.33 35.56 Additional charge for every 3.90 4.29 100 cubic feet in excess of 500 cubic feet of metered water consum tion Minimum charge 106.51 117.16 Additional charge per 100 6.41 7.05 gallons in excess of 1500 gallons discharged � � D