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HomeMy WebLinkAbout5/17/2000 - STAFF REPORTS (18) DATE: May 17, 2000 TO: City Council FROM: Assistant City Manager-Special Projects WASTEWATER TREATMENT PLANT FUND USE POLICIES RECOMMENDATION: It is recommended that City Council adopt a Resolution establishing policies on the use of the Wastewater Treatment Plant Fund. BACKGROUND: With the passage last November of Measure"U," Palm Springs voters amended the Charter to establish that the Wastewater Treatment Plant Fund could not be utilized for loans to other City activities. The City's Wastewater Treatment Plant fund was established years ago to provide for the accounting of all income and expenses, operational or capital, of the City's Wastewater Treatment Plant. All money collected from whatever source, so long as it is related to wastewater treatment and collection, is deposited in the Fund. With budget adoption each year,the Wastewater Treatment Plant operational needs are appropriated from this Fund. At the recent budget workshop, City Council expressed a desire to establish policies related to the use of the Wastewater Treatment Plant Fund. The attached Resolution would establish the following policies: A. The Wastewater Treatment Plant Fund is an Enterprise Fund of the City of Palm Springs to account for the income, expenses, collections, and assets of the Wastewater Treatment Plant operations and capital investments. B. The Wastewater Treatment Plant Fund shall be used for the annual appropriations of funds for Wastewater Treatment Plant operations and wastewater collection services. C. The Wastewater Treatment Plant Fund may be utilized for annual equipment and small capital project needs, less than $50,000 per project, of the wastewater plant or collection system. D. The Fund may be utilized to reimburse any Capital Facility Charges invoiced by the City's Operations & Maintenance contractor. E. The minimum fund balance goal for the Fund shall be $2.2 million for unforseen emergencies or regulatory mandates. F. The Fund's balances may be utilized to cover the annual operational swings in profits or loss, up to a maximum of$200,000 per year, which will allow for minor swings in annual profit or loss from operations without requiring a recalculation of sewer service rates. G. The Fund may be utilized for capital expansion of the plant and collection system. 15A Wastewater Treatment Plant Fund Use Policy May 17, 2000 Page Two The attached Resolution would establish the above policies and provide forthe public accounting of the Fund and it is offered for City Council consideration. ALLEN F. SMOO , AAE Assistant City Mana er-Special Projects APPROVED 6F� City Manager ATTACHMENT: Resolution R MEM BY WY.OF FIME 1 RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA,FURTHER DEFINING ITS POLICIES FOR THE USE OF THE WASTEWATER TREATMENT PLANT FUND. WHEREAS Resolution No. 9279 established the Wastewater Treatment Plant Fund and provides broad use categories for eligible expenditures from the fund; and WHEREAS State law has been amended to integrate comprehensive provisions regulating facility fee programs; and WHEREAS Proposition 218, as passed by State of California voters in November 1996, provides that fees (1) should not exceed the funds required to provide the service, (2) shall not be used for purposes other than that for which they were imposed, (3) shall not exceed the proportional cost of the service attributable to the parcel, (4)shall not be charged unless the service is available, 95) may not be charged for general governmental services; and WHEREAS the Palm Springs voters reemphasized principles of Proposition 218 when they passed proposition "U" in November of 1999, which prohibited the sale or lease of the Wastewater Plant to a private entity and enacted restrictions on fees similar to Proposition 218; and WHEREAS with the adoption of Measure "U" in November of 1999, the voters amended the City Charter to prohibit loans from the Wastewater Treatment Plant Fund; and WHEREAS the City Council has expressed a desire to further define its policies on how the Wastewater Treatment Plant Fund is to be utilized, NOW THEREFORE BE IT RESOLVED that in addition to complying with Resolution No. 9279, the Wastewater Treatment Plant Fund shall be administered in accordance with the following: Section 1. General. The following general policies shall apply to the Fund: a. The Wastewater Treatment Plant is an Enterprise Fund of the City of Palm Springs to account for the income, expenses, collections, and assets of the Wastewater Treatment Plant operations and capital investments. b. The Wastewater Treatment Plant Fund shall be used forthe annual appropriations of funds for Wastewater Treatment Plant operations and wastewater collection services. C. The Wastewater Treatment Plant Fund may be utilized for annual equipment and small capital project needs, less than $50,000 per project, of the wastewater plant or collection system or large capital needs as specified herein. d. The Fund may be utilized to reimburse any Capital Facility Charges invoiced by the City's Operations & Maintenance contractor. e. The minimum fund balance goal for the Fund shall be $2.2 million for unforseen emergencies or regulatory mandates. 1 6"05 Resolution for WWTP Fund Policies May 17, 2000 Page Two f. The Fund's balances may be utilized to cover the annual operational swings in profits or loss, up to a maximum of $200,000 per year, which will allow for minor swings in annual profit or loss from operations without requiring a recalculation of sewer service rates. g. The Fund may be utilized for capital expansion of the plant and collection system. Section 2. Collection of Fees and Charges. Fees and charges collected and placed in the Wastewater Treatment Plant Fund shall comply with the following: a. They shall not exceed the estimated reasonable cost of providing the service. b. They shall not be used for any work other than that for which they were collected. C. They shall not exceed the proportional cost of providing the service. d. They shall not be imposed unless the service is used by or available to the payee. e. They shall not be collected for general governmental purposes. Section 3. Loans from the Fund. The City may not borrow funds from the Wastewater Treatment Plant Fund forthe use of any department or program of the City not within the Wastewater Division except in the case of a declared emergency pursuant to the California Constitution. Section 4. Establishing the Fee. Any action establishing, increasing or imposing any fees and charges shall include: a. The source, purpose and use of the fee. b. A determination of the reasonable relationship between the use of the fee and the method of imposition. Section 5. Administration of Fund. a. On the fifth fiscal year following deposit into the Fund and every year thereafter,the City shall make the following findings with respect to all funds remaining unexpended. 1. Identify the source and nature of all funds. 2. Identify the purpose for which the fee is to be put. 3. Demonstrate the reasonable relationship between the fee and the purpose for which it is charged. 4. Identify all other sources of financing necessary to complete the necessary improvements. 5. Designate the approximate dates of deposit. b. The City shall comply with all other provisions of Government Code 66000 et. seq as it shall be amended, and as applicable, in the administration of the Fund. 1 51 2w-. Resolution for WWTP Fund Policies May 17, 2000 Page Three C. Within 180 days following the end of the fiscal year, the Director of Finance shall make available to the public the following information for the fiscal year: 1. A description of the source, type and amount of any fees. 2. The beginning and ending balance of the Fund and all interest earnings. 3. An identification of an approximate date construction of improvements funded from the Fund will commence. 4. A description of any other Fund transfers or loans to the Fund with the date of repayment and interest. 5. Any refunds. 6. The City Council shall review the information made available to the public at a public meeting not less than 15 days after the information is made available to the public. 7. Any person may request an audit of the Fund. ADOPTED this day of 2000. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By: City Clerk City Manager REVIEWED &APPROVED AS TO FORM 00 03