Enterprise Funds & Capital Funds
FISCAL YEAR 2024-25
SESSION DATE : MAY 13, 2024
Study Session Overview
Tentative Schedule
Goals and Objectives
Budget Study
Enterprise Funds
Water/Sewer/Internal Service
Capital Project Funds
General Fund & Special Revenues Update
Conclusion
Packet Provided Schedules
Enterprise Funds Proposed Budget Workbook
Capital Project Funds Budget Workbook
Multi-Year Capital Projects Plan
General Funds – Updated Workbook with Transfers and Other Sources/Uses Special Revenue Funds Workbook
2 Tentative Schedule
3 Strategic Planning Session
•Developed City Objectives/Goals
20 Feb. 2024
Budget Study Session
•General Fund
•City Goals Finalization
2 Apr. 2024
Budget Study Session
•Enterprise Funds
•Special Revenues
•Capital Projects
•Transfers In and Outs
13 May 2024
Budget Adoption
Salary Schedule Adoption
Financial Policy Update Adoption
Appropriations Limit Adoption
11 June 2024
Goals and Objectives
Long Term Vitality
•Balanced Budget
•Economic Development
•Affordable & Proper Development
•Infrastructure Preservation
•Pursue Grant Opportunities
Climate Change
•Mitigate and Adapt to Impacts
•Wildfire Preparation & Adaptation
Community Engagement
•Inclusive and Equitable Practices
•Advance Equity to Community Partners
Equitable, Compassionate & Healthy
Community
•Diversity Source of Strength
•Equity in Hiring/ Promoting/ Contracting
•Advance equity & health partnerships
Best in Class Community Services
• Community Safety & Quality
•Support High Level Core Services
•Emergency Preparedness
•Update Regulations
•Development Services
•Regional Participation
•Improve Service Delivery
Forecast Assumptions
Revenues
Based on best available information
Legislative Impacts from Federal, State & Regional
Government
Estimates are prudently conservative
Cotati’s Revenue Base is Different
Sales tax & Measure S relatively secure
Slowly Growing Cannabis Business Tax
No current hospitality industry or related taxes like Transient Occupancy Tax (TOT)
Forecast Assumptions
Expenses
Finding a Balance
Revenues
Service Level/Operating Expense
Contract Services
Liabilities Management (Capital, UAL )
Proposed Budget Includes ADP $335K total and $273K for General Fund
Outstanding Items
Insurance Costs (Estimates)
CPOA and CPMA in Negotiation
Enterprise
Funds
ENTERPRISE FUNDS ARE USED TO
ACCOUNT FOR OPERATIONS THAT ARE
FINANCED AND OPERATED IN A SIMILAR
MANNER AS A PRIVATE BUSINESS
ENTERPRISES, WHERE THE INTENT IS THAT
THE COSTS OF PROVIDING GOODS OR
SERVICES TO THE GENERAL PUBLIC ON A
CONTINUING BASIS BE FINANCED OR
RECOVERED PRIMARILY THROUGH USER
CHARGES.
Budget
Highlights
Maintains a reserve of 33% of
operating expenses
Proposed rate change per
the proposed rate study for
water & sewer
Conservative Revenue and
Expenditures Estimates
Continued focus on
infrastructure improvements
and preservation
WATER
FUNDS
Water Funds Overview
BUDGET ASSUMPTIONS
Water rate adjustment in FY 2024-25:
Water rates are determined by the cost of delivering water and maintaining infrastructure and equipment in order to properly treat and distribute water to our customers.
Rate Study approved by council June 2022.
Engaging in New Rate Study Evaluation
Interfund Debt Service Back to General Fund for UAL Contribution. Proposed Capital Project and Equipment Improvements:
Water Meter Replacements
SCADA Server Upgrade & Relocation - $82,000
Well 1A/Well 3 Maintenance - $68,000
West Sierra Tank Recoating - $839,000
•One Time UAL ADP in FY 2024/25
•Personnel budgeting full staffing
•Allocated Contract Services
•Estimated Increasing Insurance
• Continued water conservation programs
• Cost of Water Procurement -
•Water Agency Increased Rate of 10.0%
• Consistent Slowed Water Consumption
•Repairs & Maintenance include Water Main
Flushing Services and funding Vehicle
Maintenance contributions.
Changes in Operating Expenditures:
•Flat growth with reduced consumption
•No new significant connection fees since
completion of Kessing Ranch Developments
Change in Revenues:
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
2020-2021
Total
Activity
2021-2022
Total
Activity
2022-2023
Total
Activity
2023-2024
Est. Actuals
2024-2025
Proposed
Millions
Combined Water Funds
Revenue and Expenses
Revenues Expenses
Water Study Projections
Debt Proceeds: $0.9M $3.4M
$0
$1
$2
$3
$4
MILLIONS
Combined Ending Fund Balance
Target Reserve Level
Minimum Reserve Levels
$0
$1
$1
$2
$2
$3
$3
$4
$4
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Total Revenue / Expenses ($M)
Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Cash Capital Revenues Expenses
Contract Services
Professional Services
General Engineering Services $
5,000
Technology & Data
SCADA and TESCO Systems
Maintenance $27,200
Tyler Incode (Billing/Notification)
Fees $ 8,000
Meter Systems Support $6,000
Water ATM Support $1,600
NextGen – Asset Management System $1,000
Special Project
Main Cleaning - $100,000
General Services
Sewer Systems Support $ 15,500
Water Sample Testing $15,600
Uniform Services $ 675
Water Conservation Programs
Water Smart $16,000
Water Audits $6,000
SEWER
FUNDS
Sewer Funds Overview
BUDGET ASSUMPTIONS
Proposed rate adjustment in FY 2024-25
Sewer rates are determined by the cost of treatment of wastewater and maintenance of related infrastructure and equipment.
Rate Study adopted by Council June 2022.
Proposed Capital Project Improvements:
SCADA Server Upgrade & Relocation - $81,650
•One Time UAL ADP
•Personnel budgeting full
staffing
•Allocated Contract Services
•Estimated Increasing
Insurance
•Increased wastewater
treatment costs of
approximately 6.8%
Operating Expenditures:
•No estimated connection fees
•Minimal Investment Earnings
•Rate Increase
Change in Revenues:
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
2020-2021
Total
Activity
2021-2022
Total
Activity
2022-2023
Total
Activity
2023-2024
Est. Actuals
2024-2025
Proposed
Millions
Combined Sewer Funds
Revenue and Expenses
Revenues Expenses
Wastewater Study Projections
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 $0
$1
$2
$3
$4
MILLIONS
Combined Ending Fund Balance Target Reserve Level
$0
$1
$2
$3
$4
$5
$6
$7
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Total Revenue / Expenses ($M)
Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Cash Capital Expenses Revenues
Contract Services
Professional Services
General Engineering Services $ 2,000
Special Project
Sewer Hydraulic Model $7,500
Technology & Data
SCADA Systems Support and Licenses $14,400
Billing System Fees $ 4,000
Asset Management System $1,000
General Services
Calibrating and Repairs on Sewer Flow Meters $10,000
QUESTIONS?
Internal
Service
Funds
AN INTERNAL SERVICE
FUND IS ANY FUND THAT IS
USED TO ACCOUNT FOR
THE FINANCING OF
GOODS OR SERVICES
PROVIDED BY ONE
DEPARTMENT OR AGENCY
TO OTHER DEPARTMENTS
OR AGENCIES OF THE
GOVERNMENTAL UNIT, OR
TO OTHER
GOVERNMENTAL UNITS,
ON A COST
REIMBURSEMENT BASIS.
CURRENTLY THE CITY
UTILIZES A VEHICLE
REPLACEMENT FUND AND
A COMPENSATED
ABSENCES FUND FOR
THESE PURPOSES.
Internal Service Funds
Budget Highlights
Maintains appropriate
reserve to meet
expenses and build
limited reserves for
future fund resiliency
Proposed schedule for
vehicle replacement
includes replacement of
aged equipment
Compensated
absences for Fiscal Year
24/25 proposed based
on meeting current
payout expectations
Compensated
Absences Expenditures
and Revenue are
allocated Based on
General FTE of Liability
Vehicle
Replacement
Continued Investment of $361K
includes
Replacement of :
One Police Interceptor SUV’s
Evaluating fuel
efficient/environmentally friendly
vehicles
Pending Public Works Flatbed
Dump Truck Replacement
New Equipment- Various as
needed
Repairs & Maintenance of
Existing Fleet
Designed to maintain the
government wide
compensated absences
liability by billing out
proportionate usage and
balance to the
appropriate funds and
departments.
Balances are changed to
address estimated annual
charges
Compensated
Absence Fund
QUESTIONS?
Capital Projects
PROPOSED BUDGET FOR FY 2024-25
NOTE: MULTI-YEAR PLAN PRESENTED TO PLANNING COMMISSION
Streets Capital Projects
2024-25 Streets Improvements $3,249,000
Street Paving Improvements and Maintenance
2025 Street Improvement - $664,000
2026 Street Improvement (Design) –$60,000
Bicycle and Pedestrian Safety Improvements -
$50,000
Gateway Signage – $61,000
Park and Ride Replacement - $993,000
(Continued)
Class 1 Pathway Maintenance - $185,000
Landscaping Improvements - $35,000
Streets Capital Projects
Street Continued – Partially Grant Funded
Street Paving Improvements and
Maintenance
Redwood Drive & Cypress Completion
- $104.000
HWY 116/W. Cotati Intersection - $362,000
Sidewalk Gap Closures - $735,000
Parks Capital Projects
2022-23 Park Improvements - $2,536,000
Putnam Park – Phase 1
This project includes the perimeter pathway and
pedestrian bridge across the Laguna de Santa Rosa,
and parking lot lighting.
Budget $2,471,000
Sunflower Park – Phase 1
Design and construction of pathways, a new play
structure, picnic area, lighting and landscaping.
Budget $5,000 (carryover)
Veronda-Falletti Ranch Barns
Continued Design of a barn/community program
center at the Ranch.
Budget $60,000
Other Capital Projects
Storm Water
Trash Implementation Plan - $231,000
City Buildings
City Hall Public Meeting Streaming System - $306,000
QUESTIONS?
Updates for General Fund
Other Sources/Uses
Interfund Loans to
Water and Sewer for
their Proportionate
Allocation of Pension
Obligation Bond
2023/24 & 2024/25 -
Debt Payment for
Pension Obligation
Bond
Transfers In/Out
2024/25 Transfers In
$170 K from Public Safety Fund
$4.2 K from Veterans Building
$32 K from Comm. Facilities Dist.
$2 K from S. Sonoma Bus. Park
2024/25 Transfers Out
$319 K To Grants Funds
$4,086 K to Capital Projects
$12.5K to Special Revenues
Conclusion
A balanced budget
maintaining prudent fund
balance levels. We will
continue to closely monitor the
operating funds to ensure that
we stay on track to stabilize
and begin growing fund
balances while also
undertaking the necessary
infrastructure maintenance
and upgrades
Operating reserve requirements
meet for both Water and Sewer
Funds
City staff will continue to
update the Council on any
significant budgetary changes
prior budget adoption.
City staff are committed to
exercise prudence and
integrity in the management of
public funds and provide
transparency and
accountability in its use.
QUESTIONS?