City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Lisa Roos, City Clerk & Finance Director
Date: 12/13/2022
Subject: Annual AB1600 Report - PFFP Capital Funds
RECOMMENDED ACTION:
Approve the annual PFFP Report for the period ending June 30, 2022.
BACKGROUND:
The City utilizes a number of funds to track revenue and expenses used to conduct the business of the various City departments. These funds are classified by three categories - “Operating Funds”, “Capital Funds”, and “Restricted Funds”. Attached is a figure showing each of these fund categories along with the breakdown of the different funds within each of these categories.
The Capital Fund category includes three sub-categories, as described below:
General Capital Funds – At the City Council’s discretion, funds are transferred from the General Fund to be used for capital projects/purchases or to reserves. Enterprise Capital Funds – By resolution, revenue from the designated operating fund (e.g., Water Operating Fund) are transferred to the designated enterprise capital fund (e.g., Water) for equipment and infrastructure replacement. PFFP Capital Funds – The various Public Facilities Financing Plan (PFFP) Capital Funds track revenue and expenses for the different designated fund categories. The revenue is from development and restricted to fund infrastructure needed to support growth.
By law, we are required to report upon our PFFP Capital Funds, which are also referred to as AB1600 Fees. The attached Public Facility Financing Plan Annual Progress Report (“PFFP Report”) has been prepared in accordance with the requirements of California Government Code Section 66000.
DISCUSSION/ANALYSIS:
The Fund Balances Summary as of June 30, 2022 has been attached for your reference along with the PFFP Report for the Fiscal Year Ending June 30, 2022.
There are few items to be noted for this PFFP Report:
1. There are certain PFFP capital funds with negative balances. This was mostly related to advancing construction of the City Hall and Library buildings to the size necessary to accommodate buildout of the General Plan. These negative balances continue to be tracked and these accounts are charged interest that is, in turn, applied to the capital accounts with positive balances.
In early 2021, Goodwin Consulting evaluated the funds with negative balances (City Hall, Library and Refuse) to determine if an adjustment was necessary to the AB1600 fee to ensure the City is collecting sufficient revenue from future development. No increases were proposed at that time. Goodwin’s analysis noted that based upon a residential growth rate of 1.5%, which is a long-term average, the City Hall Fund deficit would be eliminated in 2047, Library Fund in 2032 and Refuse Fund in the next five years.
2. An increase to the Corporation Yard fee was approved by the City Council in July 2021 based upon the Corporation Yard Master Plan and financial analysis that distributed financial responsibility between existing and future development. This increase was effective in September 2021.
FISCAL IMPACT:
None.
Attachments:
1. Budget Category Reporting Summary
2. Fund Balances 2022.06.30
3. 21-22 PFFP Report