City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Lisa Roos, City Clerk & Finance Director
Date: 08/08/2023
Subject: Enterprise Fund and Landscape Maintenance District transfers RECOMMENDED ACTION:
Approve this resolution for the 2022-23 fiscal year that authorizes transfers from (1) Enterprise Operating Funds to Enterprise Capital Reserve Funds, (2) General Fund to Landscape Maintenance Districts with deficits, (3) General Fund to CNG Station Capital Reserve Fund, and (4) General Fund to PERS Contingency Fund.
BACKGROUND:
At the end of each fiscal year, transfers are analyzed from (1) Enterprise Operating Funds to Enterprise Capital Reserve Funds, (2) General Fund to Landscape Maintenance Districts with deficits, and (3) General Fund to CNG Station Capital Reserve Fund.
In 2020, Redevelopment Bonds were refinanced, which created additional property tax income to the General Fund. Fiscal year 2021-22 was the first time that these savings from the refinancing were realized. At the March 2022 Strategic Planning meeting, Council directed these savings to be transferred to the PERS Contingency Fund.
DISCUSSION/ANALYSIS:
Enterprise Funds to Enterprise Capital Reserve Funds
The Enterprise Fund Rates and Cash Flow Study prepared by Municipal Financial Services (MFS) established Enterprise Fund customer rates that provide the needed revenue to fund the annual operations of the service and set aside revenue to fund the future replacement of capital items. At the end of the fiscal year, each Enterprise Fund’s operating cash flow is evaluated and available funds are transferred to the appropriate Enterprise Capital Fund, as long as the enterprise operating fund minimum balance is maintained. The following table summarizes the fiscal year 2022-23 cash flow and recommended transfer to each Enterprise Capital Fund.
Table 1
FY 2022-23
Fund Beginning
Balance Income Expenses Balance Prior to Transfer Transfers Ending Balance Water Operating $926,514 $3,825,1161
($2,678,581) $2,073,049 ($1,146,535) $926,514
Sewer Operating $710,609 $2,015,969 ($1,355,152) $1,371,426 ($674,000)2 $697,426 Garbage Operating $211,230 $2,526,054 ($2,300,398) $436,886 ($225,656) 3 $211,230
Water Enterprise
Capital $7,233,395 $288,009 ($1,347,064) $6,174,340 $1,146,535 $7,320,875 Sewer Enterprise
Capital $1,687,703 $85,911 ($579,777) $1,193,837 $355,000 $1,548,837 Sewer WWTP
Reserve $1,161,125 $17,510 $0 $1,178,635 $319,000 $1,497,635 Garbage
Enterprise Capital $1,067,135 $11,921 ($436,012) $643,044 $225,656 $868,700 Storm Drain
Enterprise Capital $371,022 $5,595 ($35,017) $341,600 $0 $341,600
1. Water Operating and Water Enterprise Capital Funds income include transfer of water meter surcharge fee collected during the fiscal year of $191,992.
2. Sewer projected transfer is $355,000 for Capital Repair and Replacement and $319,000 for WWTP Reserve.
3. Transfer target per MFS study is $280,000, but we only transferred $225,656 because operating expenses were increased due to regulatory requirements. This will be evaluated prior to next year’s rate increase.
General Fund to Landscape Maintenance and Lighting Districts with deficits The policy for transferring from the General Fund to the Landscape Maintenance Districts is if the district has an annual operating deficit and no balance to offset that operating deficit, a transfer from the General Funds is made.
Table 2
FY 2022-23
Fund Beginning
Balance Income Expenses
Balance
Prior to
Transfer
Transfers Ending
Balance
Dutch Meadows $ 0 $4,540 ($11,830) ($7,290) $7,290 $ 0
Country Woods $ 0 $7,809 ($13,942) ($6,133) $6,133 $ 0
Farmland Estates $ 0 $3,350 ($7,633) ($4,283) $4,283 $ 0 Jacob’s Landing $22,766 $5,701 ($6,412) $22,055 $22,055 Carolina’s $22,727 $12,644 ($6,950) $28,421 $28,421
Boesch/Kingery $22,780 $6,061 ($13,063) $15,778 $15,778 Main Street $ 0 $10,481 ($36,748) ($26,267) $26,267 $ 0 Cornerstone I $83,774 $14,079 ($12,657) $85,196 $85,196 The Vineyards $117,522 $64,939 ($40,009) $142,452 $142,452 Alexandra Place $1,026 $5,053 ($6,225) ($ 146) $146 $ 0 Lighting District ($21,342) $334,054 ($269,198) $43,514 $43,514 General Fund to CNG Station Capital Reserve Fund
Each year we evaluate the rate at which CNG is sold at the fueling station on Doak Boulevard to ensure operating costs are recovered plus funds necessary to replace capital items in the future are reserved. At the end of the fiscal year, the CNG station cash flow is evaluated and available funds are transferred to the CNG Station Capital Reserve Fund.
Table 3
FY 2022-23
Fund Beginning
Balance Income Expenses
Balance
Prior to
Transfer
Transfers Ending
Balance
CNG Operating Activity $ 0 $299,1611
($185,662) $113,499 ($113,499) $ 0
CNG Station Capital Reserve $195,982 $2,115 ($95,148) $102,949 $113,499 $216,448
1. Income includes federal tax credits from past years of 2019, 2020, 2021, and 2022. Normal years should only include one tax credit.
General Fund to CalPERS Contingency Fund.
In 2020, Redevelopment bonds were refinanced, creating additional property tax income to the General Fund. Over the next six years, the City will realize savings of $832,824 due to this refinancing, which is shown in the following table. At the March 2022 Strategic Planning meeting, Council directed these savings to be transferred to the CalPERS Contingency Fund.
Table 4
Fiscal Year Savings
2021-2022 $157,569
2022-2023 $161,861
2023-2024 $161,805
2024-2025 $162,117
2025-2026 $136,064
2026-2027 $53,407
Total Savings $832,823
In Fiscal Year 2022-23, $161,861 was transferred to the CalPERS Contingency. This fund balance at June 30, 2023 is $1,334,673. With a transfer made in July 2023, all of these funds are held in the Section 115 Trust with PARS.
RESOLUTION NO. 23-39
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RIPON AUTHORIZING THE TRANSFER OF CERTAIN
MUNICIPAL FUNDS
WHEREAS, the City Council of the City of Ripon is desirous of transferring certain funds to capital reserve funds as hereinafter set forth; and
WHEREAS, it is necessary that the balance of certain funds as hereinafter indicated, be adjusted and certain transfers made in order to properly reflect the correct balance of said funds for the period from July 1, 2022 through June 30, 2023; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ripon that the following transfers of the City of Ripon be and the same are hereby authorized and approved by the City Council of the City of Ripon as hereinafter specifically set forth:
1. The transfer of $1,146,535.33 from the Water Fund of the City of Ripon to the Capital Reserve Fund of the Water Department of the City of Ripon.
2. The transfer of $191,991.58 from the Water Fund of the City of Ripon to the Capital Reserve Fund of the Water Department of the City of Ripon, for the current year’s collection of water meter surcharge.
3. The transfer of $355,000.00 from the Sewer Fund of the City of Ripon to the Capital Reserve Funds of the Sewer Department of the City of Ripon.
4. The transfer of $319,000.00 from the Sewer Fund of the City of Ripon to the Wastewater Treatment Plant Contingency Fund of the Sewer Department of the City of Ripon.
5. The transfer of $225,655.61 from the Refuse Fund of the City of Ripon to the Capital Reserve Funds of the Refuse Department of the City of Ripon.
6. The transfer of $7,290.57 from the General Fund of the City of Ripon to the Dutch Meadows Landscaping Assessment District Fund for the deficit balance of this Fund.
7. The transfer of $6,133.17 from the General Fund of the City of Ripon to the Country Woods Landscaping Assessment District Fund for the deficit balance of the Fund.
8. The transfer of $4,283.13 from the General Fund of the City of Ripon to the Farmland Estates Landscaping Assessment District Fund for the deficit balance of this Fund.
9. The transfer of $26,266.60 from the General Fund of the City of Ripon to the Main Street Landscaping Assessment District Fund for the deficit balance of this Fund.
10. The transfer of $146.45 from the General Fund of the City of Ripon to the Alexandra Landscaping Assessment District Fund for the deficit balance of this Fund.
11. The transfer of $113,499.00 from the General Fund of the City of Ripon to the CNG Station Capital Reserve Fund for net income of the CNG Station during this fiscal year.
12. The transfer of $161,861.23 from the General Fund of the City of Ripon to the CalPERS Contingency Fund for the savings due to the refinancing of the Redevelopment Bonds.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Ripon this 8th day of August, 2023, by the following vote:
RESULT: ADOPTED AS AMENDED BY CONSENT VOTE [UNANIMOUS]
MOVER: Daniel de Graaf, Council Member
SECONDER:Gary Barton, Council Member
AYES: Restuccia, Zuber, de Graaf, Barton, Uecker
THE CITY OF RIPON,
A Municipal Corporation
By ________________________________
MICHAEL RESTUCCIA, Mayor
ATTEST:
By: ___________________________
LISA ROOS, City Clerk