City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01332 7/23/2024 Consent Item 6.
Budget Adjustments to the Department of Utilities (DOU) Capital Improvement Program, Multi- Year Operating Program, and the City of Sacramento’s Approved Fiscal Year (FY) 2023/24 Operating Budgets
File ID: 2024-01332
Location: Citywide
Recommendation: Adopt a Resolution authorizing the City Manager or City Manager’s designee to:
1) make adjustments to the DOU CIP and MYOP budgets in the Water (Fund 6005), Wastewater (Fund 6006), Storm Drainage Property Fee (Fund 6021), and Water Reimbursable (Fund 6205) funds; 2) approve the purchase of one Vac-Con and one Closed Circuit Television (CCTV) Truck from the FY 2024/25 Fleet MYOP for the Storm Drainage Property Fee Fund (6021) in an amount not to exceed $1,300,000; 3) transfer available funding from the North Natomas Westlake Community Facility District (CFD) (Fund 3320) construction fund balance to the Drainage Collection System Rehabilitation and Replacement (R&R) Program (W14170100) in the amount of $379,347; 4) transfer available funding from the Reassessment District II (Fund 3349) construction fund balance to the Drainage Sump R&R Program (W14130600) in the amount of $1,569,187; 5) establish the appropriate transfer to the General Fund (Fund 1001) from the Storm Drainage Property Fee Fund (Fund 6021) for the FY 2022/23 General Fund Tax plus Pool A interest; 6) transfer the General Fund Tax appropriation to the Finance Routing MYOP (I80060000, Fund 1001) in the amount of $2,049,212; and 7) establish the appropriate transfer to the Storm Drainage Fund (Fund 6011) from the Storm Drainage Property Fee Fund (Fund 6021) in the amount of $340,000 for eligible capital expenditures.
Contact: Pravani Vandeyar, Director, (916) 808-3765, [email protected]; Chuong (Ryan) Pham, Business Services Manager, (916) 808-8995, [email protected]; Penny Buchman, Supervising Financial Analyst, (916) 808-1481, [email protected]; Department of Utilities
Presenter: None
Attachments:
1-Description Analysis
2-Attachment 1
File ID: 2024-01332 7/23/2024 Consent Item 6.
3-Resolution
4-Exhibit A - Allocation Adjustments
Description/Analysis
Issue Detail: As part of the DOU ongoing management of its CIP, MYOPs, and Operating Budgets, a periodic review is conducted, and financial resources are reallocated to provide improvements in a timely and efficient manner. This process results in recommended budgetary adjustments to ensure progress continues for priority projects as shown in Attachment 1. Through the reallocation of resources, DOU is recommending the purchase of equipment (one Vac-Con and one CCTV truck) to support the Storm Drainage Property Fund (Fund 6021) with the new Mainline Inspection and Trash Capture Programs.
DOU has also been authorized by the Treasurer’s Office (after the Treasurer’s Office first obtained approval from Orrick, Herrington & Sutcliffe LLP, one of the City’s bond counsel firms) to utilize residual funds from two land-secured districts - Westlake CFD and Reassessment District II. The first action results in $379,347 from North Natomas Westlake CFD 2000-01 to replace two sluice gates.
The sluice gates were installed to isolate the storm drainage collection system from the detention basin. The second action results in $1,569,187 from the Reassessment District II No. 2006-01 (formerly Willowcreek II Assessment District (AD) No. 96-01 and North Natomas AD No. 88-03). DOU is requesting the use of the remaining construction funds in both districts and the associated Pool A interest earnings (when the Finance Department posts the FY24 interest earnings) to replace the failing engines at the pump station that were constructed as part of Willowcreek II AD No. 96-01.
The Storm Drainage Property Fee Fund (Fund 6021) is currently in litigation. The FY 2022/23 revenue and expenses will remain on hold. However, with the release of the FY 2023/24 expenses, the Department of Finance recommends reimbursing the FY 2022/23 Storm Drainage Property Fee General Fund Tax so that it is recognized in the appropriate fund. The General Fund Tax obligation of $2,049,212 plus the accrued interest requires budget authority. The General Fund Tax portion will be placed into a MYOP and held until the litigation is resolved. The interest will be deposited into the General Fund fund balance. The interest will be calculated using Pool A rates once the Pool A rate of return for June 2024 has been determined.
Lastly, DOU has eligible capital expenditures to reimburse the Storm Drainage Fund (Fund 6011) of $340,000 from the Storm Drainage Property Fee Fund (Fund 6021) once the litigation is resolved.
Policy Considerations: The recommendation to adjust the CIP and MYOP budgets that the DOU manages is consistent with the DOU 2020-2025 Strategic Plan goals and objectives to effectively manage infrastructure assets, purchase equipment, and deliver reliable services. Adjustments to operating and project budgets of more than $250,000 and the establishment of CIPs or MYOPs must be approved by the City Council.
File ID: 2024-01332 7/23/2024 Consent Item 6.
Economic Impacts: Not applicable.
Environmental Considerations: The Community Development Department, Environmental Services Manager has determined that the proposed activity is not a project pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15378(b). The fiscal management of the DOU’s CIP is an ongoing administrative fiscal activity and is not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Reallocation of resources, utilizing residual funds, and making appropriate reimbursements ensures that projects move forward in a timely manner, that there is appropriate reporting of financial transactions, and that financial resources are allocated based on the priority and necessity of the projects or operating needs for the applicable fiscal year.
Financial Considerations: The reallocation of resources to priority projects in the aforementioned funds will result in a net-zero within the funds as illustrated in Attachment 1. Once the adjustments are complete, there will be sufficient funding in the FY 2024/25 Storm Drainage Property Fee Fund (Fund 6021) to support the purchase of the Vac-Con and CCTV truck in an amount not to exceed $1,300,000.
In addition, staff is recommending the following:
1. Establish an FY 2024/25 expense budget in the Drainage Collection System R&R Program (W14170100, Fund 3320) from the remaining North Natomas Westlake CFD (Fund 3320) available construction fund balance in the amount of $379,347 as authorized by the Treasurer’s Office. When the FY 2023-24 Pool A interest apportionment has been completed, such amount associated with Westlake CFD shall also be available for eligible uses.
2. Establish an FY 2024/25 expense budget in the Drainage Sump R&R Program (W14130600, Fund 3349) from the remaining Reassessment District II No. 2006-01 (Fund 3349) available construction fund balance in the amount of $1,569,187 as authorized by the Treasurer’s Office. When FY 2023-24 Pool A interest apportionment has been completed, such amount associated with Reassessment District II shall also be available for eligible uses.
3. Establish the appropriate transfer to the General Fund (Fund 1001) from the Storm Drainage Property Fee Fund (Fund 6021) for the Storm Drainage Property Fee FY 2022/23 General Fund Tax obligation in the amount of $2,049,212 plus interest. The interest will be calculated based on Pool A and finalized once the June 2024 interest rate is calculated. The interest will
File ID: 2024-01332 7/23/2024 Consent Item 6.
remain in the General Fund balance.
4. Transfer the General Fund Tax portion of $2,049,212 from the General Fund balance (Fund 1001) to the Finance Routing MYOP (I80060000, Fund 1001) until the litigation is resolved.
5. Establish the appropriate transfer to the Storm Drainage Fund (Fund 6011) from the Storm Drainage Property Fee Fund (Fund 6021) in the amount of $340,000 for eligible capital expenditures once the litigation is resolved.
Local Business Enterprise (LBE): Not applicable.
Project / Dept ID Project Description 6005
Water
6006
Wastewater
6021
Storm Drainage
Property Fee
6205
Water
Reimbursable
Grand
Total
60001015-890020Contingency Reserves 6,623,618 6,623,618 I06000999 Fleet Acquisitions 1,300,000 1,300,000 I14100000 Storm Drainage Planning & Management (1,800,000) (1,800,000) I14110100 Sewer System Management Plan (250,000) (250,000) I14510100 Conjunctive Use-Groundwater Wells 1,900,000 1,900,000 I14520100 Groundwater Abandon/Protect Program (406,387) (406,387) I14630200 Combined Sewer System Management Plan (250,000) (250,000) W14000200 Base CIP Contingency - Drainage 105,339 105,339 W14004500 Sump 117 Electrical Rehabilitation 400,000 400,000 W14110600 Sump 39 Switchgear Replacement 500,000 500,000 W14130400 Drainage Channel Improvement Program (755,000) (755,000) W14130600 Drainage Sump Replacement/Rehabilitation Program 683,120 683,120 W14230100 Drainage Trash Capture Program (500,000) (500,000) W14230200 Facility Electrical Rehabilitation Program (4,350,000) (4,350,000) X14120300 Sewer Repairs Program 500,000 500,000 X14131500 Facility Electrical Rehabilitation Program 1,100,000 1,100,000 X14170100 Combined Collection System Replacement/Rehabilitation (4,050,000) (4,050,000) X14170500 Combined Sewer System Sump & Treatment Facilities 2,000,000 2,000,000 Z14003600 Information Technology - SCADA (775,000) (775,000) Z14110100 Well Rehabilitation Program 6,387 (1,900,000) (1,893,613) Z14130200 FWTP Rehabilitation (3,822,353) (3,822,353)
Z14130500 Reservoir Rehabilitation Program 400,000 400,000 Z14140100 Security & Emergency Preparedness Program (782,000) (782,000) Z14140600 DOU Facilities Improvement/Rehabilitation Program 299,923 299,923 Z14190100 Water+ Program 3,822,353 3,822,353
Grand Total - - - - - *Water reimbursable funds includes revenue and expense budgets Attachment 1
DOU Capital Improvement Program and Multi-Year Operating Program Allocation Adjustments RESOLUTION NO. 2024 –
Adopted by the Sacramento City Council
July 23, 2024
BUDGET ADJUSTMENTS TO THE DEPARTMENT OF UTILITIES CAPITAL
IMPROVEMENT PROGRAM, MULTI-YEAR OPERATING PROGRAM AND THE CITY OF SACRAMENTO’S APPROVED FISCAL YEAR 2023/24 OPERATING BUDGETS.
BACKGROUND
A. As part of the Department of Utilities (DOU) ongoing management of its Capital Improvement Program ( CIP), and Multi-Year Operating Programs ( MYOPs) budgets, a periodic review is conducted, and financial resources are reallocated to provide improvements and purchase equipment in a timely and efficient manner.
This process results in recommended budgetary adjustments to ensure progress continues for priority projects as shown in Exhibit A.
B. Included in the reallocation of resources, DO U is recommending the purchase of one Vac-Con and one Closed Circuit Television (CCTV) truck for the new Mainline Inspection and Trash Capture Programs that support the Storm Drainage Capital Improvement Program and associated operating costs.
C. DOU has also been authorized by the Treasurer’s Office to utilize funds from land- secured districts – Westlake CFD and Reassessment District II.
D. The Department of Finance recommends reimbursing the FY 2022/23 Storm Drainage Property Fee General Fund Tax so that it is recognized in the appropriate fund. The General Fund Tax obligation of $2,049,212 plus the accrued interest requires budget authority.
E. DOU has eligible capital expenditures to reimburse the Storm Drainage Fund (Fund 6011) of $340,000 from the Storm Drainage Property Fee Fund ( Fund 6021).
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Manager or City Manager’s designee is authorized to adjust appropriations in the Water (Fund 6005), Wastewater (Fund 6006), Storm Drainage Property Fee (Fund 6021), and Water Reimbursable (Fund 6205) as shown in Exhibit A.
Section 2. The City Manager or City Manager’s designee is authorized to purchase one Vac-Con and one CCTV truck from the FY 2024/25 Storm Drainage Property Fee Fund (Fund 6021) Fleet MYOP (I06000999) in an amount not to exceed $1,300,000.
Section 3. The City Manager or City Manager’s designee is authorized to establish an FY 2024/25 expense budget in the Drainage Collection System R&R Program (W14170100, Fund 3320) from the North Natomas Westlake CFD (Fund 3320) and transfer the available balance of $379,347. When FY24 Pool A interest apportionment has been completed, such amount associated with Westlake CFD shall also be available for eligible uses.
Section 4. The City Manager or City Manager’s designee is authorized to establish an FY 2024/25 expense budget in the Drainage Sump R&R Program (W14130600, Fund 3349) from the Reassessment District II No. 2006-01 (Fund 3349) available construction fund balance in the amount of $1,569,187. When FY 2023-24 Pool A interest apportionment has been completed, such amount associated with Reassessment District II shall also be available for eligible uses.
Section 5. The City Manager or City Manager’s designee is authorized to establish the appropriate transfer to the General Fund (Fund 1001) from the Storm Drainage Property Fee Fund (Fund 6021) for the Storm Drainage Property Fee FY 2022/23 General Fund Tax obligation in the amount of $2,049,212 plus interest.
Section 6. The City Manager or City Manager’s designee is authorized to transfer the General Fund Tax portion of $2,049,212 from the General Fund fund balance (Fund 1001) to the Finance Routing MYOP (I80060000, Fund 1001).
Section 7. The City Manager or City Manager’s designee is authorized to establish the appropriate transfer to the Storm Drainage Fund (Fund 6011) from the Storm Drainage Property Fee Fund (Fund 6021) in the amount of $340,000 for eligible capital expenditures.
Table of Contents
Exhibit A: Allocation Adjustments
Project / Dept ID Project Description 6005
Water
6006
Wastewater
6021
Storm Drainage
Property Fee
6205
Water
Reimbursable
Grand
Total
60001015-890020Contingency Reserves 6,623,618 6,623,618 I06000999 Fleet Acquisitions 1,300,000 1,300,000 I14100000 Storm Drainage Planning & Management (1,800,000) (1,800,000) I14110100 Sewer System Management Plan (250,000) (250,000) I14510100 Conjunctive Use-Groundwater Wells 1,900,000 1,900,000 I14520100 Groundwater Abandon/Protect Program (406,387) (406,387) I14630200 Combined Sewer System Management Plan (250,000) (250,000) W14000200 Base CIP Contingency - Drainage 105,339 105,339 W14004500 Sump 117 Electrical Rehabilitation 400,000 400,000 W14110600 Sump 39 Switchgear Replacement 500,000 500,000 W14130400 Drainage Channel Improvement Program (755,000) (755,000) W14130600 Drainage Sump Replacement/Rehabilitation Program 683,120 683,120 W14230100 Drainage Trash Capture Program (500,000) (500,000) W14230200 Facility Electrical Rehabilitation Program (4,350,000) (4,350,000) X14120300 Sewer Repairs Program 500,000 500,000 X14131500 Facility Electrical Rehabilitation Program 1,100,000 1,100,000 X14170100 Combined Collection System Replacement/Rehabilitation (4,050,000) (4,050,000) X14170500 Combined Sewer System Sump & Treatment Facilities 2,000,000 2,000,000 Z14003600 Information Technology - SCADA (775,000) (775,000) Z14110100 Well Rehabilitation Program 6,387 (1,900,000) (1,893,613) Z14130200 FWTP Rehabilitation (3,822,353) (3,822,353)
Z14130500 Reservoir Rehabilitation Program 400,000 400,000 Z14140100 Security & Emergency Preparedness Program (782,000) (782,000) Z14140600 DOU Facilities Improvement/Rehabilitation Program 299,923 299,923 Z14190100 Water+ Program 3,822,353 3,822,353
Grand Total - - - - - *Water reimbursable funds includes revenue and expense budgets Exhibit A
DOU Capital Improvement Program and Multi-Year Operating Program Allocation Adjustments