CITY OF SEBASTOPOL CITY COUNCIL
AGENDA ITEM REPORT FOR MEETING OF: November 19, 2024
=========================================================================================== To: Honorable Mayor and City Councilmembers
From: Ana Kwong – Administrative Services Director
Toni Bertolero – Interim Engineering Director
Dante Del Prete – Public Works Superintendent
Subject: FY24-25 Quarter 1 Financial Update for Enterprise Funds =========================================================================================== RECOMMENDATION:
Staff recommends the Sebastopol City Council receive year-to-date financial information for the enterprise funds.
EXECUTIVE SUMMARY:
Based on the best available information as of September 30, 2024, the city's water fund has billed 31% of budgeted revenue for the full fiscal year. Expenses are at 25% of full fiscal year. Wastewater has billed 26% of budgeted revenue of full year. Expenses are 21% for full year.
BACKGROUND:
The Water and Wastewater enterprise funds have been substantially under funded until rate increases began on July 1
, 2024. All activities to maintain these services, including operations, maintenance, billing and collections, administration, financing, and related debt service, are accounted for in these funds. The principal sources of revenue are chargesto customersfor water consumption, wastewater collection, and feesrelated to providing new water and wastewater services. The City has recognized more revenue due to the recent water and wastewater rate increases. On the expenditure side, water is trending close to the 25% mark for the first quarter, while wastewater is below this mark, which is due to the non-linear nature of expenses.
ANALYSIS:
Water:
The quarterly report for the water fund covers the billing period from July to September. This first quarter has shown a significant increase in revenue collection, surpassing the 25% mark and at 31% of budgeted fiscal year totals. This rise is due to a combination of increased water consumption by customers, compared to the same period last year, when we were at 29%, and rate hikes. It's important to remember that the first quarter includes the summer months, during which we typically see higher water usage. As we move into the winter months, we anticipate that water consumption will decrease. Operating expenditures, which include salaries and wages, benefits, contracted services, debt service payments, cost allocation plan, and transfers out, are tracking at 24%, which is on target for this time of year.
Wastewater:
The quarterly report for the wastewater fund covers the billing period from July to September. This first quarter has shown the fund's revenue collection is at 26% of budgeted fiscal year totals, while expenditures are at 21%, which is below the 25% mark mainly because the Subregional invoicing and payment for the first quarter is for only two months and not three months;, at the end of the fiscal year, the full contractual cost will be expended.
There have been numerousinquiriesregardingwinter average calculations and howthe City calculatesindoorwater usage. Since the City cannot directly measure sewage charges, we use the winter months from December to March to estimate indoor water use, which is a standard method in the industry. This calculation is based on the two lowest meter read periods between December and March each year (known as the winter average). If water usage Agenda Item Number 9 Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
during a billing period is lower than the winter average, sewer charges will be based on actual consumption rather than the winter average. On the back of each customer utility statement, there is useful information that we encourage each customer to read, including the winter average and how to pay your water bill online or sign up for the EyeOnWater portal to manage your water consumption.
Staff has analyzed the number of account delinquenciessince the rate increase went into effect on July 1st. Through the first quarter, there were 304 delinquent accounts compared to 302 accounts during the same period last year.
Additionally, year-to-date penalties for the combined funds are approximately $11,000. We budgeted $17,500. FY 23-24 totals were about $37,000, and the prior year total was about $16,000. Thus, it appears that the budget underestimated revenue from penalties. We plan to update our projections with the mid-year budget report.
PUBLIC COMMENT:
As of the writing of this staff report, the City has not received any public comment on this item. However, if staff receives public comment from interested parties following the publication and distribution of thisstaff report, such comments will be provided to the City Council as supplemental materials before or at the meeting.
COMMUNITY OUTREACH:
This item has been noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the scheduled meeting date.
FISCAL IMPACT:
There is no fiscal impact in receiving this informational financial update.
RESTATED RECOMMENDATION:
That the City Council receive year-to-date financial information.
OPTIONS:
The Council can provide direction on matters related to utility bills and the enterprise funds.
ATTACHMENTS:
Attachment A – Quarterly Financial Reports
Copy of utility bill statement back of bill
Powerpoint presentation
APPROVALS:
Department Head Approval: Approval Date: __10/22/24____ CEQA Determination (Planning): Approval Date: ___N/A_______ The proposed action is / is not exempt from the requirements of the California Environmental Quality Act (CEQA) Administrative Services/Financial Approval: Approval Date: ___10/22/24___ Costs authorized in City Approved Budget: ☐ Yes ☐ No N/A Account Code (f applicable) ___________________________ City Attorney Approval: Approval Date: ____N/A_______
City Manager Approval: Approval Date: __10/31/24____
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
Description
2022-23
Actual
Audited
2023-24
Actual
2024-25
Adopted
Budget
2024-25
Adjusted
Budget
Y-T-D
Actual
9/30/24
% of
Budget
OPERATING REVENUE
3600 - Usage Charges - Residential 2,198,807 2,247,212 3,191,860 1,691,860 550,392 32.5% 3601 - Usage Charges - Commerical 200 500 -0 1,500,000 471,163 31.4% 3300 - Interest Income 67,805 82,685 75,000 75,000 16,721 22.3% 3603 - Backflow Inspections 133 -0 650 650 -0 0.0%
3604 - New Service Fee 16,457 8,700 36,600 36,600 3,450 9.4% 3605 - Water Meter Sales 1,845 190 8,600 8,600 -0 0.0%
3606 - Penalties 7,667 21,591 15,000 15,000 6,042 40.3% 3607 - Other Charges -0 279 2,145 2,145 -0 0.0%
3804 - Insurance Claims 60,185 515 -0 -0 -0 0.0%
3805 - Miscellaneous Income 43,364 155,392 43,000 43,000 874 2.0% TOTAL REVENUE 2,396,463 2,517,065 3,372,855 3,372,855 1,048,642 31.1%
OPERATING EXPENDITURE
Salaries & Wages 286,807 320,497 357,977 357,977 83,040 23.2% Benefits 143,383 158,712 223,277 223,277 57,329 25.7%
Professional Contracted Services 275,989 338,990 255,820 255,820 54,259 21.2% Services & Supplies 180,048 135,842 183,350 183,350 27,501 15.0% Special Programs 12,356 12,596 22,200 22,200 1,324 6.0% Equipment (under $10K) 2,055 - - - - 0.0%
Vehicle Expense - 48 10,000 10,000 - 0.0%
Conference & Training Expense 2,329 2,865 5,000 5,000 3,438 68.8% Utilities 196,877 197,837 247,250 247,250 34,317 13.9%
Telecommunications 5,237 5,729 7,350 7,350 1,312 17.9%
Bad Debt Expense 8,328 13,205 10,000 10,000 227 2.3%
Allocated Insurance 82,414 90,730 79,530 79,530 19,882 25.0% Capital Outlay 31,760 - 27,750 27,750 - 0.0%
Debt Service Payments 351,271 380,175 318,656 318,656 168,592 52.9% Cost Allocation Plan 1,199,387 1,261,494 852,863 852,863 213,216 25.0% Transfers Out 373,129 940,341 120,000 120,000 567 0.5%
TOTAL EXPENDITURES 3,151,369 3,859,061 2,721,023 2,721,023 665,005 24.4% Net Surplus/(Deficit) (754,906) (1,341,996) 651,832 651,832 383,637
WATER OPERATING FUND
QUARTERLY REPORTING
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
Description
2022-23
Actual
Audited
2023-24
Actual
2024-25
Adopted
Budget
2024-25
Adjusted
Budget
Y-T-D
Actual
9/30/24
% of
Budget
OPERATING REVENUE
3610 - Service Charge - Residential 2,915,853 2,814,017 4,647,523 2,277,323 589,505 25.9% 3611 - Service Charge - Commercial -0 -0 -0 2,370,200 606,096 25.6% 3300 - Interest Income 45,617 20,194 -0 -0 -0 0.0%
3606 - Penalties 8,545 15,153 2,500 2,500 5,331 213.2%
3804 - Insurance Claims 47,136 -0 8,729 8,729 -0 0.0%
3805 - Miscellaneous Income 899 32,552 1,000 1,000 -0 0.0% 3999 - Transfers In -0 -0 -0 -0 -0 0.0%
TOTAL REVENUE 3,018,050 2,881,916 4,659,752 4,659,752 1,200,932 25.8%
OPERATING EXPENDITURE
Salaries & Wages 259,143 282,963 306,893 306,893 68,817 22.4% Benefits 138,882 139,103 194,998 194,998 48,896 25.1%
Contracted Services 121,014 84,665 105,550 105,550 3,486 3.3% Subregional Cost 1,737,404 1,952,842 2,118,435 2,118,435 353,073 16.7% Services & Supplies 72,775 29,971 97,200 97,200 3,958 4.1% Special Programs 419 - 1,000 1,000 - 0.0%
Equipment (under $10K) 1,938 - - - - 0.0%
Vehicle Expense - 11,834 10,000 10,000 23 0.2%
Conference & Training Expense 4,658 8,458 8,000 8,000 1,267 15.8% Utilities 58,723 61,875 78,852 78,852 9,005 11.4%
Telecommunications 1,954 1,692 2,500 2,500 268 10.7%
Bad Debt Expense 11,778 19,020 10,000 10,000 359 3.6%
Allocated Insurance 61,761 68,625 55,735 55,735 13,934 25.0% Capital Outlay 32,205 - - - - 0.0%
Debt Service Payments 179,117 181,237 178,656 178,656 119,888 67.1% Cost Allocation Plan 990,306 1,041,462 908,934 908,934 227,234 25.0% Transfers Out 112,641 800,532 32,000 32,000 - 0.0%
TOTAL EXPENDITURES 3,784,720 4,684,279 4,108,753 4,108,753 850,208 20.7% Net Surplus/(Deficit) (766,670) (1,802,363) 550,999 550,999 350,725
WASTEWATER OPERATING FUND
QUARTERLY REPORTING
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
GENERAL INFORMATION
BILLING INQUIRIES: You must contact us immediately
(707) 823-7863 if you have questions or find errors on your bill.
Customer has 30 days from the date of the bill to dispute any charges contained within. After this period, the bill and all charges will be considered undisputed and collectible.
DELINQUENT POLICY: Your account becomes delinquent
if your utility bill has not been paid by due date on billing statement and a delinquency charge of 5% of the unpaid balance will be added. When the due date on the billing statement falls on a Saturday, Sunday or holiday, a payment will not be considered delinquent if it received on the next following business day.
Please visit our website at www.cityofesebastopol.gov for a complete collection (delinquent) policy.
RETURNED CHECK FEE: A fee of $25 will be charged for
all returned check.
AFTER HOURS RESPONSE: Please contact the Police Department at 707-829-4400 for after hours service. A fee of $294 will be charged for Public Works after hours response.
ONLINE PAYMENTS & AUTO PAY: For online billing
options and credit card or direct debit autopay, or one-time payment, visit:
Civic Pay Online - Login (merchanttransact.com)
For direct debit autopay to bank account, download authorization form at City website Water & Sewer Utility Documents & Forms - City of Sebastopol, California
BILLING INFORMATION
GENERAL: Utility billings are for a 2 month period.
FIXED CHARGES: Fixed charges for Water and Sewer are set per meter size and calculates based on the meter read period and apply to all water and sewer accounts. The charges are to assist in recovering the fixed costs of system maintenance, customer service, debt service, meter reading and billing.
WATER USAGE CHARGES: All water accounts in the City
are metered and water usage charges are based on the amount of water you have used during the meter reading period. Bills are computed using units of 1,000 gallons. If your bill shows a usage of 10 units, that would represent a usage of 10,000 gallons of water.
SEWER USAGE CHARGES: Sewer usage charges for customers are based on indoor water use. This is estimated by averaging your water usage using the two lowest meter read periods between December and March of each year (winter average). If the water usage during a billing period is less than the winter average, the sewer charges will be based on consumption, not the winter average.
MOVING: It is the Customer’s responsibility to stop or transfer services if you move within or out of the service area. Please call in advance so that we may schedule the change and close out your account properly. Customers are held responsible for service until notice is given of cancellation and account is closed out. For Property Owners with tenants, the final 4 month billing period is your responsibility regardless of whose name is on the account per Muni Code 13.08.160.
Final Bills must be paid to officially close your account or your account may go to Collections.
PLEASE UPDATE YOUR ACCOUNT INFORMATION BELOW. DO NOT USE THIS FORM TO CANCEL OR START SERVICE. INSTEAD, PLEASE CALL 707-823-7863 AT LEAST TWO BUSINESS DAY PRIOR. THANK YOU.
First Name: ______________________________________________________________________________________________ Service Address: __________________________________ Mailing Address: (if different) ____________________________ City ____________________ State ______ Zip __________ City ____________________________State ______ Zip ________ Home #: ____________________________ Work #____________________________ Cell # ___________________________
Email Address:____________________________________________________________________________________________ Number of Persons in Household (Include Children) _________________________ Effective Date: ___________________ Comments: ______________________________________________________________________________________________ Signature (Required):_______________________________________________________________________________________
PAYMENT INSTRUCTIONS
Please include the return stub with your payment to ensure proper credit to your account. Make checks payable to the "City of Sebastopol." You may mail in your payment, drop off payment, or pay your bill in person and/or over the phone by using your Visa and/or Mastercard at SEBASTOPOL CITY HALL, 7120 BODEGA AVENUE between the hours of 7:30 a.m. and 5:00 p.m. Monday through Thursday, Phone (707) 823-7863. You may make payment online at sebastopol.merchanttransact.com any time City Hall is closed.
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
FY 2024-25
1st Quarter Financial Update
Enterprise Fund
November 19, 2024
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
FY 2024/25 Q1 Water Fund
Overall picture: Revs/ expenses on target; exception is 31% water likely due to summer and rate increases
Similar to same time last year.
Expenses are at 24% of full fiscal year, or on target Adopted
Budget
Actual thru
9/30/24
$ Available
from Budget
Actual As %
of Budget
Revenues $ 3,372,855 $ 1,048,642 $ 2,324,213 31.1%
Expenditures $ 2,721,023 $ 665,005 $ 2,056,018 24.4%
Net Results $ 651,832 $ 383,637
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
FY 2024/25 Q1 Wastewater Fund
The city’s wastewater fund has billed 26% of budgeted revenue for the full fiscal year. Expenses are at 21% of full fiscal year. Operating expenditures are at 21%, because the Subregional invoicing and payment for the first quarter is for only two months and not three months for this time of year.
Adopted
Budget
Actual thru
9/30/24
$ Available
from Budget
Actual As %
of Budget
Revenues $ 4,659,752 $ 1,200,932 $ 3,458,820 25.8%
Expenditures $ 4,108,753 $ 850,208 $ 3,258,545 20.7%
Net Results $ 550,999 $ 350,725
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
• Q1 – 2024 304 Accounts
• Q1 – 2023 302 Accounts
FY 2024/25 Q1 Account Delinquency
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
FY 2024/25 Q1 Penalty Income
FY23-24
Actual
Adopted
Budget
YTD thru
9/30/24
% of Budget
Collected
Water $ 21,591 $ 15,000 $ 6,042 40% 1
Wastewater $ 15,153 $ 2,500 $ 5,331 213% 2
1. The City has received 40% of the budgeted amount for penalty income for water fund.
2. In contrast, the City has received 213% of the budgeted amount for penalty income for wastewater fund.
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024
Council
Questions/Discussions
Agenda Item Number 9
Agenda Item Number 9
City Council Meeting Packet of November 19, 2024