Fund 131 FY10 Fund Balancing - Laserfiche WebLink

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BA:__~,.LINE/SERVICE LEVEL CHANGE,-BEQUEST Date: December 8, 2009 Department: Public Works Department Contact: Becky Carlson Check one: X Baseline Adjustment Service Level Change 1. User Code # 8901 ~ Revenues Fund(s): ~4 = ~I~ewer Ops $ (529,000) 535 -Stormwater Ops $ (915,000) Expenditures Fund(s): 534 -Local Sewer Ops $ 529.000 . 535 -Stormwater Ops $ 915,000 Net $ -0- FTE: -0- 2. Decision Package Title and Brief Description: New City Franchise Fee on City-owned Utilities - The City Manager has indicated intention to develop the FY10 Road Fund budget based on funding assumptions to include one or more proposed new revenues dedicated to funding road operations and maintenance activities in order to close the projected FY10 funding gap of over $3 million and keep the fund solvent in FY10 and beyond. The first of these two proposed new revenue sources is a city franchise fee to be imposed on the city-owned wastewater and Stormwater utilities, in part for the privilege of using city right-of--ways for distribution of utility services. The new franchise fee, which is estimated here at 8% of gross revenues, would be treated as an ordinary operating cost to the utilities and passed on to ratepayers through user fee charges. Additional Explanation for Internal Purposes- The proposal is that this new operating fee would be paid by the city utilities to the General Fund, much like external franchise fees and business licenses are currently reaeipted into the General Fund. The General Fund would then transfer these dedicated revenues to the Road Fund to be used to fund critical street services, per acouncil-approved resolution. The proposed accounting structure and resulting budget transactions would be as follows for FY 10: 534-8999-61865 Franchise Fees Levied on City Utilities (new account) $ 529,000 534-8924-45551 Wastewater User Charges $ (529,000) 535-8999-61865 Franchise Fees Levied on City Utilities (new account) $ 915,000 535-8924-45551 Stormwater User Charges $ (915,000) 011-9931-93131 Transfer to Road Fund $ 1,444,000 011-9901-42301 Franchise Fee Revenue from City Utilities (new account) $(1,444,000) 131-9991-98000 Balance Available- Road Fund $ 1,444,000 ~ 131-9931-48011 Transfer from General Fund $(1,444,000) ~Q ~~~a\ Note: Tfiis transaction results in no new spending authority for Road Fund and no change in the level of Q;,~,, service. It is simply apass-through transaction for the General Fund. The two utility funds report a new operating expense (the franchise fee). and offsetting user charge revenue in the same amount, resulting in no net change in fund position as ~a result of this new fee. 3. Is this aone-time expenditure request? No This action would result in ongoing increased spending aut ority for the two utilities, to allow them to continue collecting and paying to the General fund this city-imposed franchise fee.