REPORT TO COUNCIL
SUBJECT
Title
Approve Budget Modification No. 31 to Increase the Budgeted Amount to Purchase Water Meters for New Developments
Report
BACKGROUND
Over the past three years, the City has been experiencing very high development activity. This impacts City operations in many ways, including the water, sewer, and garbage and recycling utilities. Each new development project, regardless of type, connects to the City's water and sewer systems, and has to allocate space and facilities for the removal of garbage and recyclables. With regards to water service, the City delivers and bills for water service through water meters at each property and therefore requires the installation of water meters at each new development. The City budgets and accounts for water meters purchased for new development projects through a capital project, which keeps expenses for development related meters separate from those that are maintained and replaced through the regular operating budget. The project provides for the purchase, testing and installation of water meters, detector checks, vaults and backflow prevention devices for new developments and customers. Costs for this project are offset by developers who normally deposit funds with the City 12 to 18 months before the meters are ordered for installation. Additionally, project funding allows staff to purchase equipment ahead of time, taking advantage of bulk purchasing, and so installation can happen promptly, providing better customer service.
The budget for development related water meters is estimated based on historical average expenditures. However, due to the current high level of activity, approval of Budget Modification No. 31 is being requested to increase the budget by $191,590 for a total of $273,190 for FY 2014/15.
ENVIRONMENTAL REVIEW
This is not a project as defined in Section 15378 of the Guidelines to the California Environmental Quality Act (CEQA) because it can be seen with certainty that there is no possibility that the activity in question may have a significant impact on the environmental (CEQA Guideline 15061(b)(3)).
DISCUSSION
The total available budget for FY 2014/15 is $81,600. However, to date water meter orders to support new land developments throughout the City have reached $140,000. In addition, based on pending new developments, approximately $133,500 in additional cost will be incurred. As a result, staff has estimated that this project needs to be increased by $191,590 for a total project amount of $273,190. This estimate is based on future expected meter costs associated with several large residential housing and mixed use projects, as well as continued commercial development including the Moffett Park development where multiple large sized meters will be required.
FISCAL IMPACT
Budget Modification No. 31 has been created to provide additional funding for this project. Funding for this budget modification will come from the Water Supply and Distribution Fund Rate Stabilization Reserve. However, all costs associated with purchasing meters for new development are recovered from developers. Over the past several years, revenues have exceeded expectations, with the most recent year totaling approximately $220,000 and current year revenues are on track to meet projections. Therefore the impact on the Rate Stabilization Reserve is mitigated by a corresponding increase in revenue.
Budget Modification No. 31
FY 2014/15
|
Current |
Increase/ (Decrease) |
Revised |
Water Supply and Distribution Fund |
|
|
|
Expenditures |
|
|
|
Project 806351 - Water Meters and Flow Devices for New Developments |
$81,600 |
$191,590 |
$273,190 |
|
|
|
|
Reserves |
|
|
|
Water Supply and Distribution Fund Rate Stabilization Reserve |
$3,330,411 |
($191,590) |
$3,138,821 |
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
Approve Budget Modification No. 31 to Increase the Current Year Budgeted Amount for the Water Meters for New Development Project by $191,590.
Staff
Prepared by: Mansour Nasser, Water & Sewer Division Manager
Reviewed by: Grace K. Leung, Director of Finance
Reviewed by: John Stufflebean, Director of Environmental Services
Reviewed by: Robert A. Walker, Assistant City Manager
Approved by: Deanna J. Santana, City Manager