Loading...
HomeMy WebLinkAbout1998-01-12 City Council (10)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 10 FROM:CITY MANAGER DEPARTMENT: UTILITIES DATE:JANUARY 12, 1998 CMR.q02:98 SUBJECT: REQUEST FOR APPROVAL OF A BUDGET AMENDMENT ORDINANCE FOR WATER AND GAS SYSTEM EXTENSION CAPITAL PROJECTS REPORT IN BRIEF This report requests that Council approve a Budget Amendment Ordinance in the amount of $90,000 for Water and Gas System Extension Capital Projects. The Water (8013) and Gas (8017) System Extension Capital Projects will receive $60,000 and $30,000 respectively. The Water and Gas System Extension Capital Projects install new customer services and .main extensions for new customers. These capital projects are installing many more new services than staff anticipated during the budgeting process for these capital projects. The City is reimbursed approximately 75% of the costs of installing new services. This Budget Amendment Ordinance will result in a net reduction in Utility Fund reserves of $22,500. CMR:102:98 Page 1 of 3 RECOMMENDATION Staff recommends the City Council adopt the attached Budget Amendment Ordinance in the amount of $90,000 for the Water and Gas System ExtensionCapital Projects. BACKGROUND The City of Palo Alto Municipal Code places budgetary controls on capital improvement projects and does not allow additional appropriations to capital improvement projects without Council approval. There are two capital projects in the Water and Gas Utilities that provide design and connection services to customers. These are for the connection of water and gas service from private property to the mains in the streets. The City is reimbursed approximately 75 percent of the costs for these services by the individual customers. DISCUSSION The volume of new design and connection services is directly linked to the continuing new building construction and remodeling activity, and is very difficult for staff to forecast accurately. During the current fiscal year, the number of service requests has, for the second consecutive fiscal year, surpassed staff estimates, primarily because of the continuing booming economy and Palo Alto’s strong real estate market. Based upon the service requests received in the first five months of the fiscal year, the Water and Gas System Extension Capital Projects will be underfunded by the end of the year, unless an additional appropriation is made for each capital project. Customer demand is expected to remain strong for the remainder of the fiscal year. Consequently, in order to continue to meet customer demand, the actual costs for the Water System Extensions (8013) and Gas System Extensions (8017) are projected to exceed their approved budgets by $60,000 and $30,000, respectively, by the end of the fiscal year. This increase would bring the total expenditure budget for the Water System Extensions capital project to $212,000 and the Gas System Extensions capital project to $312,761. The revenues associated with Water and Gas Design and Connection services will also be increased, resulting in minimal net fiscal impact. RESOURCE IMPACT A Budget Amendment Ordinance is requested to increase the appropriation for Water System Extensions (8013), in the amount of $60,000, and Gas System Extensions (8017), in the amount of $30,000. Revenues will be correspondingly increased by $45,000 and $22,500 within the respective projects. The Budget Amendment Ordinance will result in a net reduction in utility fund reserves of $22,500. POLICY IMPLICATIONS This report does not represent any change to existing City policies. CMR: 102:98 Page 2 of 3 ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA) and is categorically exempt. ATTACHMENTS Budget Amendment Ordinance PREPARED BY: Roger Cwiak, Engineering Manager WGW DEPARTMENT HEAD REVIEW: Jo Director of Utilities CITY MANAGER APPROVAL: FLEMING Manager CMR: 102:98 Page 3 of 3 ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1997-98 FOR FUNDING OF INCREASED WORK IN WATER AND GAS CUSTOMER DESIGN AND CONNECTION CAPITAL IMPROVEMENT PROJECTS WHEREAS, pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 23, 1997 did adopt a budget for fiscal year 1997-98; and WHEREAS, Capital Improvement Projects 8013 and 8017 and were created to provide design and construction connections to water. and gas customers, respectively; and WHEREAS, the City of Palo Alto has experienced a substantial increase in the number of customers requesting design and connection services due to increased business and residential development activity; and WHEREAS,. there is insufficient funding in these Capital Improvement Projects to support this level of activity for the remainder of the fiscal year and the appropriations for the projects need to be increased; and WHEREAS, private property owners requesting these services reimburse the utility approximately 75% of the cost of the service; and WHEREAS, City Council authorization is needed to amend the 1997-98 budget as hereinafter set forth. NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTION I. The sum of Sixty Thousand Dollars ($60,000) is hereby appropriated to Capital Improvement Project Number 8013, Water Systems Extensions, and the Water Rate Stabilization Reserve is correspondingly reduced. SECTION 2. Revenue from billable work in Capital Improvement Project Number 8013 is increased by the sum of Forty .Five Thousand Dollars ($45,000), and the Water Rate Stabilization Reserve is correspondingly increased. SECTION 3. This transaction will reduce the Water Rate Stabilization Reserve from $6,062,900 to $6,047,900. SECTION 4. The sum of Thirty Thousand Dollars ($30,.000) is hereby appropriated to Capital Improvement Project Number 8017, Gas System Extensions, andthe Gas Rate Stabilization Reserve is correspondingly reduced. SECTION 5. Revenue from billable work in Capital Improvement Project Number 8017 is increased by the sum of Twenty Two Thousand and Five Hundred Dollars ($22,500), and the Gas Rate Stabilization Reserve is correspondingly increased. SECTION’6. This transaction will reduce the Gas Rate Stabilization Reserve from $11,342,000 to $11,334,500. SECTION 7. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thi.rds vote of the City Council is required to adopt this ordinance. SECTION 8. This project has been determined to be categorically exempt under Sections 15302 and 15303 of the California Environmental Quality Act. SECTION 9.. As provided in Section 2.04.350 of the PaSo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES NOES: ABSTENTIONS; ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM:City Manager Senior Asst. City Attorney Acting Director,~Administrative Services Department Director of Utilities