Laserfiche WebLink
Department Approval <br />��� <br />Item Description: <br />1� � <br />��'"'' <br />REQUEST FOR COUNCIL ACTION <br />Date: 09/14/15 <br />Item No.: 8.f <br />City Manager Approval <br />Consider a Permanent Cash Transfer from the City's Stormwater Fund to the <br />Water Fund <br />BACKGROUND <br />On a few occasions during the past year, the Council has indicated support for forgiving the internal <br />� cash loan from the Stormwater Fund to the Water Fund by categorizing it as a permanent transfer. <br />As of 12/31/14 the Water Fund held a$2.5 million internal cash loan from the Stormwater Fund. The <br />loan amount grew significantly in 2014 with the refurbishment of the water tower and the accelerated <br />roll-out of the Automated Meter Reading project. Prior to these one-time projects, the Water Fund had <br />� been steadily re-paying the loan. However, given the current loan amount the Water Fund would likely <br />take 5 or more years to fully repay it. <br />The presence of the internal loan is not in of itself an impediment to demonstrating a strong financial <br />condition. This is evidenced by the fact that Standard & Poor's recently affirmed the City's Triple-A <br />financial rating. That being said, forgiving the loan won't have an adverse impact either on the City's <br />overall condition. <br />�� � What will be impacted is the long-term Water and Stormwater rates — specifically the base rate. <br />Forgiving the loan will allow the water base rate to remain steady for the next year or two, while the <br />stormwater base rate will need to increase at a faster rate than currently projected. There is time <br />however to gradually increase those rates over the next 5-6 years if need be. <br />The Council is asked to consider adopting the attached resolution authorizing the permanent transfer of <br />funds between the Stormwater and Water Funds. The resolution is included in Attach�nent A. <br />POLICY OBJECTIVE <br />Not applicable. <br />FINANCIAL IMPACTS <br />Not applicable. <br />STAFF RECOMMENDATION <br />Staff recommends the Council adopt the attached resolution authorizing the permanent transfer of funds <br />between the Stormwater and Water Funds. <br />Page 1 of 4 <br />