2020/01/14 City Council Resolution 2020-008 RESOLUTION NO. 2020-008
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
APPROVING CITY COUNCIL POLICY TO ESTABLISH WATER OPERATING
RESERVE AND WATER RATE STABILIZATION RESERVE AND APPROVING CITY
COUNCIL POLICY TO ESTABLISH SEWER OPERATING RESERVE AND SEWER
RATE STABILIZATION RESERVE
WHEREAS, The Reed Group, Inc. prepared the Water and Sewer Rate Studies that
recommended establishing and maintaining financial reserves; and
WHEREAS; on July 11, 2017 the City Council accepted the Final Water Rate Study
Report and on July 25, 2017 approved Ordinance No. 907 to increase Water Service Rates; and
WHEREAS, on April 24, 2018 the City Council accepted the Final Sewer Rate Study
Report and adopted Resolution 2018-060 to adopt new sewer service rates; and
WHEREAS,the Water and Sewer Rate Studies recommended establishing and
maintaining financial reserves.
NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Rohnert
Park that it does hereby authorize and approve the establishment and maintenance of the Water
Operating Reserve, Water Rate Stabilization Reserve, Sewer Operating Reserve, and Sewer Rate
Stabilization Reserve; and
BE IT FURTHER RESOLVED by the City Council of the City of Rohnert Park that it
does hereby authorize and approve the City Council Policy: Water Operating Reserve and Water
Rate Stabilization Reserve, attached as Exhibit A;
BE IT FURTHER RESOLVED by the City Council of the City of Rohnert Park that it
does hereby authorize and approve the City Council Policy: Sewer Operating Reserve and Sewer
Rate Stabilization Reserve, attached as Exhibit B;
BE IT FURTHER RESOLVED that the City Manager is hereby authorized and
directed to execute documents and take related action pertaining to same for and on behalf of the
City of Rohnert Park.
DULY AND REGULARLY ADOPTED this 14 day of January, 2020.
CITY OF ROHNE I
PARK
JosepVr. Callinan, Mayor
ATTEST:
Sylvia Lopez Cuevas, Assistant City Clerk
Attachments: Exhibit A and Exhibit B
ADAMS: BELFORTE. STAFFORD: MACKENZIE: CALLINAN:
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SUBJECT/TITLE: POLICY NO: APPROVED BY: APPROVAL DATE:
WATER OPERATING RESERVE AND ❑ RESOLUTION
WATER RATE STABILIZATION
RESERVE
1. PURPOSE
The purpose of this policy is to establish a Water Operating Reserve and a Water Rate
Stabilization Reserve. This policy will guide decisions relating to the size and use of these funds.
2. POLICY
To provide working capital and improved cash flows for unplanned operating and maintenance
expenditures,the City establishes the following Water Operating Reserve:
1. The Water Operating Reserve balance target is established at 50%of annual operating
and maintenance costs, including debt service,for the water system.
2. City may assign retained earnings from the Water Operating Fund into the Water
Operating Reserve until the target is met.
3. City Manager, or designee, may authorize assignment of any Water Operating Fund
retained earnings, after the payment of debt service and on-going capital costs, into the
reserve account. Assignment must be consistent with budget policies and procedures.
4. Allowable uses of the Water Operating Reserve are as follows:
a. Unplanned operating and maintenance expenditures for the water system.
5. The Water Operating Reserve may fluctuate above and below the 50%of annual
operating and maintenance costs, including debt service,for the water system target
balance in order to facilitate the allowable uses described above.
6. Once the Water Operating Reserve is fully funded, any unassigned fund balance not
used to pay for operational expenses will be used to fund the Water Rate Stabilization
Reserve.
To help bolster financial stability during drought or other emergency purposes and reduce the
utility's financial risk, the City establishes the following Water Rate Stabilization Reserve:
1. The Water Rate Stabilization Reserve balance target is$1.5 million.
2. City may assign retained earnings from the Water Operating Fund into the Water Rate
Stabilization Reserve until the target is met.
3. City Manager, or designee, may authorize assignment of any Water Operating Fund
unassigned fund balance, after the payment of debt service and on-going capital costs,
into the reserve account. Assignment must be consistent with budget policies and
procedures.
4. Allowable uses of the Water Rate Stabilization Reserve are as follows:
Page 1 of 2
Na�Rrrak CITY OF ROHNERT PARK DRAFT
6x CITY COUNCIL POLICY
SUBJECT/TITLE: POLICY NO: APPROVED BY: APPROVAL DATE:
WATER OPERATING RESERVE AND ❑ RESOLUTION
WATER RATE STABILIZATION
RESERVE
a. reduce any financial deficit created by water revenue shortage conditions, or
b. reduce the financial impact of extended damage to facilities or accessory objects
(appurtenances)from natural disasters or declared emergency events.
5. The Water Rate Stabilization Reserve may fluctuate above and below the $1.5 million
target balance in order to facilitate the allowable uses described above.
6. Once the Water Rate Stabilization Reserve is fully funded, any unassigned fund balance
not used to pay for operational expenses will remain in Water Operating Fund balance.
3. BACKGROUND
The establishment of a Water Operating Reserve and a Water Rate Stabilization Reserve was
recommended in the Water Rate Study prepared for the City.
REVISION HISTORY:
Page 2 of 2
CITY OF ROHNERT PARK DRAFT
b. CITY COUNCIL POLICY
SUBJECT/TITLE: POLICY NO: APPROVED BY: APPROVAL DATE:-
SEWER
ATE:SEWER OPERATING RESERVE AND ❑ RESOLUTION
SEWER RATE STABILIZATION
RESERVE
1. PURPOSE
The purpose of this policy is to establish a Sewer Operating Reserve and a Sewer Rate
Stabilization Reserve. This policy will guide decisions relating to the size and use of these
Reserves.
2. POLICY
To provide working capital and improved cash flows for unplanned operating and maintenance
expenditures,the City establishes the following Sewer Operating Reserve:
1. The Sewer Operating Reserve balance target is established at 50%of annual operating
and maintenance costs, including debt service,for the sewer system.
2. City may assign retained earnings from the Sewer Operating Fund into the Sewer
Operating Reserve until the target is met.
3. City Manager, or designee, may authorize assignment of any Sewer Operating Fund
retained earnings, after the payment of debt service and on-going capital costs, into the
reserve account. Assignment must be consistent with budget policies and procedures.
4. Allowable uses of the Sewer Operating Reserve are as follows:
a. Unplanned operating and maintenance expenditures for the sewer system.
5. The Sewer Operating Reserve may fluctuate above and below the 50%of annual
operating and maintenance costs, including debt service, for the sewer system target
balance in order to facilitate the allowable uses described above.
6. Once the Sewer Operating Reserve is fully funded, any unassigned fund balance not
used to pay for operational expenses will be used to fund the Sewer Rate Stabilization
Reserve.
To help bolster financial stability during drought or other emergency purposes and reduce the
utility's financial risk,the City establishes the following Sewer Rate Stabilization Reserve:
1. The Sewer Rate Stabilization Reserve balance target is$1.5 million.
2. City may assign retained earnings from the Sewer Operating Fund into the Sewer Rate
Stabilization Reserve until the target is met.
3. City Manager, or designee, may authorize assignment of any Sewer Operating Fund
unassigned fund balance, after the payment of debt service and on-going capital costs,
into the reserve account. Assignment must be consistent with budget policies and
procedures.
Page 1 of 2
CITY OF ROHNERT PARK DRAFT
U` CITY COUNCIL POLICY
SUBJECT/TITLE: POLICY NO: APPROVED BY: APPROVAL DATE:
SEWER OPERATING RESERVE AND ❑ RESOLUTION
SEWER RATE STABILIZATION
RESERVE
4. Allowable uses of the Sewer Rate Stabilization Reserve are as follows:
a. reduce any financial deficit created by sewer revenue shortage conditions, or
b. reduce the financial impact of extended damage to facilities or accessory objects
(appurtenances) from natural disasters or declared emergency events.
5. The Sewer Rate Stabilization Reserve may fluctuate above and below the $1.5 million
target balance in order to facilitate the allowable uses described above.
6. Once the Sewer Rate Stabilization Reserve is fully funded, any unassigned fund balance
not used to pay for operational expenses will remain in Sewer Operating Fund balance.
3. BACKGROUND
The establishment of a Sewer Operating Reserve and a Sewer Rate Stabilization Reserve was
recommended in the Sewer Rate Study prepared for the City.
REVISION HISTORY:
Page 2 of 2