HomeMy WebLinkAboutReport - Compliance with Proposition 218 Rules - Relative to Council/Agency Meeting Held: 1 3k0, a.o
Deferred/Continued to: R ZYJ 97 .
Approved ❑ Conditionally Approved ❑ Denied City Clerk Signature
Council Meeting Date: July 21, 1997 Department ID Number: AS 97-027
811 J?7 G��ya6+►ee0 -�
CITY O HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: MICHAEL T. UBERUAGA, City Administra
PREPARED BY: ROBERT J. FRANZ, Deputy City Administrato
SUBJECT: PROPOSITION 218 .COMPLIANCE
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue: All City taxes, assessment and fees or charges imposed "on a person
as an incident of property ownership" must be in compliance with Proposition 218 rules as of
July 1, 1997.
Funding Source: Not applicable.
Recommended Action: 1. Motion to receive and file this report on Proposition 218, and 2.
Request staff to further review and document appropriate General Fund charges to the
Water Fund.
Alternative Action(s):
1. Suspend the City's 15% "in lieu" payment from the Water Fund to the General
Fund pending the outcome of anticipated Proposition 218 litigation on the issue
of whether water fees meet the Proposition 218 definition of property related
fees, and
2. Increase the City's charges to the Water Fund to cover all General Fund costs
based on the report of the outside consultant Peasley, Aldinger and
O'Bymachow.
Analysis: City staff has reviewed all City taxes, assessments, fees, and charges to
determine if there are any of our revenues that are subject to the new provisions of
Proposition 218. Based on this comprehensive review, two water fund fees ("In lieu"
payments to the General Fund and the Capital Surcharge) appear to be the only City taxes,
assessments or fees potentially affected by Proposition 218.
t
A-6 Vr. Attachments
(h) "Property-related service"means a public service having a direct relationship to property
ownership.
(i)"Special benefit" means a particular and distinct benefit over and above general benefits E
conferred on real property located in the district or to the public at large. General enhancement
of property value does not constitute"special benefit."
SEC.3. Property Taxes,Assessments, Fees and Charges Limited (a)No tax,assessment,
fee,or charge shall be assessed by any agency upon any parcel of property or upon any person as
an incident of property ownership except:
(1)The ad valorem property tax imposed pursuant to Article KM and Article NM A.
(2)Any special tax receiving a two-thirds vote pursuant to Section 4 of Article)=A.
(3)Assessments as provided by this article.
(4)Fees or charges for property related services as provided by this article.
(b)For purposes of this article, fees for the provision of electrical or gas service shall not be
deemed charges or fees imposed as an incident of property ownership.
SEC.4.Procedures and Requirements for All Assessments. (a)An agency which proposes
to levy an assessment shall identify all parcels which will have a special benefit conferred upon
them and upon which an assessment will be imposed. The proportionate special benefit derived
by each identified parcel shall be determined in relationship to the entirety of the capital cost of a
public improvement,the maintenance and operation expenses of a public improvement,or the
cost of the property related service being provided. No assessment shall be imposed on any
parcel which exceeds the reasonable cost of the proportional special benefit conferred on that
parcel. Only special benefits are assessable,and an agency shall separate the general benefits
from the special benefits conferred on a parcel. Parcels within a district that are owned or used
by any agency,the State of California or the United States shall not be exempt from assessment
unless the agency can demonstrate by clear and convincing evidence that those publicly owned
parcels in fact receive no special benefit.
(b)All assessments shall be supported by a detailed engineer's report prepared by a registered
professional engineer certified by the State of California.
PROPOSITION 218 -4
League of California Cities Proposition 218 Implementation Guide
January 1997
VI. Attachments A-5
i
ARTICLE XIII D
SECTION 1.Application. Notwithstanding any other provision of law,the provisions of this -
article shall apply to all assessments, fees and charges,whether imposed pursuant to state statute
or local government charter authority. Nothing in this article or.Article XIII C shall be construed
to:
(a)Provide any new authority to any agency to impose a tax,assessment, fee,or charge.
(b)Affect existing laws relating to the imposition of fees or charges as a condition of property
development.
(c)Affect existing laws relating to the imposition of timber yield taxes.
SEC.2.Definitions. As used in this article: _
(a) "Agency" means any local government as defined in subdivision(b)of Section 1 of Article
XIII C.
(b)"Assessment" means any levy or charge upon real property by an agency for a special benefit
conferred upon the real property. "Assessment" includes,but is not limited to, "special
assessment," "benefit assessment," "maintenance assessment" and"special assessment
(c)"Capital cost" means the cost of acquisition,installation,construction,reconstruction,or
replacement of a permanent public improvement by an agency.
(d) "District"means an area determined by an agency to contain all parcels which will receive a
special benefit from a proposed public improvement or property-related service.
(e)"Fee" or"charge" means any levy other than an ad valorem tax,a special tax,or an
assessment, imposed by an agency upon a parcel or upon a person as an incident of property
ownership, including a user fee or charge for a property related service.
(f) "Maintenance and operation expenses" means the cost of rent,repair, replacement,
rehabilitation, fuel, power,electrical current,care,and supervision necessary to properly operate
and maintain a permanent public improvement.
(g) "Property ownership" shall be deemed to include tenancies of real property where tenants are
directly liable to pay the assessment, fee,or charge in question.
PROPOSITION 218 -3
League of California Cities Proposition 218 Implementation Guide
January 1997
A-4 VI. Attachments
SEC. 2. Local Government Tax Limitation. Notwithstanding any other provision of this
Constitution:
(a) All taxes imposed by any local government shall be deemed to be either general taxes or
special taxes. Special purpose districts or agencies, including school districts,shall have no
power to levy general taxes.
(b)No local government may impose,extend,or increase any general tax unless and until that
tax is submitted to the electorate and approved by a majority vote. A general tax shall not be
deemed to have been increased if it is imposed at a rate not higher than the maximum rate so
approved. The election required by this subdivision shall be consolidated with a regularly
scheduled general election for members of the governing body of the local government, except in
cases of emergency declared by a unanimous vote of the governing body.
(c)Any general tax imposed, extended,or increased,without voter approval,by any local
government on or after January 1, 1995,and prior to the effective date of this article, shall
continue to be imposed only if approved by a majority vote of the voters voting in an election on
the issue of the imposition,which election shall be held within two years of the effective date of
this article and in compliance with subdivision(b).
(d)No local government may impose,extend,or increase any special tax unless and until that a�
tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be
deemed to have been increased if it is imposed at a rate not higher than the maximum rate so
approved.
SEC.3.Initiative Power for Local Taxes,Assessments,Fees and Charges. Notwithstanding
any other provision of this Constitution,including,but not limited to,Sections 8 and 9 of Article
12;the initiative power shall not be prohibited or otherwise limited in matters of reducing or
repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes,
assessments, fees and charges shall be applicable to all local governments and neither the
Legislature nor any local government charter shall impose a signature requirement higher than
that applicable to statewide statutory initiatives.
SECTION 4.ASSESSMENT AND PROPERTY RELATED FEE REFORM.
Article XM D is added to the California Constitution to read:
m
PROPOSITION 218 -2
League of California Cities Proposition 218 Implementation Guide
January 1997 -
VI. Attachments A-3
PROPOSITION 218
TAXATION—VOTER APPROVAL OF LOCAL TAXES, ETC.—INITIATIVE
CONSTITUTIONAL AMENDMENT
This initiative measure is submitted to the people in accordance with the provisions of Article IL
Section 8 of the Constitution.
PROPOSED ADDITION OF ARTICLE XIII C AuND ARTICLE XIII D
RIGHT TO VOTE ON TAXES ACT
SECTION 1.TITLE. This act shall be known and may be cited as the"Right to Vote on Taxes
Act."
SECTION 2.FIIi WNGS AND DECLARATIONS. The people of the State of California
hereby find and declare that Proposition 13 was intended to provide effective tax relief and to
require voter approval of tax increases. However, local governments have subjected taxpayers to
excessive tax,assessment,fee and charge increases that not only frustrate the purposes of voter
approval for tax increases,but also threaten the economic security of all Californians and the
California economy itself. This measure protects taxpayers by limiting the methods by which
local governments exact revenue from taxpayers without their consent.
SECTION 3. VOTER APPROVAL FOR LOCAL TAX LEVIES. Article XIII C is added to the
California Constitution to read:
CONST Prec. Art.XIII C, § 1
ARTICLE XIII C
SECTION 1. Definitions. As used in this article:
(a)"General tax"means any tax imposed for general governmental purposes.
(b)"Local government" means any county,city,city and county,including a charter city or
county, any special district,or any other local or regional governmental entity.
(c)"Special district" means an agency of the state, formed pursuant to general law or a special
act, for the,local performance of governmental or proprietary functions with limited geographic
boundaries including,but not limited to,school districts and redevelopment agencies.
(d) "Special tax" means any tax imposed for specific purposes, including a tax imposed for
specific purposes,which is placed into a general fund.
PROPOSITION 18 - 1
League of California Cities Proposition 218 Implementation Guide
January 1997
ATTACHMENT #5
14.12.130-14.12.170 Huntingtc ch Municipal Code
notice, the department shall read the water meter, shut off the water from the premises and
immediately present the consumer all unpaid bills for water furnished by the City to him up.to that
time. Thereupon the consumer shall pay said bills to the Water Department. In the event that the
consumer shall have made a deposit with the department, as required in Section 14.12.090, the
balance, if any, of such deposit shall be returned to the consumer after deducting therefrom the
amount of said bills. Until such notice and payments shall have been made, the premises shall be
deemed occupied by the consumer and his liability continued. (674-ivs7)
14.1-2.140 Change of address. Failure to receive mail will not be recognized as a valid excuse
for failure to pay water rates when due. Change in occupancy of property supplied with City
water, and changes in mailing addresses of consumers of City water must be filed in writing at the
Water Department on forms provided for that purpose. (674-121"
14.12.150 Renewing service. Each owner or occupant of any premises previously connected
with the City water system desiring to renew the use of water shall make application for renewal
of water service and upon payment of all unpaid charges, if any, together with any turn-on charge
imposed by Section 14.12.100, the water will be turned on. (674-12/57)
14.12.160 Adiustment of rates. The Council shall have the sole power to grant rebates from
the rates specified in this chapter to indigent persons, and in the event of any dispute as to the
water rate to be paid by any consumer, it shall determine the same. (674-1z,57)
— 14.12.170 Water fund. All moneys collected from fees and charges under Chapters 14.04
through 14.20 of the Huntington Beach Municipal Code shall be deposited in the treasury of the
City in a water fund and annually there shall be disbursed from said water fund to the general
fund, an amount equal to fifteen (1 S%) percent of the gross revenue received from the sale of
water by the Water Department in lieu of franchise and property taxes. (7 12159)
11/95
i
City Council Meeting - July 21 , 1997
Summary
•► City Attorney has Reviewed Proposition
218 Legal Opinions
•► City Attorney and.Administrative Staff
Have Attended League of California Cities
Workshops on Implementation of
Proposition 218 (November 1996 & in
January 1997)
•► Legal Challenges Will be Monitored
•► State Legislation Will be Monitored
Slide 7
Agenda Item F-2
City Council Meeting - July 21 , 1997
° J Legal Review - Capital
Surcharge
* City can Continue Collection of In
Water Capital Surcharge
.► Proposition 218 Does Not Apply to
Consumption-Based Water Rates (capital
Surcharge is Based on Consumption -not Property
Ownership)
Capital Surcharge is to Fund Capital
Facilities Annually (Pay as You Go)
Slides
In-Lieu Payment
Are Water Rates"Property Related"Fees?
Yes No
Does Prop.218 Apply to NO Continue"In Lieu"
Existing Fees? Payments
Yes
No
Is"In Lieu" Payment More Than
Cost of General Fund Service?
Yes
Stop Excess"In Lieu"
Payments
Agenda Item F-2
...City Council Meeting - July 21 , 1997
O�J
Liu City Fees Reviewed
Water In Lieu Payment (1959 ordinance)
* 15% of Water Revenues paid to General
Fund in lieu of Franchise Fees and
Property Taxes Not paid by City Water
utility.
# $3.3 million in 1996/97
Water Capital Fees (1995 ordinance)
* $4.3 million for 1996/97
* 11 year Capital Improvement Program
Slide 3
Legal Review - In Lieu
Payment
City can Continue Collection of In
Lieu Payment
• Proposition 218 Does Not Apply to
Consumption-Based Water Rates (in Lieu
Payment is Based on Consumption -not Property
Ownership)
• In Lieu Payment is Less than Cost of
Services
Slide 4
Agenda Item F-2
City Council Meeting - July 21 , JZFROM
AND MADE A PART OF THE RECORD AT THE
COUNCIL MEETING OF__...?�'1
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY,CITY CLERK
O�
Proposition 21 -8
Complia
nce
Proposition 218: Three
Sections
*Taxes
*Property Assessments
•►Property-Related Fees
City revenues are in compliance with all
requirements of Proposition 218
Slick 2
Agenda Item F-2
A-10 VI. Attachments
SECTION 6. SEVERABELM. If any provision of this act,or part thereof, is for any reason
held to be invalid or unconstitutional,the remaining sections shall not be affected,but shall
remain in full force and effect, and to this end the provisions of this act are severable.
PROPOSITION 218 - 8
:s
League of California Cities Proposition 218 Implementation Guide
January 1997
VL Attachments A-9
i
i
the proposed fee or charge are presented by a majority of owners of the identified parcels,the
agency shall not impose the fee or charge.
i
' (b)Requirements for Existing,New or Increased Fees and Charges. A fee or charge shall not be
.extended, imposed,or increased by any agency unless it meets all of the following requirements:
(1)Revenues derived from the fee or charge shall not exceed the funds required to provide the
property related service.
(2)Revenues derived from the fee or charge shall not be used for any purpose other than that for
which the fee or charge was imposed.
(3)The amount of a fee or charge imposed upon any parcel or person as an incident of property
ownership shall not exceed the proportional cost of the service attributable to the parcel.
(4)No fee or charge may be imposed for a service unless that service is actually used by, or
immediately available to, the owner of the property in question. Fees or charges based on
potential or future use of a service are not permitted. Standby charges,whether characterized as
charges or assessments,shall be classified as assessments and shall not be imposed without
compliance with Section 4.
(5)No fee or charge may be imposed for general governmental services including,but not
limited to,police, fire, ambulance or library services,where the service is available to the public
at large in substantially the same manner as it is to property owners. Reliance by an agency on
any parcel map, including,but not limited to, an assessor's parcel map,may be considered a
significant factor in determining whether a fee or charge is imposed as an incident of property
ownership for purposes of this article. In any legal action contesting the validity of a fee or
charge, the burden shall be on the agency to demonstrate compliance with this article.
(c)Voter Approval for New or Increased Fees and Charges. Except for fees or charges for
sewer, water,and refuse collection services,no property related fee or charge shall be imposed or
increased unless and until that fee or charge is submitted and approved by a majority vote of the
property owners of the property subject to the fee or charge or,at the option of the agency,by a
two-thirds vote of the electorate residing in the affected area. The election shall be conducted not
less than 45 days after the public hearing. An agency may adopt procedures similar to those for
increases in assessments in the conduct of elections under this subdivision.
(d)Beginning July 1. 1997, all fees or charges shall comply with this section.
SECTION 5. LIBERAL. CONSTRUCTION. The pro%isions of this act shall be liberally
construed to effectuate its purposes of limiting local government revenue and enhancing taxpayer
consent.
PROPOSITION 218 -7
League of California Cities Proposition 218 Implementation Guide
January 1997
A-8 VI. Attachments
Beginning July 1, 1997, all existing,new, or increased assessments shall comply with this article. -
Notwithstanding the foregoing,the following assessments existing on the effective date of this
article shall be exempt from the procedures and approval process set forth in Section 4:
(a)Any assessment imposed exclusively to finance the capital costs or maintenance and
operation expenses for sidewalks, streets,sewers,water, flood control,drainage systems or
vector control. Subsequent increases in such assessments shall be subject to the procedures and
approval process set forth in Section 4.
(b)Any assessment imposed pursuant to a petition signed by the persons owning all of the
parcels subject to the assessment at the time the assessment is initially imposed. Subsequent
increases in such assessments shall be subject to the procedures and approval process set forth in
Section 4.
(c)Any assessment the proceeds of which are exclusively used to repay bonded indebtedness of _—
which the failure to pay would violate the Contract Impairment Clause of the Constitution of the
United States.
(d)Any assessment which previously received majority voter approval from the voters voting in
an election on the issue of the assessment. Subsequent increases in those assessments shall be
subject to the procedures and approval process set forth in Section 4.
SEC. 6. Property Related Fees and Charges. (a)Procedures for New or Increased Fees and
Charges. An agency shall follow the procedures pursuant to this section in imposing or
increasing any fee or charge as defined pursuant to this article; including,but not limited to, the
following:
(1)The parcels upon which a fee or charge is proposed for imposition shall be identified. The
amount of the fee or charge proposed to be imposed upon each parcel shall be calculated. The
agency shall provide written notice by mail of the proposed fee or charge to the record owner of
each identified parcel upon which the fee or charge is proposed for imposition,the amount of the
fee or charge proposed to be imposed upon each,the basis upon which the amount of the
proposed fee or charge was calculated,the reason for the fee or charge,together with the date,
time, and location of a public heating on the proposed fee or charge.
(2)The agency shall conduct a public hearing upon the proposed fee or charge not less than 45
days after mailing the notice of the proposed fee or charge to the record owners of each identified
parcel upon which the fee or charge is proposed for imposition. At the public hearing,the
agency shall consider all protests against the proposed fee or charge. If written protests against
PROPOSITION 218-6
League of California Cities Proposition 218 Implementation Guide
January1997
V1. Attachments A-7
(c)The amount of the proposed assessment for each identified parcel shall be calculated and the
record owner of each parcel shall be given written notice by mail of the proposed assessment,the
total amount thereof chargeable to the entire district,the amount chargeable to the owner's
particular parcel,the duration of the payments,the reason for the assessment and the basis upon
which the amount of the proposed assessment was calculated,together with the date,time,and
location of a public hearing on the proposed assessment. Each notice shall also include, in a
conspicuous place thereon,a summary of the procedures applicable to the completion,return,
and tabulation of the ballots required pursuant to subdivision(d), including a disclosure
statement that the existence of a majority protest, as defined in subdivision(e),will result in the
assessment not being imposed.
(d)Each notice mailed to owners of identified parcels within the district pursuant to subdivision
(c)shall contain a ballot which includes the agency's address for receipt of the ballot once
completed by any owner receiving the notice whereby the owner may indicate his or her name,
reasonable identification of the parcel, and his or her support or opposition to the proposed
assessment.
(e)The agency shall conduct a public hearing upon the proposed assessment not less than 45
days after mailing the notice of the proposed assessment to record owners of each identified
parcel. At the public hearing, the agency shall consider all protests against the proposed
assessment and tabulate the ballots. The agency shall not impose an assessment if there is a
majority protest. A majority protest exists if,upon the conclusion of the hearing,ballots
submitted in opposition to the assessment exceed the ballots submitted in favor of the
assessment. In tabulating the ballots, the ballots shall be weighted according to the proportional
financial obligation of the affected property.
(f)In any legal action contesting the validity of any assessment,the burden shall be on the
agency to demonstrate that the property or properties in question receive a special benefit over
and above the benefits conferred on the public at large and that the amount of any contested
assessment is proportional to,and no greater than,the benefits conferred on the property or
properties in question.
(g)Because only special benefits are assessable,electors residing within the district who do not
own property within the district shall not be deemed under this Constitution to have been
deprived of the right to vote for any assessment. If a court determines that the Constitution of the
United States or other federal law requires otherwise,the assessment shall not be imposed unless
approved by a two-thirds vote of the electorate in the district in addition to being approved by the
property owners as required by subdivision(e).
SEC.5. Effective Date. Pursuant to subdivision(a)of Section 10 of Article 11,the provisions
of this article shall become effective the day after the election unless otherwise provided.
PROPOSITION '_18 -5
League of California Cities Proposition 218 implementation Guide
January 1997
ATTACHMENT #4
City of Huntington Beach Step 5:Allocate Replacement Costs
Replacement Cost t1r Ptifnary Seconds
based on MSI study Total Allocation Rate to Allocation to- Alloeatron Total Total ;ss
Flied Asset:: Allocation Public Water Publle. Wafer to Alloeatioq Atloeattaii;
Replacemot: Method Works Works 1Aleter Amount f¢Watel:E'
Public Works Total 7 232 547
Administration 7 eW EE 23%N
Engineering Administration 22,950; EE 23% 57 SubdivisonEnginerring 16241? EE 23% 5Storm Drain Pollution Control 9lB8;51.6.; NIA 0%Engineering Construction EE 23%
Engineering Design 30e20 EE 23% 4T- 7147Traffic Engineering 437M: N!A - 0% - _
Traffic Maintenance ;: i-.!; NIA 0% - - --- ''
Traffic Signal Maintenance =` NIA 0%
;...
Maintenance Administration 19;5811 EE 23% 4$70 4 S70
Vandalism a:r> EE 23%
Hazmat Control NIA 0%
Fleet Management EE 23%
Equipment Maintenance 40,75Q EE 23%
Vehicle Body Maintenance EE 23%
Building Maintenance 31;180 EE 23% 7 277 T 2T7,
Central Warehouse 58;860 EE 23% 13 691'
Building Materials NIA 0%
Painting Maintenance t2390; NIA 0%
Electrical Maintenance 27;530. EE 23% 5025 60'
Civic Center Maintenance 3 854_ EE 23%
Central Library Maintenance ;+ NIA 0%
Parks Yard Maint 229Z¢i N!A 0%
....ill, ....;.
Branch Libraries Maint NIA 0%
Recreation Facilites Maint NIA 0%Fire Station Maint NIA 096 a -.. - - ''. :
:::::..::
:.::
Beach Facilities Maint NIA 0%
City Yard Maintenance 2N&M. EE 23% 48 6e4 48 894
Water Facilities Maint NIA 100%
Sewer Station Maint t26e.8B0: NIA 0%General Maint EE 23%
Street Maint ; '` �'.- EE 23% -
Bridge B Channel Maint NIA 0%
Concrete Maint EE 23%
... .::.:
Street Sweeping 322p6: NIA 0%
Sewer Line Maint 49520; NIA 0% - zz:
o:
Sewer Lift Stations 1Z16pQ; NIA 0%
Park Tree,Landscape Maint 1710 NIA 0% �l
Landscape Maint 18,090; EE 23% $T55 3755 ;,;c:
Tree Maint 29,390: EE 23% 8860 666
:.:.•,.
Pesticide Maint 9180: EE 23% 2143 2143
......,.
Park Maint _4167,34Z;: NIA 0%
Park Mechanics NIA 0%
Park Irrigation EE 23%
Weed Abatement EE 23%
Flood Control NIA 0% -
as a
Total Allocation 1035,256 _ 2j62T62 17,3i2 $180073 -
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
Page 2
r
City of Huntington Beach Step 5:Allocate Replacement Costs
Replacement Cost pnMary seeonaary
based on MSI study Total:.;:: Allocation Rate to :Alloeation to Allocation Total Total -
Flxetl Asset< Allocation Public Water Publie: Water to Allocation:. A1lod6ffdh>:
Replacemnt: Method Works Works. Water Amount tnWateF°X.
Cost 2%
Administration Total SA$90
Office of the City'Administrator 8870: SP 11% 11% 988 988 16 ' 1 002
:>.
Records Retention _.-.-_ SP 11% 11%
Public Information 45,720 NIA 0% 0%
Total Allocation 988 986 .. t8:r 1,002
a.
Administrative Services Total 460800:
:..
Administration 3;390.; EE 19% 6% 827 191 10 20] :.:.
::..
Accounting&Records 5,930 IDS 7% 14% A13 831, 7 - 838
Budget&Research 560: SP 11% 11% $2 82 1 63
Info Systems/Data Processing 347 860: IS 6% 15% ZD 604 St 405 345 51 750
Central Services-Purchasing 7,87Q SP 11% 11% 879 8TA 15 :i 889
Personnel 1.200: EE 19% 6%
Central Services-Printing 11;080' SP 11% 11% 1 329 -1 229 21 ,: 1 249
InfoSystems Micro Computers 70710; B$ 7% 14% 4,929- 9 905 9987
Real Estate Services 3 250: RE 0% 33% t,W .-..;1;066
30;643 86,t43 512-a ;:;;86,655 :.t4%
City Attorney 21870 SP 11% 11% 2,997 ?397 40 2,437 - 119ti
;:..:
City Council Total 7 300
.....
u;..
City Council 7 : SP 11% 11% 31t 811 - t4 BZ5
,:.
Intergovernmental Relations _- SP 11% 11% s .:...::.::::..:.:
:... 14
Community Development Van I X.
.....
Administration 3.390: NIA 33% 0% 1 69 .....
Planning Division 45;010: NIA 33% 0% t4:B59 248 24$ ii
Boise Chica NIA 0% 0%
:;::4:
Building&Safety 38;870: SP 11% 11% 4;31$ _-4 378 72- 4-391 :: ;. ;;.;;........
Planning Commission SP 11% 11% -
City Clerk Total T 640 :::;'
Public&Dept Support -7;6d0- SP 11% 11% ..84s t4.
Elections . r' NIA 0% 0% ;x;;
.:::..
•.
SuppoNRecordsMgmt SP 11% 11%
849 ;i 849 t4 i- 863- 31%
Non-Departmental Total 13 890 610
Telecommunications 230,000: as 7% 14% 1b,033..:..:,32 218 Z68 _ 3Z488_ : ;; .;?!;;...'
....
.. _ ::N
NonDepartmental (Streets&Civic Ctr only) 13 660 810: BS 7% 14% 952,299 1>913 572 _ 15 924 t 929 497
Micro Support BS 7% 14%
968;332 1:945,7904%
Internal Service Funds Total
Self Insurance - --
Liability jj-_-:, SP 11% 11% - - - - - '.'..
_
Retirement Supplement ': NIA 0% 0%
Medical Administration -i NIA 0% 0%
. ;:::..:....
Medical Claims Processing NIA 0% 0%
Workers Compensation NIA 0% 0% - ....:..
.. _ - ....
Retiree Medical NIA 0% 0% ":`" .............
"
......
Legal Services SP
•..:.
Equipment Replacement . CAP 0% 34%
dENVl01
..::
City Treasurer Total 1S860 .,..:.
::.
Central Cashier&Trees Mgmt t0l200 R 94% 9 57S 9 595: ::...:
Business License 060: NIA 0% 0%
is 9,575 ..9575
...................:
Street Maintenance
9864o: SP 11% 11% 10,949
783.: ....11032
Total Allocable Support Services 1 033 388 2 041 818 - 17 312.: 2,059.136
PRELIMINARY ®RAC
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
Pagel NO OPINION EXPRESSED OR IMPLIED
PEAKEY, ALDINGER & O'BYMACHOW
v
City of Huntington Beach Step 4: Indirect Allocation
Allocation of Costs primary secondary
Allocation Rate to Allocetionto Altoptton Tortai _ Tomi"�f
ToWj Allocation Public Water Public Water to; Allocation Allocadort';
.
Adjusted' Method Works Works YVa1er :Amount: :>E la.tlYater
....
Budget :> 129G
Public Works Total 15,fi85,8fi2'
Equipment Replacement
Capital Projects 416050. EE 23% 97,i06 97106
Administration 69 189: EE 23% 14 9t32 14 982
Engineering Administration A45.943 EE 23%
34 063 34 063
Subdivison Enginerring 782 609_ EE 23% 182 661 .. 182 661
Storm Drain Pollution Control 90,842 N/A 0%
Engineering Construction 12 950 EE 23Y 3,023. 3 023-
..
Engineering Design 14 850 EE 23%
3 466 3 466
Traffic Engineering 21100': N/A 0% ..
Traffic Maintenance 559.418. NIA 0% . .. .
Traffic Signal Maintenance 444 590: NIA 0%
Maintenance Administration 474 499: EE 23% i t0 T48 110 74$
Vandalism 10.000 EE 23% 3 334: 2 334.:i
Hazmat Control t01;500; N/A 0/
.
Fleet Management 57;1 201 EE 23 133,319 133 319
Equipment Maintenance 1,102,493 EE 23/° 25T,322 25I,322- :;
Vehicle Body Maintenance 179 47,6; EE 23/° 4189Q , ... . 41 890. .
Building Maintenance ;547.661:, EE 23% 127 824` 127 824
Central Warehouse 122 667; EE 23%
28:831` ... 28.831
Building Materials 98;000; NIA 0°�
Painting Maintenance 67,490 N/A OY
Electrical Maintenance 31027A EE 236 724T$ :<x24t8 .
Civic Center Maintenance 436,623. EE 23% 101,909. 101 906.
Centre)Library Maintenance X70;050 N/A 0°/
Parks Yard Maint :$000:: N/A 0%
Branch Libraries Maint 5 500 NIA OY
Recreation Facilites Maint .23 200 NIA 0/ .. s ., ,..:
Fire Station Maint :15,750 NIA 0%
Beach Facilities Maint 17000 NIA 0%
City Yard Maintenance 20,000 EE 23% ...4;668. ........,
:.:.:.
Water Facilities Maint 8 500. N/A 100/ 8 50¢ 8 500
Sewer Station Maint 6,500; NIA 0% 04
-.
General Maint 5200: EE 23/ 4:Z14, 1,244.
Street Maint EE 0/ -
Bridge 8 Channel Maint 41 750 NIA 0/o
Concrete Maint 37.1 441;: EE 23/°
sd�86 694
Street Sweeping 5:1I 303 N/A 0/ ee;z;z
Sewer Line Maint 08 094 NIA 0/
Sewer Lift Stations 320,427-: NIA 09 .. .. ..; :"r'
Park Tree.Landscape Maint a263.832: NIA 0% ;
Landscape Maint 601 7t1; EE 23°k :>: . 440
Tree Maint 1,'016 730 EE 23% 237 3Q5` ...: 237,305 :j
Pesticide Maint 363 686_ EE 23°/ $4 664 84 864
Park Maint t795,802: NIA 0%
Park Mechanics 286,946_ N/A 0k
«. - ....
Park Irrigation 328864 EE 23°� _.76,757
Weed Abatement 1 67 536: EE 23% .:
45 763. 15 763 ,. ........ .:
Flood Control 66.7 475: N/A 0%
1,667:920 1:,867,920 7
Total Allocation 3 998 669 5 910 810: .... 35Z:114. 6.267,925
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
°EASLEY, ALDINGER & O'BYMACHOW
Page 3
City of Huntington Beach Step 4: Indirect Allocation
Allocation of Costs primpry secondary
....
Allocation Rate to AlloeaH'onto Allocation, ,;.,Total - Total°.t ..;
Total': _ Allocation Public Water Publle Water to: Alloeatlan.,rAlloeatlon'
Adjusted Method Works Works Water ::Amount toWetef'.::
8utlget :> t2X` .. ..:.-...
Non-Departmental Total 12,969,88T
Telecommunications 1.t96. Bs 7% 14/ 50 2475
NonDepartmental 10 90Bs 7% 14% ? „8159;606280 1531240,96573 4
25 53217Micro Support B$ % 14% 018 :.2,979 5 ,[
<>904134 ;t;816;789 ::.AQT,667 :;-1,924,456 »i 1596
Internal Service Funds Total .10,362,053`
Liability 2 466 679 SP 11% 11 Y° - 2?4 075 274 OTS 32'638 306 7f3,
Employee Benefits Subtotal 7 771 0( NIA
Retirement Supplement 680,(M NIA 0% 0%
Medical Administration 154;0511 N/A 0% 0°/a
Medical Claims Processing 4 19T268 N/A 0% 0% ,
Workers Compensation 2,254;686 NIA 0% 0%
.
Retiree Medical 4t15;000;: NIA 0%
0%
Legal Services 69;6t1: SP 11% 11% 7735 T 735 921 8 656
Equipment Replacement 547M CAP 0% 34% .122 38,801`. ;'.15 ..:18,8t6
28f 932:. 300;61a 3 34,18 ........... %
City Treasurer Total 787,697
Central Cashier 8,Trees Mgmt 641.570: R 94 k 602 258 602 256
Business License ; t46:127 NIA 0°� 0%
602:258. 602;258
Street Maintenance 2,703 140 SP 11° 11 -„300 348 300 349 35,766 336 115
..:........,........
;[ 300,349 s>....300,349 35,:766 ..::.336.115.:< d12%
777777
Total Allocable Support Services ? ' Y998 869 4 042 898 357 114 4,400 005 -
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
PEASLEYs WINGER &O'BYMACHOW
Page 2
City of Huntington Beach Step 4: Indirect Allocation
Allocation of Costs Primary secondary
Allocation Rate to Allocation to Allocitlon
.: ...:. Total...:.
....
Total - Allocation_ Publie Water Publle Water: fo Allocation: AllocatJon:
Adjusted Method Works ..Works Water :'Amount to Watet''
Budget 12% .. ::
Administration.Total 909 604
Office of the City Administrator ;578 09,1 SP 11% 11% 75 344:j 75,344 8 972 i 84 318.
Records Retention 1 2?0: SP 11°5 11% 134 f34 16 t50
Public Information230,300_ N/A 0% 0% ....................
Total Allocation 75478;:. i5478 8968 64,466:> 9%
Administrative Services Total ,,575 386 -<
Administration 428821 EE 19% 6y 79 350 24 159
.....9 449 33 608.
Accounting fi,Records1,013,751.: B$ 7% 14/0 70 869 142 DC . .. .15041.9:
Budget 8 Research 11% 11/ 30939
Info Systems/Data Processing 990 099:: IS 6% 15/° 58 644 :, 146312. ... .6 984. 153,296.
Central Services-Purchasing 7B2 823 SP 11% 11 h 86 960.; ..,86 980 "1Q 358 97,338
Personnel 476673` EE 19% 6°� :88204: 26,855 10,504
Central Services-Printing SP 11% 11% 30 37 7 33 726 "
InfoSystems-Micro Computers 308,630: as 7% 14 21 Sf5 43 232 2 562 4794.
Real Estate Services 34 961 RE 0% 33% :44;537 44,537
459,209 s :562;927. :54089 =::617;016::- a3°6
.
City Attorney 27d fist'
SP 11% 11/ 4 ' .
_ 94;: .....4
City Council Total .240.712
City Council t8.2;293 SP 11% 11/ - i 20 255 20 255 2,412 22,667.
Intergovernmental Relations 58,419: SP 11% 11 6 .... 6:491 ::6,491 773 .:. 7;164:
::29:931;; ::1 .%
Community Development 3,320,756`
Administration 448 486: NIA 33% 0.6 148 000 17 624 17 624
Planning Division 1-364 510 N/A 33% 0%
+150 288 53 622 53 622
Bolsa Chica =1 NIA 0% 0% i
Building 8 Safety 1 461 360< SP 11% 11 k - aFj4 596 164 596 1$601 �84 196.
Planning Commission 2S 900: SP 11% 11% 2,878 : - ::3,87g 343 3,220 ;.:.. :...: ..'
765762 ::;..-:;167;473 :::91,189 :258.663.:>::::;;>;;iir i:8%
City Clerk Total 524:64 ' .....
Public 8 Dept Support 255 15f: SP 11% 11% 26 350: 28 350 3 3I6 31 t26. -
Elections A6 972 N/A 0% 0% -
Support/RecordsMgmt t82525._ SP 11% 11% ; 20,181 :20;28i a2,415 22,698'
?.48;631 :. .-_.-A8,63t :5791 54,422:: 10°5
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
Pagel °rASLEY, ALDINGER St O'BYMACHOW
Step 3: Determine Allocation Method
City of Huntington Beach
Cost Allocation Methods
Employees; .......... .......... ..
Allocation by Number of Employees »°!>:oftataks<?<Mo#'RZAW
PW WTR Method Public Works 248.5 24%
EE Water 58 6% 23%
19% 6% PW excluding Water 190.5 19%
Total City 1029.5
Budgei ed:Dollars; ;:. ..
Allocation by Percentage of Costs °!c'ef:tOtl-
PW WTR Method Public Works €<:T3,982;722: 7%
7% 14% B$ Water Xv.28 097 2:15< 14%
Total City 200 583;317:
EvenlySphf
Method Allocation evenly between 9 Public Services hT
fotaE>?>>
o..
PW WTR SP Public Works/Water 11%
(Includes Community Services, Fire, Police, Library, Public Works,
11% 11% Water, Redevelopment, Refuse and Other)
Specs/Sernces `
Allocation of Real Estate Services
PW WTR Method One third each to: Comm Service 33%
0 33% RE Water 33%
Econ Develpmt 33%
Centra/Cashier;:.:
Allocation based on Documents Processed annua ly i€-i>f.:.twr'
PW WTR Method Water 630,000 94%
,0 94% R A/R 14,400
Fire Med 26,723
Combined 671,123
Cap�fal
Allocation based on Capital Expenditures aotafi
PW WTR Method Water :<< 1312871650"<: 34%
CAP Public Works ....86 100. 0%
Total Capital Expenditures 38;699.;703
Computer:usage
Allocation based on Admin-IrifoS stems PuYt�c>NOCks >><<htlate >:
PW WTR Services include: Billing 0% 57%
Method Accounting 11% 11%
6% 15% IS Payroll . 19% 6%
Business License 0% 0%
Permits 0% 0%
Total 6% 15%
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
City of Huntington Beach
Cost Allocation Methods:
The following describes the methods of allocating the support services which should be
charged to the Water Utility.
• Number of Employees (EE)
This allocation method is calculated by dividing the number of Public Works (excluding
Water) employees by total City employees and the number of Water employees by
total City employees. It is used when the costs are associated with how many
employees are performing work for the water utility. Some examples of usage would
be personnel costs or employee benefit costs.
• Budgeted Dollars (B$)
For this allocation, the total budget of the Public Works department and the Water
Utility are divided by the total City budget. This provides an allocation that is useful for
dividing costs that are based on volume of department activity, such as Accounting.
Theoretically,a department spending more money is using a service such as
Accounting more than a department that has less cost activity.
0 Evenly Split (SP)
Some costs cannot easily be allocated by a ratio/variable method. These costs are
evenly split between nine different public benefit service areas. The theory behind this
I ethod is to assume that some costs will be expended regardless of any external
variables. For instance, the City council would probably cost the same whether there
were 2 departments or 20 in the City. So to allocate by the Even Split method is to
share these costs equitably among the services.
• Special Services (RE)
Currently, only Real Estate services are split this way, having 1/3 of the cost
attributable to the Water Utility. At the present time, the Real Estate Services performs
three functions: site acquisition for the Water Utility, site acquisition for Community
Services, and services for Economic Development.
• Central Cashier(R)
This allocation is based on the amount of documents processed by the Central
Cashiering department on an annual basis per the 96/97 budget. The majority are
related to the Water Utility. This allocation is used only for the City Treasurer-Central.
Cashier.
• Capital Expenditures (CAP)
Costs associated with funds spent on equipment and other capital are allocated on the
basis of capital expenditures for the Water Utility divided by total City capital
expenditures. This method is used for the allocation of labor costs in the Equipment
Replacement program.
• Computer Usage (IS)
The computer usage method is used for the allocation of Information Systems based
on an analysis of the functions the department performs: billing, payroll, accounting,
permits and business licenses. The assumption is made that each of those five areas
place equal burden on the computer system. Each of those five areas were in turn
allocated using appropriate methods described above.
A portion of the Support Services costs are allocated to Public Works and to the Water Utility.
The items allocated to Public Works are then further allocated as overhead for the benefit
various Public Works departments provide to the Water Utility. This secondary allocation of
Support Services is done using the total ratio of Public Works overhead charged to the Water
utility. PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & OBYMACHOW
City of Huntington Beach Step 2: Categorize 8 Allocate Capital
Summary Cost Reconciliation
General Fund Other Funds
777: ire ;;>: _.
Other
':<Support:;:; Community Library Public Econ. Capital Refuse Entsrpriss Other
Se vices':: Services Fire Dept Services Police Dept Works Water Dwdopmsrt Projects Fund Funds Funds Transfers Total
Direct Services 6.757.834 16.309.911 2,909,522 32.757.310 15.269.812 34.325.535 11,158,040 10.753.004 8.746,857 5.191.973 18.249.040 162.428.838
Support Services _
Administration 909,604 909,604
Administrative Services 4.263.382 4.263.382
City Attorney 1.274.654 1.274.654
City Council 240.712 240.712
Community Development 3,284.756 3.284.756
City Clerk 524.648 524,648
Non-Departmental 12,776,981 12.776,981
City Treasurer 787.697 787.697
Internal Service Funds 14.092.045 14,092.045
Street Maintenance 2,703,140 (1,703,140) (,,000,000)
Total Cost of Services per Budget 40,857,619 6,757,834 16,309,911 2.909 522 32,757,310 13.566.672 34.325.535 11,158,040 10.753.004 8,746.857 5191 973 17 249 040 200,583,317
Equipment Replacement (3,729,992) (3.729.992)
Capital.Project Fund (2,510,300) (2,510,300)
Allocation of Capital 4.040.904 183.000 747,900 290,000 562.438 416.050 6.240.292
Total Cost after Capital Allocation 41,168,531 6 940 834 17.057.811 3199 522 33.319.748 13,982,722 34.325.535 11,158.040 8.242.704 8.746.857 5.19 973 17.249.040 200,563,317
Elimination of Interfund Transfers (3,500,000) (81.000) (282,000) (19.155) (6,228,320) (5,075,243) (325.000) 9W.800) (175.938) (2,219,155) 18.156.611
0 os o ervrces without Transfers 37.668.531 6.859.834 17.057.811 2.917.522 33.300.593 13.982.722 28,097.215 6.082.797 7.917.704 8.496.057 5.016.035 15.029.885 18.156.611 200.583,317
Breakdown of Transfers
.......
d;E;:;2ransfe ao::....... E:>Arnount';
om
Community Services All Fund 81,000
Library Services Transfer to Other Funds 282.000
NonDepartmental Self Insurance 3,500.000
Police Other 19.155
Capital Proj-Library General Fund 100.000
PRELIMINARY DRAFT CapitalProj-Library Charges
stoDeExpansion 50,000
25.WO
Capital Proj-Sewer Charges to Departments 125,000
Capital Proj-Drainage Charges to Departments 50.000
Water Fund Charges to Departments 2,705,000
FOR DISCUSSION AND REVIEW Water Fund In Lieu Tax 2,853.600
SUBJECT TO CHANGE Water Master Plan In Lieu Tax 669.720
Refuse Fund Charges to Departments 250.800
NO OPINION EXPRESSED OR IMPLIED Enterprise Fund-FEmeraldCov Transfer toGeer FundsalFun 150.938
Enterprise-Emerald Cove Transfer to General Fund 25,000
PEASLEY, ALDINGER & O'BYMACHOW Redevelopment Debt Service4,840.243
35.000
Redevelop Inc Housing Transfer to Other Funds 00.000
Redevelopment City Attorney 200,000
Gas Tax Fund Transfer to General Fund 2,200,000
Other Bureau of Justice Grant 19,155
Total 1 11
City of Huntington Beach Step 1: Summarize Budget
Budgeted Expenditures
Department Request 96/97
. :Total_ Capital Totat:
Total Direct Costs Interfund Capital per trsf from with Cap>_-; Indirect
Budye!- Trsis Dept Budget,_ other fund Trsf Costs
Other Funds Total 3 637,021 2,518,903 19,155 1,110,118 3656176 3 6561T6 (19,155)
Air Quality Fund 94,035. 94,035 94035: 94;035': 0
Narcotic Forfeiture Fund 4201;74 420.174 g20,1T4' 420.174:; 4
COPS MORE grant 231,872 231,972 231 972; 231;972 4
Jail Donations Fund 15000:. 15,000 15000; j5000:
Police Community Relations 25000 25.000 :25,000 25,000;:
Bureau of Justice grant(BJA) 172,395 172,395 19,155 181;550; t91,550. (19.155)
Suppl Law Enforcemt Grant E 435,805 435,605 -"e35 805 435 805
Specialized Training 20000 20.000 _>20000
Fourth of July Parade t78 850 178.850 176 850. 178,850
Library Grants 70;690; 70,890 .70.890; :70;690 1
Comm Devel Block Grant 1 975 300: 857.182 1.118.118 - 1,975300 1;975 300:: 2
Total 182426.7W: 143,727,003 18,158,811 38.699.703 200,583317; 200583317._ (18,158,811)
Total from Page v of Proposed Budget_. 200;583 317Xv
PRELIM I NARY.DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
Pages NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & OTYMACHOW
City of Huntington Beach Step 1: Summarize Budget
Budgeted Expenditures
Department Request 96/97
`Totak Capital Total
Total Direct Costs Interfund Capital pet trsf from with Cap_, Indirect
Budget` Trsfs Dept_Sudget? other fund Trgf.. - Costs
Debt Service Total 5943 000 5,943,000
S 943 000 5,943 000
civic Improvement Fund 2,849,000: 2,849,000 2,848;000:: 2,845),000,: .
HBPFA 2,682,000. 2.682,000 2;882,00q: 2,882,000:
Reservoir Hill 164,000 164.000 164 000: 184 000:
Mello Roos 248 000 248,000 248 000 248 000:
Water Fund Total 28 697 21 S 14,809,565 6,228,320 13,287.650 34 325$35: 34 323 533 (6,229,3201
Water Administration ;2630;258, 2,489,2S8 5,558,6W 141.000 8;188;858 . 8,188;858:. (5,558,600)
Water Planning 7257,648 622,848 8.635,200 7,257848:: 7;257848'
Water Production --_9,210,289- 8.979.939 239.350 --_ $,219284�'. 9,219289_�
Water Maintenance 1429,438' 1.214.438 215.000 1;429438:: 1429438:;
Water Meters 938,103 783,803 154.300 :938103; 938;103'
Water Quality 326,029 328,029 326 C29 328,029
Safety Program 8550. 8,550
Deferred Maintenance 145j350.: 145,3S0 34S 350> ;.145,350
Deferred Meter Maint 622 714. 34,914 587,800 622 Tt4: 622 714.
Master Plan Improvement 5 315 000:: 669.720 5.315,000 5,964 720: 5,984 720 (689,720)
Engineering costs for cap imp 208 836 208.636 208 836: 208 838::
Refuse Fund _z6 496 057 8.496.057 250.800 - -6 T46.857 B 748 BST--. (250,800)
Other Enterprise Funds Total S 616 035 4,793,605 175,938 222,430 3 9.1,973 S 191 973 (175,938)
Public Comm Fund 402:8T2; 375,242 27,430 402872.: ;402;872:: 3
Fire Mad Fund 2956,052 2.761.052 150,938 195.000 31.06gg0: 31p6990: (150,938) 14
Art Center 366;273' 366,273 368279:: 386 Z73: 4
Emerald Cove Housing 819 488 819.488 25.000 844488:: 644 488 (25,000)
Library Svs Fund < 471 550. 471,550 471550:: 4jJ 550
Internal Service Funds Total -M362 053� 10,362,053 3.729.992 _-14 092 043f3.729.992110 362.OS3-
Liability 2 488 679: 2.466.679 Z;466 679 2466678::
Employee Benefits Subtotal 7,771.00 7.771,005 7 T71 003` 7771 005,
Retirement Supplement 680,000 680.000 660,000 B80;000::
Medical Administration f54051: 154.051 154051; 15405t
Medical Claims Processing 4 197 268 4.197.268 4'.1972gg_ 4 197.268'.:
Workers Compensation 2 254 88B.: 2.254.686 2 Z54 868:_ 2;254 663.
Retiree Medical 485,000 485,000 '485000:: 485,000
Legal Services 69 81 L 69,611 69 611. 69 611:
Equipment Replacement 54 758 54,758 3.729.992 3.) 750: (3,729,992) S4 758;
Redevelopment Fund Total 6.062.797 1 252 797 5,075,243 4,830,000 1 f 138 040` 1 t 1 SB 040 (5,075,2431
Administration 463 483: 483,483 463:463 483,483
Business Development :: 346 702 346.702 348702: 348 Z02::
Main/Pier Project Area :2 324,393. 144,393 2.180.000 _2,324.393 :2;324.393:: _
Yorktown Lake Project Area 1?734: 12,734 f1Z?$4 12734
Talbert/Beach Project Area 9 308 9,308 9308 9 30fi:
Oakview Project Area 13 616; 13,816 43 8t8 43 818
Huntington Center Project Area 182 300 182,300 182 300:: 18231b
Debt Repayments 4,840,243 4;84D�43 4;840243`; (4,840,243)
Low Income Housing ..2 730 063 80.063 35.000 2,650,000 2;785 063: 2 785 003; (35.000)
City Aty legal Costs 200.000 200 000 ZOQ 000:: (200,000)
Transportation/Street Projects .....6.449 864 893,054 2,200,000 5,556.810 8 649 864 8 649 864> (2,200,0001
Traffic Impact 33289.0: 183.390 149,500 332;890:: 332890 2
Gas Tax Fund :1426397: 386.397 2,200,000 1,040,000 .3626397 :3;626397 (2,200,000) 5
Measure M Fund ':2,485,580: 267.380 2,198,200 `2 485 580: 2:485 580:: 4
Caltrans TSM Fund 30,68T 30,687 j30,887 30 887. 0
GMA Area#6 1 688110:. 5,000 1.681,110 i;888110 1 8881:10
HES Grant 288000 288.000 288000 288000:
OCTA SIP grant 200 000 200.000 200 000;: 200 000::
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
Page 4. NO OPINION EXPRESSED OR IMPLIED
Pr-A�L EY, ALDINGER & O'BYMACHOIn/
City of Huntington Beach Step 1: Summarize Budget
Budgeted Expenditures
Department Request 96/97
Iota!. Capital Totat:;
Total Direct Costs Interfund Capital per__ Vst from :.with cap::*: Indirect
Budget Trefs Dept Budget: other fund ` Trcf_:.,?;;- Costs
Public Works Total 15 683 862 15,183,712 86,100 1 S.269 812 416 050 15 685 862
Capital Projects Cap Proj
Equipment Replacement 418,050 416.050 4160$0 EgRepl
Administration 84,189. 84,189 84189: 6s189:_
Engineering Administration 145,943. 145,943 145941: 1d$;943:
Subdivison Enginerring 762,609 782.609 7b2 809:, 782:609'..
Storm Drain Pollution Control '90,842. 90,842 90;842'. 90;847:
Engineering Construction 12,950 12,950 32950 42950-
Engineering Design 14,8W 14,1150 t4850 14 850
Traffic Engineering 21100 21,100 21 t00:. 21100i:
Traffic Maintenance ` 559;418 559,418 - --:659418` �559418:`:
Traffic Signal Maintenance 444590: 444.590 444,5W:
Maintenance Administration 474499 474.499 474499: 474;496.
0
Vandalism 10,000 10,000 :<.10.000' .10,000:;
Hazmat Control 101;500 101,500 1II1500 7Q.1;500:
Fleet Management 571 201: 571,201 571,201 671;204
Equipment Maintenance : 1 102,491 1.102.493 1`:1.02 493 1 102 4f)3:
Vehicle Body Maintenance 179 478; 179.476 179 478: 179;478
Building Maintenance 547681; 547,861 54j861` 54Tt881
Central Warehouse 122 667; 122.667 122687; 122887>
Building Materials 48;000: 48,000 48,000 48,000
Painting Maintenance 67;490.: 67.490 i67,490 8Z 49g;
Electrical Maintenance 3/0274 301,074 9.200 $111274: 310r274:
Civic Center Maintenance 436,823 436,623 438;823 438,923;
Central Library Maintenance 70050 70,050 70050i 70,050
Parks Yard Maint 5,000_ 5,000 5 000: 5.000:
Branch Libraries Maint 5,500. 5.500 5 500 S SOOii
Recreation Facilitea Maint 23 200, 23.200 23 200: 23;200::
Fire Station Maint 15 750. 15.750 t5 750; t5;750
Beach Facilities Maint 17,000 17.000 rtT(KJO; t7 000?:
City Yard Maintenance 20,000 20,000 ZO 0p0 20,000!:
Water Facilities Maint 8 500. 8.500 8 500 B;500;:
Sewer Station Maint 6,500 6,500 6 500: 8;500
General Maint 52W 5.200 5200: 5,200:
Street Maint h 703 140; 1,703,140 1 t.703.140 ]703140
Bridge 8 Channel Maint 4t 750: 41.750 ::41 750:' 4.1;750
Concrete Maint 371 441 371.441 37144k: 375;441.,
Street Sweeping 517 W3 517.303 51T 303 StT,309:
Sewer Line Maint 688094.. 688.094 888 094: 888,0.94:
Sewer Lift Stations 320,4275 320.427 320 427: 320 427
Park Tree,Landscape Maint 263 632 263.832 283,832 263;832
Landscape Maint 801711:; 601,711 8017Uj 8II17j1::
Tree'Maint 1,016,730' 1,008,730 8.000 t'Ot8j30: t;pt$730
Pesticide Maint 363,688 383.888383;888-. ...
Park Maint 1 745 602. 1,745,802 1 345802: 1 T4580z<
.
Park Mechanics 286946' 288,948 286948:" 286948;
Park Irrigation 328,88.4. 328,864 32$864: 328 884,
Weed Abatement 67636 67,538 BT536 87538 '
Flood Control 667 475. 598.575 68.900 f367 475 867;475:
City Treasurer Total i` 787 697 787,697 - .787687:' -:78T 69TS
Central Cashier 8 Tress Mgmt 841;570: 641.570 F}4]57p-: 84.1570; .
Business License : 146 127 148.127 1.4812T� 148.137>
Total General Fund 100 424 960 93,842,323 3,882,155 342.345 98066 823 6.240.292 104 307,113 (3,682,155)
d.
Capital Projects Total 7 917 704 815,646 323 000 9612358 ....--10 733 004 2,5t 0 300 .-.-:8242 704' (325,0001 Staff
Library/Cultural Facilities 150,000 150000:- 150000> (150,000)
58 821 Bike Trails 579 434: 7,650 571.784 5T9 434' SZ9 434: 0
Sewer Fund 616 041.: 198,041 125,000 418,000 74-I041i: 741 041: (125.000) 2
Drainage Fund 875,523. 165,523 50.000 710.000 9255?3 825h523i (50.000) 2
Pier Rebuilding Fund 90,000' 90.000 90 000:: 80,000;
Pier Plaza 71,583: 71.583 72.7 883:
Holly Seadiff 3,284.000. 3.284.000 3 284 000: 3;284 OAF
Blufftop Park 50;424 50,424 �50 424 - ;50;b24:: 1
FEMA grant 1338,699- 142,425 1,196,274 f336699 T$38899:: 2
Other Department Projects 2,510,300 2 St0300, (2.510,300)
ParkAcgBDevelopment 1012,006 90.000 922,000 Y;012000; 1052000"
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
Page3 NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
City of Huntington Beach Step 1: Summarize Budget
Budgeted Expenditures
Department Request 96197
-*:::Tct3Ii capital Tctat
Totat Direct Costs Interfund Capital pet trsf from with Cap Indirect
Budget, Trsfs Dept Budget' other fund Trif. Costs
Fire Department : 17 057 911` 16,283,506 26 405 ,16 309 91:1 747.900 17 057 811
Administration 99t,008: 533.408 833;408 457.600 991,.008: Eq Repl
Fire Prevention .A1 242,067- 951,767 951 787:: 290.300 1,242.087_ Cap Proj
Fire Suppression i10,592,691: 10,566,486 26,405 10;592891;:. t0,592891:
Support Services 329,1oe 329.108 329106; 329'106.
Paramedics »:1 732 887: 1.732.867 1,732,867: 1732867
Emergency Services 208.10 208,153 `- ;208:1s3 :i208,153::
Hazmat Response
948171 948,171 `-948171;: --94817}
HazmatControl 414,69Z> 414,697 -- 414897:: �414897.
Search&Rescue 7;550' 7.550 7,550; 7,550'
Emergency Ambulance 591 301;. 591,301
Library Services Total 2 917 527 2,627,522 282 000 2 909 522 290.000 3199 522 1292.0001
Library Administration 410.098 370.096 282.000 6$2,096: 40,000 692096. (282,000) Eq Repl
Sister Cities 10;720 10.720 10;T2a: {0 720;
Reception-Information 419,262: 419.262 at8 262 410 282.
Library Reference 426,257: 426,257 426 257: 428;257
Library Childrens 240 644: 240.644 .24...... _-240 844
Library Circulation
t94,419: 194.419 194,418_ 164419:
Media Services 120,157; 120,157 120j57, 120157:
Library Acquisitions 215086; 215,088 2t5088; 215,088
Library Facilities :. 319749- 69.749 _->89749; 250,000 _319,749:: Cap Proj
Main Street Branch 58,040 58,040 56 040 38 040:
Banning Branch 54 413.: 54,413i54 q.13i:
Graham Branch 54,300 64,300 54 `4 3f70 ...900:
Technical Services 343427 343,427 343427:: 343427:
Adult Literacy 52,950 52,950 :52950; $ 950: -
Non-Departmental Total :12 969 88i: 9105749 3 500 00o 171.235 - 1 YT7g-981'` 3.692.900
16 489.981' (3,500,0001
Telecommunications 2291195 486.195 75,000 56t795;; 1,730,000 2;291,195; EgRepl
NonDepartmental 10319,1= 8.465,800 3.500.000 84,000 12049800: t,770.000 13,818800: (3,5W.000) Cap proj
Micro Support 358 886. 153.751 12,235 165988: 192,900 35888.E Eq Repl
Police Department Total 33 300 5931 32.723.655 19.155 14.500 3 757 310 562 438 33 319 748 19 15S
Executive 783 236: 220,798 220 798 562,438 783;236 Eq Repl
General Services 294716; 294,718 294?16 294716i
Administrative Support 80 635 899,635 88983$; 899,835
Community Liaison 359,270: 359,270 359 270`' 359 270:
Records <1598,825: 1.596,625 i;598825' 1598825`.
Training 394087 394.087 39dp87:: 394087
Budget 8 Research 389 118 389,119 19,155 408,Z7q: 408,274 (19,155) Tsf to BJA
Aero 1,324160 1,324,160 1 324150r t 324-1b�0
Vice 8Intelligence 820295:- 820,295820295:: -
Investigation 3 242 918 3,242,918 3,242 918:_ 3;242 918
Narcotics 1,160,102_ 1,160.102 --J;160102:: '1;180102;
Scientific Investigation 7 3280i8; 1,323,018 3.000 13260t8 t,328,018:
Patrol 11 825 706 11.825.708 11;625 70a 11,825 ZIX:
Communications 1.6 427 1,668,427 f 688 4273 1'668 427
Jail
1 427 192 1.427.192 1 427 192 1 427;$92;
Traffic _ 2822,187: 2,810.687 11,500 2822187 2,622187
Gang Enforcement 160,622 180.822 :180,822_: 180,822:
Crossing Guards 238,092' 236,092 - 236 092 236 Q82
Parting Enforcement 515.102 515,182 St5182: 516162
Systems Group 878 349 876,349 876 349: 87B 349:;
Special Events Overtime 322.530' 322,530 322530: 322530
Fleet Management 669,963 869.963 889989: 868,983:
Property Evidence 140 308 140,308 j4p,3p8 140 3.06:
SWAT ti 614: 23,674 23 874; 23;874:
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
Paget NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
City of Huntington Beach Step 1: Summarize Budget
Budgeted Expenditures
Department Request 96197
>Totat- ::; Capital Total
Direct Costs Intertund Capital per trsf from with Cap.: Indirect
Budget Trsfs Dept Budget.' other fund trsf Costs
Administration Total ` 909 604 907,204 2.400 .909 604 909 604`
Office of the City Administrator 678,094, 678,094 878;094 :_676,094::
Records Retention t 210; 1,210 1Q10: 1 210
Public Information 230 300 227.900 2,400 230 300:. 230 300
Administrative Services Total --:i 4 575 3ij6 4,229,177 34,205 312,004 4.573 366- _
Administration 428;821- 316.817 31@,817 112,004 428;821:; Eq.Repl
Accounting S Records 1 0111M. 813.751 813 751:: 200.Otx) 1;013 751: Cap proj
Budget 8 Research 168 397 168.397 2.000 166 387 468 397
Info Systems/Data Processing 9o009B 985.789 4.310 690099i 980099::
Central Services-Purchasing 762823 782,823 782,823 762823
Personnel 476,673: 476.673 478 873: 478 873
Central Services-Printing 2T7 231: 268,731 2.500 -_-:271 23t_: 271 23}:
InfcSystems•Micro Computers 308,830' 283,235 25,395 -;308 630 308 830::
Real Estate Services 134 981 i 134.961 ::.1. ..... :�134,9.BT
City Attorney 1 274 654. 1.274,654 1,2T4 654; 1 274 654
City Council Total 240 712 240 712 240.7112 ......240.7112
City Council 182 293: 182.293 1 SZ293; 182 293:
Intergovernmental Relations 58 419 58,419 58 419:
Community Development 3 320 756 3,284,756 3,28056 756 36.000 3 320 756`
Administration 448,486:. 412,488 412;486.: 36,000 448 486': Eq Repl
Planning Division 1 364 51Z 1.364.510 1 3845i0:: 1,364 5117;:
Bclsa Chita 500- Soo
Building 8 Safety 1,481 X0 1,481,360 1 48138q 1 481 960
Planning Commission 25 90q: 25.900 :i25 900: 25 900<
City Clerk Total 524 648 524,648 .524648` -..524648•
Public 8 Dept Support 255,151. 255.157 25S 15t 285,151;l;
Elections 86972 86,972 869z2 89972>
Support/Records Mgmt 182$25 182,525 82,525 182;525.
Community Services i.
Total 6,859 934 6 669 334 81 000 7 S00 8 7S7 834` 183.000 6 940 834` (81.000)
'Administration 829,948 446,848 444-948, 183,000 829 94@: Eq Repl
Beach Division Supervision 61 T23:. 61,723 81 723: 61 723:
Marine Safety 1 5T7286' 1,571.286 4,57t 288 1,57;1 286:
Beach Maintenance 698 983: 698.963 aIg6 983 `686 963:
Parking Facility 670357 662,857 7.500 670357; B70357:
Pier 8 044. 8.044 8 044:
Parking Meters 138 619: 136.619 138 819:
Mechanical Maintenance 233231 233,231 233231 233231F
Junior lifeguard 249,536: 249.538 249 536 249.5.3H
Park Surveillance/Natrue Cent/ 84 Ttt. 64.711
Rec.,Human Svc,Pk Dev Sup 329 024 329,024 ;329 024: 329,024
Community Centers 338 395: 338.395 336 395 338,3@5:
City Gym S Pool 175 437 175.437 175 431 175 437:_
Tennis 97 096 97.090 97090:' z.97 090:
Adult Sports 237 191: 237.191 23719}` 23719t
Youth Sports a8,132E 46.132 48132 48132'
Adventure Playground 18 885: 18,685 48 68§;: 18 885;
Instructional Classes 426 972: 426.972 428 9Z2 428....
Aquatics 122 761 122,761 -22 781 j 221f3t
Special Events 24;780 24,780 24 780 24 780>
Day Camps 36 278` 38,276 38 278 36 276:
Seniors'Center 178 719: 178.719 178 719: 178 719:
OakviawCenter 60,476, 80,478 -L80478 -i80-4
Clubhouses 29,722:. 29.722 29 722 29 722
Seniors'Outreach 226 376 226,376 n6 JIM .:226378::
Division Admin Cultural Affrs 144 133 144.133 144133 144 133
Community Band 3 245: 3.245 3 245:: 3 245
Cultural Services•Trsf to Art Fund 81,000 81 000: 81000, (81,000)
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
Pagel NO OPINION EXPRESSED .OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
fund to the the department where these Capital Expenditures are being implemented. The third
section of the schedule shows the elimination of the transfers out of the various departments. A
separate breakdown of the specific transfers is provided. Note that only transfers OUT are
included in the summary of expenditures. Transfers IN would be included with Revenue,which
is not considered in the scope of this schedule.
Step 3: Determine Allocation Method
There are several methods possible for allocating costs from the Support Service departments to
Public Works and Water. While one method may be appropriate in some cases, such as
allocating Personnel costs (by number of employees) another would better suit the City
Treasurer(by revenues received). The third step is to calculate allocation percentages using the
appropriate methods that most accurately reflect how various costs may be applied.
Percentages are calculated for allocation to Public Works and Water separately. There is also a
calculation for the allocation of administrative costs from Public Works to the Water Utility. This
allocation is to account for the various costs such as administration and vehicle maintenance
that properly should be partially allocated to the Water section of Public Works.
Step 4: Indirect Allocation
This next schedule applies the various allocation methods to the Support Service expenditures.
Each Support Service cost is evaluated for the most appropriate method of allocation derived in
Step 3. Then the allocation is calculated for both Public Works and Water. The secondary
allocation of Public Works is then applied so that a Total Allocation of Costs to the Water Utility
is derived.
Step 5: Allocation of Replacement Costs
In 1991, the Management Services Institute (MSI) provided to the City a breakdown of annual
funding requirements for asset replacement. The proactive idea of reserving funds on an annual
basis rather than needing to fund asset replacement at time of purchase has the beneficial effect
of smoothing cash flow difficulties. To comply with this normalizing of the asset costs,the
Annual Fixed Asset Expenditures provided by MSI have also been allocated to the Public Works
and Water Utility in a manner similar to Step 4. An illustrative example of what is being
accomplished with this allocation would be the funding of a new computer system. The capital
costs are picked up by the Administrative Services department, but the computer is used for all
city functions including the Water Utility. Consequently, a portion of the replacement cost is
passed along to the Water Utility.
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
SUBJECT TO CHANGE
NO OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
PRELIMINARY DRAFT
FOR DISCUSSION AND REVIEW
City of Huntington Beach SUBJECT TO CHANGE
Determining the Allocation of Costs to the Water Utilitp OPINION EXPRESSED OR IMPLIED
PEASLEY, ALDINGER & O'BYMACHOW
Summary
The City's various service areas can be classified into two different types of functions:
1. Public Services: those that serve the public directly, such as the Fire Department or
Library, and
2. Support Services: those that support the public service areas and provide general
municipal benefit, such as the City Clerk or Administrative Services.
Due to the fact that the functions included in the second category support those in the first
category,the costs associated with these support services should be passed on or allocated to
the appropriate public service departments.
We found that a five step process provides an allocation which fairly estimates the amount of
costs budgeted by the Support Service departments that should be charged specifically to the
Public Works department and to the Water Utility section of Public Works. Briefly,the five
steps are as follows:
1. Summarize the budgeted costs for all departments
2. Categorize and allocate capital projects budgeted
3. Calculate the various methods of allocation
4. Determine the indirect allocation of expenses
5. Determine the indirect allocation of capital replacement costs
Detail of Allocation Process
Step 1: Summarize Bud-get
The first step is to summarize the total costs included in the Department.Request 96/97 Budget.
This is done in a schedule that for every City department segregates the direct expense costs,
the transfers to other funds,the direct capital costs, and the capital costs from other funds. All of
these except the capital costs from other funds are easily determined by reference to the City
Budget individual department Program Cost Detail sheets. The capital costs from other funds is
derived from the Program Cost Detail sheets for the Equipment Replacement Fund and the
Capital Projects Fund. These two areas contain capital costs that are more appropriately
included in the Departments where the costs are incurred.
Step 2: Categorize and Allocate Capital
This schedule displays a summary of the information of Step 1 in a format which shows the two
categories of functional departments. The departments that comprise the Support Services
category are Administration, Administrative Services, City Attorney, City Council, Community
Development, City Clerk, Non-Departmental, City Treasurer, and Internal Service Funds. Of
these departments, all expenses are in the General Fund with the exception of the Internal
Service Funds. A summary of the expenditures for these Support Services are shown in the first
column of the spreadsheet. All other departments and fund expenditures are summarized in
columns across the schedule.
This summary information is first shown categorized as it appears per the City Budget. The total
of the expenditure line designated "Total Cost of Services per Budget" equals that shown by the
1996/97 City Budget. The next section of the schedule displays the capital costs discussed
under Step 1, showing the reclassification of the Equipment Replacement and Capital Project
Memorandum
Mr. Les M. Jones, II & Mr. Robert J. Franz
July 14, 1997
Page 2
The,water fund, of which the direct beneficiaries are the water.customers, is itself the beneficiary of services
provided'by the various functions performed by the general fund, (such as City Clerk, City Attorney, City
Treasurer, etc.). Because the present accounting and budget methods used by the City do not completely
and fully allocate all costs to the end user, it is necessary to do this in order to determine the revenue
requirements of the water utility.
The Step 2 spread sheet has identified, in the support services column, the total cost of services for whom
the primary beneficiary is another City department. For example, the City Treasurer collects and processes
all water billings paid to the City. However each of the support services categories does not benefit each of
the City functions the same. For that reason it is necessary to determine appropriate methodology to allocate
the support service costs to the areas of public service.
Step 3 calculates seven methods which have been identified and utilized to allocate the support service costs.
At this point it is important to remember the purpose for this exercise is to determine a method of allocation
for the support service costs based on projected 1996-97 operations,which should be expected to vary from
year to year as priorities and needs change. The presumption here is that the variation will not be significant
enough to yield inappropriate results. For this reason, each method is general in nature and not intended to
be extremely detailed. The narrative accompanying Step 3 provides additional information as to how each
of the allocation methods was developed.
The forth step in our process was to apply the methods of allocation to the support service categories. Step
4 is a spread sheet which allocates in detail, by program and function, the cost of each support service
category. Also included in Step 4 is a column identified as"secondary allocation". This secondary allocation
represents an allocation of the general government overhead (support services)which would be otherwise
applied to the Public Works Department, and because the Public Works Department oversees and supports
.the water division, to the extent the"unburdened" Public Works Department costs are allocated to water then
so should the support service overhead. This methodology is almost identical to the general government
overhead and department overhead as discussed in the MSI study of 1991.
Also discussed in the MSI study is the concept of capital replacement. Step 5 demonstrates, using the same
support service categories used in Step 4, the amount which would need to be funded annually to be able to
replace capital items when necessary. We have not yet determined how the capital replacement cost
calculation will be included in the water rate study and will give this area further consideration throughout the
study process.
To summarize, the process as described above has resulted in a conclusion that.for the 1996-97 budget year,
$6,267,925 of costs budgeted in the general fund and other funds would be allocated to the water division.
(Exclusive of capital replacement costs.)
In preparing the water rate study we will be using the 1997-98 budget and applying the process described
above, (specifically utilizing the percentages determined for allocation based on the 1996-97 year),to allocate
support services overhead to the water division. The resulting amounts to be allocated to the water division
will of course be determined by the final budget for the 1997-98 year. However I do not expect the results to
be significantly different from 1996-97.
PEASLEY, ALDINGER 8C O'BYMACHOW
AN ACCOUNTANCY CORPORATION
2120 MAIN STREET,SUITE 265
GERALD W.PEASLEY.CPA(RETIRED) HUNTINGTON BEACH,CALIFORNIA 92648 (714)536-4418
MATT A.PEASLEY.CPA FAX(714)536-2039
CHRISTIAN L.ALDINGER,CPA
MARA ROSSI O'BYMACHOW,CPA
MEMORANDUM
DATE: July 14, 1997
TO: . Les M. Jones, II Robert J. Franz
Director of Public Works Deputy City Administrator/
City of Huntington Beach Administrative Services
City of Huntington Beach
FROM: Christian L. Aldinger, CPA
PEASLEY, ALDINGER & O'BYMACHOW RE: Method of allocating City overhead to
AN ACCOUNTANCY CORPORATION water fund
This memo with attachments is intended to demonstrate the method which we intend to use to allocate city-
wide overhead costs to the water fund for purposes of completing our study of the water division rates.
Traditionally, accounting methods used by many cities for both financial statements and budget preparation
have focused on matching expenditures with revenues; specifically matching expenditures to the revenues
received or projected by fund. We have called this a "revenue-based" budget. In preparing the revenue
requirement study for the water fund, revenue requirements for the water fund must be determined . Revenue
requirements are simply defined as what it costs to provide the water service for a particular year. To perform
the revenue requirement study we need to convert the "revenue-based" budget to what we have called a
"cost-based"budget,where each budget category includes the complete and total cost by program regardless
of revenues.
Historically,the City of Huntington Beach's accounting and budgeting system has not budgeted all of the costs
of operating the water utility within the water fund itself, a portion of the costs have been budgeted to the
particular fund where the dollars are expended from. An example of this is that a portion of the Public Works
Department staffs cost (who from time-to-time may expend a significant effort on water related issues) is
budgeted within the Public Works Department and not the water fund. If as in this example, the Public Works
staff time was not allocated to the water fund, then the true cost of providing water service would not be
reflected in the water fund.
Our analysis of the City's budget has also identified numerous other areas where amounts are expended
which benefit the water utility but are included in the budget in areas other than the water fund. Accompanying
this memo is a five step process of which Step 1 is in essence a summary of the 1996-97 City budget. Step
2 involves using a spread sheet to re-categorize and/or allocate certain costs which are actually for the benefit
of a particular fund, but are expended (paid out)out of a different fund. For example,the Capital Project Fund
Budget includes various projects which directly benefit another fund or function of the City. Step 2
redistributes those type of costs to where they provide benefit rather than where they are paid from. Step 2
also illustrates in broad categories the functions performed by the City and also who the direct beneficiary of
the service or function is. For example, the direct beneficiary of services provided by the Fire Department is
the general public. However, except, to a very limited or indirect extent the general public is not a direct
beneficiary of the services of the city attorney, rather other city departments are the direct beneficiaries.
ne• 3
ATTACHMENT #3
PE
CITY OF HUNTINGTON BEACH
CAPITAL IMPROVEMENTS
Department : unctionAccounting Div.
Public Works Water Division EX Fund Water Plan
Department . Administrator
Request Recommended
Project Description FY 96/97 FY 96/97 Project Description
Carry-over Projects
a
933 System Improvements 185,000 185,000 Includes system cathodic protection,Icak
detection research&security systems
935 Beach Blvd Crossings& 300,000 300,000 Includes 3 crossings at Beach Blvd&
Dov,^:to ir..Pipelines 1100 LF of 12:^.water main r la
941 MWD Import Station 300,000 300,000 Modifications to MWD import stations.
Modifications rt
s
942 Chlorine Room Modifications 180,000 180,000 Modifications to chlorine facilities to bring,itt�
conformance with State requirements }
Multi-Year Projects
Overmyer Reservoir Structural 2,500,000 2,500,000 Design and construction of Overmyer "
Improvements Reservoir,structural(seismic renovation)
j
Talbert Valley Reservoir/ 1,850,000 1,850,000 Includes land cost, 16mg reservoir,pump
Booster Station (Stage 1) station,6500 LF 30 in transmission main.
(Assume land acquisition&project design in
FY 96/97)
M`
At
S5,315,000 7 7 k
r
� r
City of Huntington Beach
[OLD INTER-DEPARTMENT COMMMUNICATION
HUNTINGTON BEACH
.A
Gn c -
TO: SCOTT FIELD, Deputy City Attorney
FROM: ROBERT J. FRANZ, Deputy City Administrator
s �
SUBJECT: WATER MASTER PLAN: BUDGET
DATE: June 20, 1997
The 1996/97 budget for Master Plan Improvements is $5,315,000. Attached is a list of
the Master Plan Projects. Estimated revenue from the Capital Surcharge for 1996/97 is
$4,300,000.
For 1997/98, the requested budget for Water Master Plan Projects is $4,000,000.
(Project List to be submitted later.) The estimated revenue for 1997/98 from the Water
Capital Surcharge is $4,900,000.
l
ROBERT J. NZ
Deputy City A ministra r
RJF:skd
Attachment
0026247.01 06/20/97 11:06 AM
While some have taken the position that once an agency board takes a position on a ballot
measure, all agency communications on the subject are "campaign literature," the Subcommittee
finds no support in California case law for this stand. And, with the Proposition 218 shift of
decision-making power, the educational role of an agency becomes much more important.
No California cases_have addressed the issue of whether public funds may be used to
-oppose majority protests of assessments by property owners. Is this like opposing a ballot
measure, or is this like lobbying another government body, which is legal? Majority protests are
not elections; they do not have secret ballots, and they do not follow the rule of one.person, one
vote. However, they are like ballot measures in that a broad segment of affected.public is asked
to make a decision that would otherwise be made by elected representatives. In .the absence of
clarifying legislation, or until there is applicable case law or FPPC guidance, the Subcommittee
suggests that each agency.assume that the campaign.rules apply to majority protest.procedures or,
at the least, approach these issues with great caution.
For further information, readers may wish to review "Legal Issues Associated with City
Participation in Ballot Measure Campaigns," League of California Cities, July 1996.
13 1/31/97
charge is not imposed upon real property or upon a person as an incident of property
ownership.
3. For A Consumption-Based Charge. The fee or charge adopted herein
shall be imposed on the basis of the amount of water used or consumed by the customer.
The fee or charge is not imposed upon real property or upon.a-person as an incident of
property ownership. A customer may reduce or avoid the fee by reducing or discontinuing
use.
The fee or charge adopted herein was not calculated-.or developed on the basis of
any parcel map, including an assessor's parcel map.
IV. AGENCY ACTIVITY IN CONNECTION WITH LOCAL'REVENUE
ELECTIONS AND PROTEST PROCEEDINGS
Proposition 218 shifts decision-making power on revenue matters from elected officials to
other groups in several ways. First, taxes, assessments, and "fees and charges" are now subject to
repeal or reduction by initiative. Second, assessments are subject to a new, mailed-ballot Iprotest
procedure, with each property owner's vote weighted proportionately according to financial
obligation. Third, fees and charges may be subject to an old-style majority protest, apparently
with one vote per parcel. Finally, new or increased fees and charges for services other than water,
sewer, and refuse collection may require approval either-by property.owners or registered voters.
How can an agency advise these various constituencies on the.effects of a proposal? Very
carefully.
A public agency cannot, in the absence of clear legislative authority, expend public funds
to promote a partisan position on a ballot measure, whether it is a statewide initiative or one of
the agency's own.I These rules now apply to voter-proposed initiatives to reduce or repeal
agency taxes, assessments, fees, and charges. In such cases, however, the agency's board can take
a position supporting or opposing the ballot measure. Even if the meeting at which the board
debates the measure and takes a position is televised as part of a regular program of broadcasting
meetings, there will be no illegal expenditure of public funds. The board's position may also be
communicated, through a flier or other means, to anyone who asks. It may not be communicated,
unsolicited, at public expense.
On the other hand, a public agency may use public funds to provide a fair presentation of
the relevant facts concerning a ballot measure. The Fair Political Practices Commission will
advise an agency promptly if information that it proposes to distribute is such a fair presentation,
or if it is prohibited campaign literature subject to regulation under the Political Reform Act.
Agencies do have the power to lobby other government agencies:the prohibition is on "lobbying" the electorate.
The theory is that while we may look to a local agency to advance our causes with other governments. an agency is
not supposed to choose sides in a local election. This.say the courts. is as improper as an agency board endorsing
candidates in the election for scats on the board.
12 1/31/97
owner of a water right cannot make any use of that right xvithout incurring the
charge, the charge is imposed on a person as an incident of property ownership
and cannot be avoided, except by completely abandoning the property right. This
argument would indicate that such a charge is subject to Article XIII D. However,
a contrary argument can also be made that, since no property owners' water right
is determined and all producers benefit from-mitigation of overdraft in proportion
to their use of the groundwater basin, it.is.use, rather than property ownership,
which triggers the charge.- A producer may avoid the fee or reduce the amount to
be paid by discontinuing or reducing his pumping. This,analysis would indicate the
charge is not subject to Article XIII D.
Since the application of Article XIII D to groundwater replenishment or
pumping charges is not clear cut, careful analysis should be done-for such.charges
to distinguish whether the charge is imposed as an incident of property ownership,
or on the basis of the person using a service.
11. Fireflow Charges. Fire flow charges imposed upon all or a
portion of the land within the public agency,whether•or.not the,land.is connected
to the retail water system (Government Code §53069.9),-are likely to be found
subject to the requirements of Proposition 218 with respect to adoption. Such fees
are imposed as an incident of property ownership and cannot be avoided by
declining the service.
12. Parcel Charges. Any fee or charge imposed on the basis of
acreage, frontage, or per parcel, and imposed whether or not the service is
requested or used, are likely to be found subject to the-procedural-and substantive
requirements of Article XIII D, §6, including such things as trash collection fees,
library, parks, street lighting, landscape maintenance, etc.
III. ADOPTING A FEE OR CHARGE NOT SUBJECT TO ARTICLE XIII D.
A. Findings May be Helpful. In light of the apparent confusion over which fees
are subject to the requirements of Article XIII D, §6, the Subcommittee recommends inclusion of
findings or recitals in an ordinance or resolution adopting a fee which establish that the fee or
charge is imposed as an incident of use, rather than property ownership. The following general
language may be a way to clarify the intent of the adopting agency.
1. For a Connection Fee or Capaciry Charge. The fee or charge adopted
herein shall be imposed only as a condition of extending or initiating service upon the
request of a customer. The fee or charge is not imposed upon real property or upon
persons as an incident of property ownership.
2. For a Mon/hly Service Fee. The fee or charge adopted herein shall be
imposed as a condition of service by the agency to the customer.-Any customer may avoid
payment of the fee or charge by disconnecting from the facilities of the agency. This fee or
!1 1/31/97
identify the parcels to which the fee will be applied, and the amount of the charge
to be imposed upon each parcel, as would be required to comply with the notice
requirements of Article XIII D, §6(a)(1).
For these reasons, the Subcommittee believes that it would be reasonable
-- -- to conclude that connection fees and capacity charges are not fees.and charges
subject to the requirements of the Proposition 218.
9. Standby Charges. Many levies by.water agencies which.have
historically been characterized as standby charges may more properly be
characterized as immediate availability charges or other.types of charges. Water
agencies should carefully scrutinize the basis for the charge and denominate it
accordingly. Standby charges imposed pursuant to the Uniform Standby
Procedures Act (Government Code §54984 et seq.) or any other authority are
classified as assessments by Proposition 218 (Article XIII D, §4). See the
discussion of assessments under Section I(B) above.
10. Water Replenishment Charges and-Groundwater Pumping
Charges. Groundwater replenishment charges, used to fund water purchases for
groundwater recharge, are generally imposed on the basis of the amount of water
produced from the groundwater basin by each producer(see, e.g., Water Code
§60317). Occasionally, a charge,is levied only on-the-amount pumped over the
producers' adjudicated share(Water Code §60350); in other cases it may be
allocated according to each producers' pumping right or share of the.safe natural
yield of the basin.
The right to produce water from groundwater basin may be associated with
ownership of overlying land or may be an appropriative right; but in either case, it
is generally considered to be a property right. The production of water by
extracting it from the basin is the exercise of a property right. Whether a
groundwater replenishment or pumping charge is a "fee or charge imposed upon a
person as an incident of property ownership" depends upon the basis for and
method of calculating the charge. For instance, in an adjudicated groundwater
basin, if the charge is imposed only on the amount of water produced in excess of
the producer's share of the safe natural yield in order to correct for overdraft, then
it is reasonably clear that the charge is imposed because the producer is using a
service over and above the adjudicated property right. The charge is not imposed
upon the producer merely as an incident of property ownership and is, therefore,
not subject to Article XIII D. By contrast, a replenishment charge imposed on
water produced within the pumper's adjudicated share of the safe natural yield
would seem to be subject to Article XIII D, because the pumper can make no use
of the property right without paying the charge.
In an unadjudicated basin, a charge on all production of water from the
basin to fund basin replenishment is arguably also subject to Article XIII D. If the
10 1/31/97
§35501). Since a flood control facility benefits all properties within an area subject
to flooding and cannot be isolated to benefit only those properties where the
owner elects to pay the fee, property owners do not have an option to decline the
service and avoid the charge. This would seem to be a classic fee subject to
Article XIII D (or, perhaps, an "assessment"). The area of benefit and the parcels
subject to the charge are usually identified by reference to a parcel map. The fee is
imposed on the owners solely as a result of their owning property and not because
they have requested the service. There is no ability to opt-out of the service and
the fee is often collected on the tax bill.
In some jurisdictions, a flood control fee is based upon the estimated runoff
calculated based upon the amount of area, which is paved or covered by
structures, which results in increased runoff. This type of fee depends upon the
use of the property and is, to some extent, controlled by the owners. Unless the
owner can completely escape the fee, however, the analysis under the above tests
would weigh in favor of the fee being subject to Article XIII D.
8. Acreage Supply Charges, Connection Fees, and Capacity
Charges. These charges are imposed at the time-a-property.owner first requests
water service to be extended to the property. They may be based upon the number
of acres to which water will be supplied,.the number or size of connections
required, or the estimated demand upon the system from a proposed development
calculated by EDUs. A common characteristic is that they are only paid at the
time the property owner requests that service to the property be initiated or
expanded. Therefore, a property owner who never requests service or who
acquires property to which service is already established does not pay the fee.
Fees or charges "imposed as a condition of property development" are not
affected by Proposition 218 (Article XIII D, §I(b)). In light of this exemption,
there is an inclination to characterize connection fees, capacity charges, and
acreage supply charges as developer fees. While this may be advantageous from a
Proposition 218 standpoint, taking such a position could be inconsistent with the
statutory interpretation some water agencies have followed that connection fees
and capacity charges are governed by the requirements of Government Code
§66016, and not by the developer fee adoption and accounting procedures under
Government Code §§66001-66007.
Without claiming the exemption for developer fees, however, connection
fees and capacity charges may, nevertheless, be outside the definition of fees or
charges to which Proposition 218 applies. Connection fees and capacity charges
are imposed as an incident of a request for service and not as an incident of
property ownership. Property owners who do not request connections do not pay
the fee, and often the amount of the fee depends upon the number of dwelling units
or type of use for which the connection is requested, which is within the control of
the owner. As a result, it would be impossible, at the time the fees are adopted, to
9 1/31/97
In addition, the practice of many sewer districts of
collecting sewer charges with the property tax bill (see Neater Code §§ 31 102 and
35502) will be used to support an argument that Proposition 218 applies, since the
charge is a lien on the property even before it becomes delinquent. This collection
method may leadd-a court to conclude that the sewer charge is imposed "upon a
parcel." Jurisdictions which use the property tax bill for collect]on•may wish to
consider changing to a periodic billing system, under which non-payment creates ,
no property lien (but is merely a personal debt which must be collected in a court
action). Such a change will be costly for those jurisdictions, but may be an
investment worth the price if it avoids the additional costs which will be caused by
compliance with Proposition 21 8's new procedures.
4. Fees and Charges Imposed By Another-Agency. Charges
imposed by a wholesale agency upon a retail agency are-not likely to be found
subject to Proposition 218 requirements because they are not imposed upon
specific property or the owner of property, and the allocation and collection of the
funds to pay the charge is determined by the retail agency.
5. Conservation Charges and Penalties Imposed Upon Excessive
Use. Penalties and charges-for excessive use of water would not be subject to
Proposition 218 because they are not imposed as an incident of property
ownership, but solely on the basis of the customer's use.
6. Acreage-Based Irrigation Charges. In many districts supplying
irrigation water, lands within the district are charged for irrigation water based
upon the acreage of the property payable without regard to the actual amount of
water used. The rationale for an acreage-based charge is that the property owner
is entitled to receive a proportionate share of the water provided by the district
based upon the acreage.owned. In other districts, the charge varies with water
availability and demand based on the type of crop and the number of acres
irrigated.
Where the charge is imposed, whether or not any water is actually used, as
an incident of owning property within the district, the charge is most likely subject
to Article XIII D.
Irrigation charges based upon actual or estimated use, are less likely to be
subject to the procedural requirements of Article XIII D, because they are based
upon consumption. If a landowner uses no irrigation water and thereby can avoid
the charge, Proposition 218 should not apply.
7. Flood Control Funding. Generally, funds to pay for flood
control facilities are raised by assessments on property benefitted by the facilities,
although there is authority for imposing fees for this purpose (Water Code
8 1/31/97
monthly meter charge for commercial accounts may vary based upon the type of
commercial establishment. Again, the application of the tests set forth above
would indicate that the meter charge is not subject to Article XIiI D.
The charge is not set in reliance on a parcel map, but is based upon
reasonable estimates of the demand placed upon the system according to meter
size or type of commercial use (including administrative costs). The charge is only
imposed upon persons requesting the service; the owner of property without a ,
water meter is not subject to the charge. A property owner may-opt-out by not
requesting a water connection or by having an existing connection removed and,
thereby, avoid the charge. Like water rates, the monthly meter charge is not a lien
on a parcel from inception. As with consumption-based water.charges, a water
district may use a lien as a collection measure for a.delinquent account, or may not
have that option if the customer requesting the service is a tenant, rather than the
property owner. For these reasons, the Subcommittee has concluded that a meter
charge would not be a "fee" or "charge" within the meaning of Proposition 218,
even though it is imposed without respect to the actual amount of water used.
3. Sewer Charges. Two common methods for calculating sewer
charges are (1) a constant monthly payment based on (a) an equivalent dwelling
unit ("EDU") value assigned to the property which reflects the use of the property
(e.g., a single family home is one EDU,.a grocery store may be assigned 10 EDUs)
and, (b) the strength of the effluent typically produced by that use(e.g., restaurants
produce higher strength effluent than do offices), and (2) a historic use-based rate
which is calculated on the previous year's water use on the property, a method
which is based on the assumption that water use correlates to sewage discharge.
Sewer charges based upon actual use of the system as measured by historic
water use would appear to be consumption-based and exempt from Article XIII D
by the same rationale as water charges based on consumption measured by a
meter. The same logic should apply to sewer charges based on EDU's, since the
EDU system reflects the experience of sewer service providers that certain kinds of
uses place roughly the same levels of demand on the sewer system. An EDU
system may not measure actual use as precisely as a system based on water
consumption, that this is merely a difference in the degree of accuracy of
measurement.
The argument that Proposition 218 applies to sewer charges will find some
support in those jurisdictions which require developed properties to be connected
to the sewer and prohibit the use of septic systems for public health or water
quality reasons (see, e.g., Water Code §§31 103 and 35503). Property owners in
those jurisdictions have no reasonable opt-out ability. On the other hand, owners
of vacant land do not ordinarily pay sewer charges, even where connection is
mandatory, thus strengthening the argument that Proposition 218 does not result
from property ownership, but instead results from property development.
7 1/31/97
(ii) the amount of the fee or charge to be paid varies depending upon a characteristic of the
property(e.g., parcel size or frontage length), and not the behavior of the person using the
property.
The ACWA Proposition 218 Subcommittee recognizes that the language of the measure is
susceptible to more than one interpretation, and that its view of the true meaning-of the measure is
not beyond doubt. Therefore, the Subcommittee will be working to propose clarifying legislation.
In addition, it is likely that there will be litigation which will involve disputes concerning the ,
meaning of the measure, and the ACWA Subcommittee will be working to monitor that litigation.
The following analysis is based upon the ACWA Subcommittee's view of"fees and
charges."
D. Analysis of Various Special District Fees and Charges.
The following examples are presented to demonstrate the application of the above
viewpoint to evaluate whether certain commonly used fees and charges are subject to Proposition
218. This analysis represents the Subcommittee's preferred interpretation of the provisions of
Article XIII D. It is very possible that the courts might adopt a different.interpretation when
ruling on challenges to fees and charges.
The Subcommittee strongly cautions ACWA agencies to'carefully examine all
sources.of revenue and to make a determination that each is-properly_categorized as a
"tax," "assessment," or "fee or charge" for purposes of Proposition 218.
1. Consumption-Based Water Charges. Water charges imposed
solely on the basis of the amount of water consumed would clearly not be subject
to the requirements of Article XIII D under these tests. Water charges are not set
with reference to any type of parcel map and do not inevitably result from property
ownership. They are imposed for water use, not as an incident of property
ownership. A property owner who uses no water does not pay a water charge.
Finally, a water charge is not a lien on the property from its inception, but only
becomes a lien if the property owner is delinquent and the water district records a
certificate of lien as a collection measure. If the customer is a residential or
commercial tenant, rather than the property owner, the district may not be able to
impose a lien.
This analysis does not change for a block rate or tiered rate used to
encourage conservation, or for a lower rate lifeline feature. Water rates remain
consumption based and are, therefore, not imposed upon a parcel or a person as an
incident of property ownership.
2. Meter Charges. Water service charges often include a monthly or
bi-monthly meter charge which is a fixed amount payable whether or not any water
is used. It is usually based on the size of the meter, although in some districts, the
6 1/31/97
"Reliance by an agency on any parcel map, including, but not limited to, an
assessor's parcel map may be considered a significant factor in determining
whether a fee or charge is imposed as an incident of property ownership for
purposes of[Article XIII D, §6(b)(5)J."
- As an initial test, therefore, an agency should ask whether the fee is of a type
generally based upon reference to parcel map.
2. Property Ownership Test. A fee or charge is subject.to Proposition 218 if +
it must be paid-by a person simply as a result of property ownership. . If the fee or
charge results from some other reason (for example, requesting service from the
public agency), then Proposition 218 does not apply.
3. No Opt-Out Test. If a property owner cannot avoid payment of the fee or
charge by declining the service for which the fee or charge is paid, the fee or
charge is most likely subject to Proposition 218.
4. "On the Parcel" Test. The fee or charge is.subject to.Proposition.218 if
the fee or charge is alien on the parcel from the creation-of the fee or-charge, as
distinguished from being a lien on the parcel in the event of a default in payment.
C. Scope of"Fees and.Charges" Provision. The Implementation Guide (at pages
46-49) explains that there is disagreement among attorneys as to the applicability of Proposition
218 to certain fees and charges -- such as consumption-based water charges. One view of Prop
218 holds that it was intended to deal with efforts to circumvent Proposition 13 by creating new
financing devices which appear to be property taxes and mis-labelling them as "fees" or "charges."
Under this view, a consumption-based service charge for water is very different from a tax, and
has none of the characteristics of a typical tax, and is therefore outside the reach of Proposition
218. A contrary view of the measure holds that Proposition 218 was intended to
comprehensively regulate all forms of agency revenue raising, including fees and charges, and that
this broad interpretation would include all fees and charges for services normally provided to real
property.
Both viewpoints find support for their positions in the text of Proposition 218, statements
of purpose by the measure's author, and the apparent goals of the initiative_ These arguments are
summarized in the Implementation Guide.
The ACWA Proposition 218 Subcommittee has carefully considered both sets of
arguments in this debate, and has unanimously concluded that the better view is the one which
interprets Proposition 218 as applicable to taxes, assessments and those fees and charges which
share important characteristics with taxes and assessments. Some of these characteristics are: (1)
the liability to pay the fee or charge arises due to property ownership alone, and not from any
other act, request or status of the property owner (such as a request for water or sewer service),-
5 1/31/97
3. Procedures for Adoption or Increase of Fees and Charges.
a. Notice. Mailed notice is required to the record owner of each
parcel upon which the fee or charge is proposed for imposition, stating the amount
of the fee or charge upon that parcel. (Note: There is some inconsistency here
because the definition of"property ownership". may include a tenancy (Article XIII- --
D, §2(g)). Since tenancies of 35 years or more are reflected on the assessor's roll
as ownership interests, use of the assessor's roll for mailed notice purposes may ,
satisfy this requirement.) The purpose of the fee and basis for calculation must be
included in the notice, along with the time, date, an&place for a-public-hearing
(Article XIII D, §6(a)(1)).
b. Protests. The fee or charge may not be.imposed if written protests
are presented by a majority of owners of the identified parcels (Article XIII D,
§6(c)). Note that there is no authority in Proposition 218 to weight the protests
concerning fees and charges according to relative financial burdens, as
distinguished from the Proposition 218 procedure for assessment protests which
expressly includes weighting of ballots.
C. Voter Approval. Except for fees or charges for sewer, water, and
refuse collection, all fees and charges must also be submitted to a vote and
approved by either(i) a majority of the affected property owners, or, at the option
of the agency, (ii) a 2/3 vote of the electorate residing in the area where the fee is.
imposed. The election must be conducted within forty-five(45) days of the hearing
(Article XIII D, §6(c)).
II. APPLICATION OF PROPOSITION 218 REQUIREMENTS TO SPECIAL
DISTRICT FEES AND CHARGES.
A. Evaluation Required. All fees, charges, and exactions levied by local agencies
must be evaluated to determine whether they are subject to the procedural requirements of
Proposition 218, except for standby charges, which are expressly deemed to be assessments
subject to the provisions of Section 4 of Article XIII D (Article XIII D, §6(b)(4)).
B. Tests. The only fees and charges subject to Article XIII D are those which are
"imposed by an agency upon a parcel or upon a person as an incident of property ownership,
including a user fee or charge for a property-related service" (Article XIII D, §2(e)).
The Proposition 218 Implementation Guide identifies a number of tests which could be
used to determine whether a fee or charge is subject to Proposition 218:
1. Constitutional Criterion: Parcel Maps.
4 1/31/97
4. Other Provisions Governing Assessments.
a. Assessments may only be imposed upon parcels which receive a
special benefit over and above general benefits conferred on real property located
in the district or to the public-at-large from the public improvement. The
assessment to each parcel may not exceed the reasonable cost of the proportional
special benefit conferred on that parcel. The agency must allocate the costs
between special and general benefits provided by the project and cannot recover
the proportional cost attributable to the general benefit as an assessment (Article
XIII D, §4(a)).
b. Parcels owned by the State of California, the United States,.and any
political subdivision which receive a benefit are not exempt from an assessment.
C. Fees and Charges.
1. Definition. "Fee" or "charge" is defined.in Proposition.218_as.any levy
other than an ad valorem tax, special tax, or assessment, imposed_by•an agency upon a parcel or
upon a person as an incident of property ownership, including a user fee or charge fora property-
related service (Article XIII D, §2(e)). Reliance by an agency on any-parcel map may be
considered a significant factor in determining whether a fee or charge is imposed as an incident of
.property ownership (Article XIII, D, § 6(b)(5)).
2. Substantive Limitations on Fees and Charles. (Article XIII D, §6(b))
a. No Profit. Revenues cannot exceed amount required to provide the
property-related service.
b. Stick to the Knitting. Revenues may not be used for any other
purpose than the purpose for which imposed.
C. Limited to Proportional Cost.of Service. The amount of the fee or
charge on a particular parcel may not exceed the proportional cost of the service
attributable to that parcel.
d. Actual Use or Immediate Availahility. The service for which the
fee is imposed must be actually used or immediately available to the owner of the
property.
e. No General Governmental Services. No fee or charge may be
imposed for general governmental services, including police, fire, ambulance, or
library services, where the service is available to the public-at-large in substantially
the same manner as to property owners.
3 1/31/97
b. The assessment on each parcel cannot exceed the reasonable cost of
the proportional special benefit to that parcel as determined for each parcel
(Article XIII D, §4(a)).
C. The local agency must conduct a public hearing and an election by
mailed ballot, with notice to the record owner of each parcel subject to the
assessment, of the amount chargeable to that parcel (Article XIII D, §4(c)).
d. The-assessment may not be imposed if a-majority of the ballots
returned oppose the assessment, with each ballot,weighted according to-the
proportional financial obligation of the affected parcel (Article'XIII D, §4(e)).
e. If an assessment is challenged in court, the local agency has the
burden of proof as to whether the assessment exceeds the reasonable cost of the
special benefit to the affected parcels (Article XIII D, §4(f)).
3. Grandfather Provision. The following.assessments,:if.they.existed on
November 6, 1996, are expressly exempted from the procedures and.approval process (but not
.exempted from the substantive requirements) of Proposition 218:(Article XIII D, §5).
a. Any,assessment imposed-exclusively to finance capital costs or
maintenance and operation expenses for sewers,.water, flood control and drainage
systems.
b. Any assessment imposed pursuant to petition signed by all affected
landowners.
C. Assessments, the proceeds of which are used exclusively to pay
bonded indebtedness, where failure to pay would violate the Contracts Clause of
the U. S. Constitution.
d. Any assessment which has previously received approval by a
majority vote of the voters.
e. With respect to a, b, and d, subsequent increases in the amount of
the assessment are subject to the procedures and approval requirements (Article
XIII D, §5(a)-(d)).
f. The Subcommittee also unanimously believes that assessments
(including "standby charges") imposed prior to November 6, 1996 and reimposed
thereafter (for example, a maintenance assessment which is reimposed annually)
are not subject to the procedures and approval process of Proposition 218,
provided the annual reassessment is accomplished using the same methodology and
rate as that which pre-existed the measure.
2 1/31/97
Background
Proposition 218, approved by the voters on November 5, 1996, amends the California
Constitution by adding Article XIII C and D to the tax limitation provisions adopted by
Proposition 13 and its progeny. The stated purpose of Proposition 218 is to "close loopholes" in
Proposition 13 which allow local governments to increase fees,charges, and benefit assessments
without;a public vote, rather than increasing general and special ad valorem taxes which do
require a vote. Proposition 218 imposes new landowner approval procedures for benefit
assessments on real property and for fees and charges imposed "as an incident of property
ownership."
Following the-November 1996 election, the ACWA Legal•Affairs-Committee formed the
Proposition 218 Subcommittee. Some of its members have participated in.the work of the
League of California Cities in preparing the Implementation Guide, and others are working with
representatives from the League, CASA, CSDA and CSAC in discussions concerning proposed
legislation to clarify Proposition 218.
The purpose of the following memorandum is to give ACWA members some guidance in
complying with Proposition 218. 'This memo is provided for general information only and-is
not offered or intended as legal advice. Readers should-seek-the advice of their agency's
counsel on all issues related to Proposition 218.
I. SUMMARY OF PROPOSITION 218.
A. Taxes. Article XIII C is added to the Constitution to clarify that all taxes
imposed by any local government are either general or special taxes, that special purpose districts
have no-power to levy general taxes, that special taxes are subject to a two-thirds voter approval
requirement, and that all local taxes, assessments, fees, and charges are subject to reduction or
repeal by initiative.
B. Assessments. Article XIII D, §4 establishes procedural requirements for
imposition of assessments.
1. Definition.
Assessments are defined as any levy or charge on real property for a special benefit
conferred upon the real property, including special assessments, benefit assessments, and
maintenance assessments (Article XIII D, §2(b)). Standby charges are deemed to be assessments
(Article XIII D,.§5(b)(4)).
2. Procedure for Assessments.
a. Assessments must be supported by a detailed engineer's report
(Article XIII D, §4(b)).
1 1/31/97
ACKNOWLEDGMENTS
T/te Association of California Water Agencies gratefully acknowledges the
following individuals who contributed to the preparation of this document.
Steven A. Amerikaner Tom Harron
Hatch & Parent Otay WD
Joan Arneson Douglas B. Jensen
Bowie Arneson Kadi Wiles& Giannone Baker, Manock & Jensen
Tony Bennetti Robert B. Maddow
Santa Clara Valley Water District Bold, Polisner, Maddow, Nelson & Judson
Syd Bennion Janet R. Morningstar
Metro WD of Southern California McCormick, Kidman &Behrens, LLP
Vincent F. Biondo Nancie Ryan
San Diego County Water Authority East Bay MUD
C. Michael Cowett Ed Schlotman
Best, Best & Krieger LLP Los Angeles DWP
Jeffrey F. Ferre Michael Sexton
Redwine& Sherrill Minasian, Minasian, Minasian, Spruance,
Baker, Meith, Soares & Sexton
Wynne Furth
Best, Best & Krieger LLP
TABLE OF CONTENTS
ACKNOWLEDGMENTS
I. SUMMARY OF PROPOSITION 2I8 1
II. APPLICATION OF PROPOSITION 218 REQUIREMENTS
TO SPECIAL DISTRICT FEES AND CHARGES 4
III. ADOPTING A FEE OR CHARGE NOT SUBJECT 1 ]
TO ARTICLE XIII D
IV. AGENCY ACTIVITY IN CONNECTION WITH LOCAL 12
REVENUE ELECTIONS AND PROTEST PROCEEDINGS
PROPOSITION 218
Local Water Agency
Guidelines for Compliance
Association of California Water Agencies
ACWA Legal Affairs Committee
Proposition 218 Subcommittee
,S
February 1997
Proposition 218 was meant to prevent property owners with undeveloped property from being
charged for services they are not presently using,but would be available to them if they should
ever develop. These charges are known as stand-by charges. However, given the fact that the
City surcharge is only collected from persons actually using water, and that the monies are spent
in the same fiscal year that they are collected,the surcharge is valid under Proposition 218, even
if a court should hold that Proposition 218 does apply to consumption-based water rates.
Gail Hutton
City Attorney
Attachments: 1) ACWA's Guidelines
2) Projected revenue and expense schedule
c: Michael Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
4
SF/s:G:SF-917Memos:Franz620
6/24/97-#2
If Proposition 218 applied to water rates, the rates could not exceed the amount required to
provide the service. (Article XIII D, § 6(b). It is our understanding that an outside consultant,
the firm of Peasley, Aldinger and O'Bymachow has concluded that the cost to the general fund
of providing City services to the Water Department, such as pavement management costs and the
like, actually exceed 15%. Consequently, even if Proposition 218 did apply to water rates,the In
Leiu Fee would be valid because it meets Proposition 218's requirement that fees be based upon
the cost of providing service. That is, 15%of the cost of water sales represents services the City
provides to water users.
However, regardless of whether the In Lieu Fee exceeds the cost of City services to the Water
Department, because the amount of the In Lieu Fee is based upon water revenues, which.are
determined by sales, the fee is exempt from Proposition 218 because it is based upon
consumption, not property.
3. The Capital Surcharge Both Satisfies Proposition 218. And Is Not A Consumption-Based
Water Rate Subject To The Proposition.
Pursuant to Section 14.12.040 of the Municipal Code,the City has imposed a capital surcharge
on water rates to fund the Capital Improvement Master Plan. A$3.00 per month surcharge is
added to residential water accounts based upon the size of the meter. Higher surcharges are
applied to commercial accounts based upon their larger meter size.
Again, the rate surcharge is not based upon any aspect of the property itself, but upon the owners
use of water, specifically the meter size the property requires. If there is no meter,then there is
no charge to the property. Consequently, since the surcharge is a consumption-based water rate,
it is not subject to Proposition 218.
Even if a court ultimately found that Proposition 218 did apply to water rates,the rate surcharge
would still be valid. The rate surcharge is based upon spreading on a fair-share basis the cost of
capital improvements to the water system, as specified in the Water Master Plan.
However, it may be contended that Section 14.12.040 violates Proposition 218 because it is a
pay-as-you-go program. Proposition 218 requires that no fee or charge be imposed for service
unless the service is actually used by or immediately available to the owner of the property in
question. (See, Article XIII D, § 6(b).) Assuming for the moment that consumption-based water
rates are subject to Proposition 218,the charge might be made that the water rate surcharge is
invalid because the capital facilities are not"immediately available." To the contrary, attached is
a projected revenue and expense schedule for the Water System Master Plan. It shows that the
surcharge will generate for 1996-97 $4,300,000, and that the expenses for the Water Master Plan
in the same year were $5,315,000. Consequently,rate payers are actually receiving services in
advance of their payment.
3
SF/s:G:S F-917Memos:Franz620
6/24/97-#2
example, a fee for metered water usage) should not be considered a
property related fee because it is based on service usage, rather than
property ownership. Because Proposition 218 does not restrict non-
property related fees,the definition of this term will be an important
and sensitive issue for the Legislature and courts."
The reason for this dispute is because Proposition 218 first defines fees as those charges that are
"an incident of property ownership." However, most water fees are not fixed according to
property ownership, but are based upon the level of water usage. In fact, except for"standby"
fees which are typically charged on a per acre basis based upon the availability of water, water
fees can be avoided entirely if the property owner does not purchase any water or maintain a
water meter.
On the other hand, Proposition 218 states that before new or increased fees can be imposed, they
must first be considered at a public hearing, and second, approved by the voters, except for
"sewer, water and refuse collection services", which only require the public hearing. Since water
service is expressly identified in the Proposition,this suggests that water fees are subject to
-Proposition 218. Alternatively,this apparent contradiction between limiting fees to those that
relate to property, and the reference to sewer, water and refuse fees could be resolved if the
courts determine that Proposition 218 only applies to sewer, water and refuse collection services
that are not based upon the level of usage.
This is the view taken by the Association of California Water Agencies ("ACWA"). Attached is
a copy of ACWA's guidelines for compliance with Proposition 218, which were developed by
the Proposition 218 Subcommittee of the Legal Affairs Committee of ACWA. It concludes that
consumption-based water rates are not subject to Proposition 218 while other types of water rates
are. Consumption-based water rates are those that do not arise due to property ownership, but
instead come from a request for water service. Further, the amount of the rate depends upon the
behavior of the person using the water, and not upon the property, such as the parcel size or
frontage length.
2. The 15% In Lieu Fee Both Satisfies Proposition 218, And Is Not A Consumption-Based
Water Rate Subject To The Proposition,
In 1959, the City imposed a requirement that"an amount equal to fifteen percent(15%) of the
gross revenues received from the sale of water by the Water Department"be paid into the City
Treasury "in lieu of franchise and property taxes." Prior to the formation of the City Water
Department,the City had received franchise fees and property taxes from the private water
companies that operated in the City. Since the City-owned Water Department does not pay
property taxes nor franchise fees,the In Lieu Fee was intended to replace those prior City
revenues.
2
SF/s:G:SF-917Memos:Franz620
6/24/97-#2
�j �' CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO: Robert Franz, Deputy City Administrator
FROM: Gail Hutton, City Attorney
DATE: June 24, 1997
SUBJECT: Water Rates
RLS 97-499
INDEX: Internal Organization and Operation/Departmental
Process/Proprietary Activities/Water/Finance/Revenue
Services/Taxes/Limitations/Proposition 218
QUESTION:
Does Proposition 218 apply to the Water Rates, specifically the 15%In Lieu Fee and the capital
surcharge?
ANSWER:
Proposition 218 is vague as to whether it applies to water rates. However,the better view is that
Proposition 218 does not apply to consumption-based water rates, such as the 15%In Lieu Fee
and the capital surcharge.
DISCUSSION:
1. Proposition 218 Does Not Apply To Consumption-Based Water Rates.
Proposition 218 restricts property-related fees, which are defined as fees imposed"as an incident
of property ownership." At this time, there is no concrete answer to which fees, such as water
rates and trash fees, meet this definition. The Legislative Analyst of the State of California,
Elizabeth G. Hill, in her booklet entitled Understanding Proposition 218, has stated the following
regarding the scope of the term"property related fee":
"The drafters of Proposition 218 indicate that it was their intent to
include most fees commonly collected on monthly bills to property
owners, such as those for water delivery, garbage service, sewer
service, and storm water management fees. Other analysts of
Proposition 218 contend that fees that vary by level of service (for
1
S F/s:G:SF-917Memos:Franz620
6/24/97-#2
ATTACHMENT #2
City of Huntington Beach
Proposition 218 Analysis
Water Fund "In Lieu" Payment to General Fund
In-Lieu Payment
Are Water Rates "Property Related" Fees?
Yes No
Does Prop. 218 Apply No Continue "In
to Existing Fees? Lieu" Payments
Yes
Is "In Lieu" Payment No
More Than Cost of
General Fund Service?
Yes
Stop Excess "In Lieu"
Payments by 7/1/97
Proposition 218 Analysis
City of Huntington Beach "In Lieu" Payment
Proposed City Approach -- It is suggested that the City follow the lead of other
cities as described above. The City would continue the "in lieu" payments of
$3.3 million General Fund from the Water Fund based on the following:
(1) A reasonable interpretation of Proposition 218 is that Water related
fees and charges are not imposed "on a person as an incident of
property ownership". .The Cities of Los Angeles and Sacramento
have indicated they anticipate litigation on their position that water
fees are not "property related". Therefore, the courts will probably be
reviewing this legal question. The ultimate result of court
determinations will apply to the City of Huntington Beach.
(2) Proposition 218 may not apply to existing fees and charges. Similar
to #1 above, the courts will probably ultimately answer this question
and the court determination will apply to the City of Huntington
Beach.
(3) An outside consultant has prepared a detailed "cost of service" study
on the full cost of providing services to water customers. The study
documents City costs in excess of the annual 15% "in lieu" payments
to the General Fund.
Summary -- By following the above approach the City can continue in the
immediate future to pay $3.3 million per year from the Water Utility to the
General Fund as part of the annual budget. As court determinations are made in
future months and years, the City will then be in a position to implement the
interpretations of the vague language of Proposition 218.
PR218.DOC -3- 07/14/97 1:59 PM
Proposition 218 Analysis
City of Huntington Beach "In Lieu" Payment
for services that are normally delivered to real property on a
permanent location.
In summary, if the courts uphold the position that water fees are not
imposed "on a person as an incident of property ownership", then
Proposition 218 does not cover water fees and no action would be
required by the City relating to water fund payments to the General
Fund.
(2) Proposition 218 does not apply to existing fees and charges --
The text of Proposition 218 is not clear on the issue. Again, a
number of attorneys have reviewed Proposition 218 on this question.
Some have concluded that public agencies do not have to submit
existing fees to the Proposition 218 requirements so long as the fees
are not being increased. If the courts uphold this interpretation, then
no action would be required relating to existing water fees and
charges, including our water fund payment to the General Fund.
(3) The Amount of the In-Lieu Payment is Less Than the City's Cost
of Services -- Proposition 218 allows charges to ratepayers to cover
all City costs related to providing service to water customers. City
General Fund costs related to water services include billing,
collection, computer time, vehicle maintenance, building
maintenance, office space, supervision, equipment replacement
costs, building replacement costs, etc. These costs are part of
providing property related service to water customers.
In addition, there are other costs that are often not recovered from
water utility customers that are absorbed by the General Fund.
These include damage to city streets from repair/replacement of
water mains, costs in the Police and Fire Departments to protect and
inspect the water facilities, recovery of the costs of land, building and
other assets contributed to the water operation in past years,
recovery of prior unpaid administrative/overhead/billing costs, etc.
By calculating the full cost of these services and documenting their
annual amount, cities are preparing for the alternative of eliminating
their in-lieu payments and adopting a full "cost of service" approach
to charging their utility operations.
PR218.DOC -2- 07/14/97 1:59 PM
Proposition 218 Analysis
City of Huntington Beach "in Lieu" Payment
Water "In Lieu" Payment -- In 1959, the City Council adopted an Ordinance
requiring a disbursement (or payment) of 15% of the annual water revenues to
the City General Fund. The Huntington Beach Code states that this payment is
"in lieu" of the water utility paying property tax and franchise fees to the City. (If
the water utility were a private firm, it would pay property taxes and franchise
fees and the City General Fund would receive those revenues.) "In Lieu"
payments are common in Cities that operate their own utilities.
For Huntington Beach, the in lieu payment to the General Fund is an estimated
$3.3 Million in 1996/97. The Howard Jarvis Taxpayers Association (HJTA)
representatives have stated that Proposition 218 was intended to prohibit such
payments. The actual language of Proposition 218 provides limited support for
their intended result. The following two provisions are cited by the Proposition
218 authors as prohibiting payments to the General Fund:
"(1) Revenues derived from the fee or charge shall not exceed the
funds required to provide the property related service."
"(2) Revenues derived from the fee or charge shall not be used for
any purpose other than that for which the fee or charge was
imposed"
Note that the above language does not specifically prohibit payments from a
water utility to a General Fund "in lieu" of property taxes and franchise fees.
There is no specific language in Proposition 218 that refers to "in lieu" payments,
General Fund charges or costs, or payments to the General Fund. The actual
language of Proposition 21.8 is, therefore vague and unclear regarding "in lieu"
payments.
What are Other Cities Doina. -- We have contacted major cities in the state
such as Los Angeles, Sacramento, Long Beach, Riverside, Burbank, Santa Ana,
etc. While each city's approach to implementing Proposition 218 is unique
depending on their specific circumstances, most cities indicate that they will
continue to make their payments from utility funds to their General Funds. They
are taking the position that Proposition 218 does not prohibit such payments
based on one or more of the following arguments:
(1) Water fees and charges are not "property related" - Proposition
218 applies to fees and charges imposed "on a person as an incident
of property ownership". One view is that this phrase excludes user
charges based on consumption (such as water charges). The
second view is that Proposition 218 covers water fees and charges
PR218.DOC -1- 07/14/97 1:59 PM
ATTACHMENT # 1
REQUEST FOR COUNCIL ACTION
MEETING DATE: July 21, 1997 DEPARTMENT ID NUMBER: AS 97-027
A more detailed review of the "in lieu" payments is provided in Attachment 1 and the City
Attorney's opinion on both the "In Lieu" payment and the Water Capital Surcharge is
provided as Attachment 2. The conclusion of our staff review is that both of these City
fees/charges can be continued under Proposition 218.
City staff concurs with the point of view that water fees are imposed on a person due to use
of water, not "as an incident of property ownership". (The City imposes no water fees or
charges to properties that are not connected to the City's water system). However, this point
of view is not shared by all attorneys and the courts may subsequently rule on the issue.
If the City point of view on the above issue does not prevail, the City can only charge the
Water Fund for actual, documented costs of providing services. Attachment 3 is an outside
consultant review of such actual non Water Fund costs, concluding that costs are greater
than the current 15% "in lieu" payments plus existing charges to the Water Fund. (This type
of detailed study was not done in the past since the 15% "in lieu" payment was intended to
cover some of these costs.) Consequently, this study shows that even if a court later rules
that Proposition 218 applies to water rates, the City has complied with the requirement of
Proposition 218 that the water fees/charge do not exceed the cost of providing the service.
The outside consultant's preliminary report (attachment 3) concludes up to $8.5 million per
year could be assessed to Water Customers for non Water Fund costs being incurred by the
City. Currently, $2.7 million per year is being charged to the Water Fund for these costs. In
addition, the annual "In Lieu" payment to the General Fund totals $3.3 million. The
recommended action would continue the current 15% "In Lieu" payment and the $2.7 million
per year assessment. Due to time restraints, the outside consultant has not had an
opportunity to receive feedback from City staff on the results and conclusions of the cost
study. Therefore, the second recommended action in this RCA is submitted so that staff can
continue to work with the consultant to complete the study of the cost of Water services.
Attachment(s):
City Clerk's
Page Number No. Description
1. Detailed Review of the In-Lieu Payments
2. City Attorney's Opinion on the 15% In Lieu payment and Capital
Surcharge
3. Outside Consultant's Review of Water Costs
4 Municipal Code- In Lieu payment
5 Proposition 218
RCA Author: Robert J. Franz
0026915.01 -2- 07/28/97 2:22 PM
Fes- 44KC &3
RCA ROUTING SHEET
INITIATING DEPARTMENT: Administrative Services
SUBJECT: PROPOSITION 218 COMPLIANCE
COUNCIL MEETING DATE: July 21 , 1997
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Not Applicable
Resolution (w/exhibits & legislative draft if applicable) Not Applicable
Tract Map, Location Map and/or other Exhibits Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attomey) Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attorney) Not Applicable
Certificates of Insurance (Approved by the City Attomey) Not Applicable
Financial Impact Statement (Unbudget, over $5,000) Not Applicable
Bonds (If applicable) Not Applicable
Staff Report (If applicable) Attached
Commission, Board or Committee Report (If applicable) Not Applicable
Findings/Conditions for Approval and/or Denial Not Applicable
EXPLANATION FOR. MISSING ATTACHMENTS
REVIEWED "RETURNED FORWARDED
Administrative Staff ( ) ( �JA )
Assistant City Administrator (Initial) ( ) ( )
City Administrator (Initial) ( ) )
City Clerk ( )
EXPLANATION FOR RETURN'OF ITEM:
(Below • . For Only)
RCA Author: Robert J. Franz
= UOX, a . a4j
1fl_J
CITY OF HUNTINGTON BEACH 60 '
INTER-DEPARTMENT COMMUNICATION 1+
HUNTINGTON BEACH Connie Brockway,City Clerk �" ��� �, - `
Office of the City Clerk ' -"�B�'
A14.,
-7 -1 From Maybrice Henry e4.a ? ca"
Q Deputy City Clerk II "- 0-9,1•
The City Clerk's Office/City Administrator's Office Must Return Your
Agenda Item Due To The Following Requirements That Have Not Been Met
When Your Agenda Item Is Ready To Resubmit, Please Return to:
Pat Dapkus,Management Assistant, City Administrator's Office
I Signature(s)Needed
A On RCA
B On Agreement
C Other
v 2 Attachments
A Missing
B Not identified e
C Other
` -3 Exhibits
A Missing
B Not identified
C Other
4 Insurance Certificate(Proof Of Insurance)
A Not attached
B Not approved by City Attorn@y's Office
C Signed form notifying City Clerk that the department will be responsible for obtaining the
insurance certificate on this item(See form attached)
5 Wording On Request For Council Action(RCA)Unclear
A Recommended Action on RCA not complete
B Clarification needed on RCA
C Other
6 City Attorney Approval Required
7 Agreement Needs To Be Changed
A Page No.
G:ag a nd a/misc/rcaform