| | | | | | | | Agenda Item - 4.a.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Patricia Song
| | Dept.: | General Manager
| Dept.: | Finance
| | Subject: | Adoption of Resolutions amending the Garden Grove Sanitary District budget and setting the appropriations limit for for Fiscal Year 2022-23. (Action Item) | Date: | 6/28/2022 |
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| | | | | | | | OBJECTIVE
For the Garden Grove Sanitary District (the District) Board to adopt resolutions amending its adopted biennial budget for Fiscal Year (FY) 2022-23, setting the appropriations limits and re-appropriating appropriation balances for certain projects and encumbered purchase orders for the same year. |
| | | | | | | | BACKGROUND
On June 22, 2021, the District Board approved a biennial budget for fiscal years 2021-22 and 2022-23. As new revenue sources and expenditure needs have changed, it is necessary to perform a mid-cycle review and amend the second year, FY 2022-23 budget for various funds and projects to better align available resources with operational needs. |
| | | | | | | | DISCUSSION
The amended budget for the District for FY 2022-23 totals $19.1 million. Sewer services account for $16.5 million of the total budget. This is an increase of $2.7 million from the adopted biennial budget. The increase is primarily attributable to various capital improvement projects for lift stations and sewer main.
The Refuse services account for $2.6 million of the total District-wide budget for FY2022-23, representing a slight increase of $127,340 to cover anticipated increase in labor costs and certain mandate cost.
The amended budget will allow the District continue to operate in accordance with its established Business Principles:
- Enterprise fund should break even, not operate in a deficit.
- In order to operate efficiently, a two-month cash flow is required, as well as maintenance of $500,000 in reserves for contingencies.
- Establish uniform service throughout the District.
- Develop a replacement sinking fund. Ideal amount of fund should approach 5% of system replacement value.
- Improve system and facilities up to industry standards by adequately funding new Capital Improvement Programs.
- Satisfy debt covenant conditions under which outstanding District debt was issued.
- Implement a 10-year financial plan.
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| | | | | | | | FINANCIAL IMPACT
The proposed budget amendment will allow for the District to continue provide quality services to the community and adhere to the District’s Business Principles. |
| | | | | | | | RECOMMENDATION
It is recommended that the Garden Grove Sanitary District Board adopt the following resolutions:
- Resolution of the Garden Grove Sanitary District Amending the Adopted Biennial Budget for Fiscal Year 2022-23;
- Resolution Setting the Garden Grove Sanitary District Fiscal Year 2022-23 Appropriations Limit; and
- Resolution Reappropriating Certain Fiscal Year 2021-22 Project Balances and Encumbrances for Fiscal Year 2022-23.
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