HomeMy WebLinkAbout07. Review draft Position Paper to authorize additional funds in the amount of $500,000 from the Sewer Construction Fund for the Development Sewerage Project, District Project 8420 70
Central San
� � -- .y� BOARD OF DIRECTORS nD
_X POSITION PAPER
Board Meeting Date: April 6, 2017
subiect: AUTHORIZE ADDITIONAL BUDGET IN THE AMOUNT OF $5009000
FROM THE SEWER CONSTRUCTION FUND FOR THE DEVELOPMENT
SEWERAGE PROJECT, DISTRICT PROJECT 8420
Submitted By: Initiating D6pt./Div.:
Stephanie Gronlund, Associate Engineer Engineering and Technical Services/
Planning & Development Services
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
T. Godsey—Senior Engineer
D. Gemmell— Planning & Development Services Division Manager Roger S. Bailey
E. Lopez— Capital Projects Division Manager General Manager
T. Vassallo — Finance Manager
ISSUE: Board of Directors' approval is required to budget projects or transfer funds
from the Sewer Construction Fund.
BACKGROUND: Central San requires property owners to pay for main sewers needed
to serve their properties. Although these privately-financed sewers are designed and
installed by developers or other private parties, Central San is involved in the planning,
plan review, right-of-way, inspection, job acceptance, and record drawing/mapping
effort to ensure contributed sewers and private site collectors meet Central San's
Standard Specifications for Design and Construction. These labor activities are
capitalized under the Development Sewerage Project, District Project 8420 (Project),
and the revenue collected for plan review, right-of-way, and inspection are credited to
the Sewer Construction Fund, which offsets the expenditures made under this capital
project. In addition, due to the increase in development activities, the labor charged to
the Project would offset the expenditure that would normally be paid for by the
operating budget. The revenue credited by the developer fees and operating budget
savings allows for the Project to have additional budget with minimal impacts, if any, to
the Sewer Construction Fund balance.
ALTERNATIVESMONSIDERATIONS: A financial alternative would be to transfer the
funds from other active Capital Improvement Budget (CIB) projects, which is not
recommended since it may result in budget overruns or delayed projects. Another
alternative would be to partially fund the Project when closeouts are done by the end of
June 2017, which is not recommended because of timing, and the preliminary total
closeouts estimate is currently at $120,000.
FINANCIAL IMPACTS: The adopted Fiscal Year (FY) 2016-17 CIB included an
estimated $800,000 of expenditures budgeted for the Project. As of January 31, 20175
this project has expended $703,311 , which leaves a remaining balance of $96,689. Due
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POSITION PAPER
Board Meeting Date: April 6, 2017
Subject: AUTHORIZE ADDITIONAL BUDGET IN THE AMOUNT OF $500,000
FROM THE SEWER CONSTRUCTION FUND FOR THE DEVELOPMENT
SEWERAGE PROJECT, DISTRICT PROJECT 8420
to the increase of development activities, staff estimates the current FY expenditures
will total $1,300,000.
There is no remaining CIB contingency, therefore, an additional budget approval in the
amount of $500,000 is being requested from the Sewer Construction Fund to continue
the Project for the remainder of the FY. There are adequate funds available in the
Sewer Construction Fund due to the budget offsets stated above.
COMMITTEE RECOMMENDATION: The Engineering and Operations Committee
reviewed this subject at the meeting on March 17, 2017, and recommended approval of
the additional budget for the Project.
RECOMMENDED BOARD ACTION: Authorize the General Manager to add $500,000
to the Development Sewerage Project, District Project 8420, from the Sewer
Construction Fund.
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