REPORT TO THE CITY COUNCIL
February 26, 2015
FROM: LEE BRAND AND CLINTON OLIVIER, Councilmembers
City Council Offices
SUBJECT
Title
*** RESOLUTION - Adopting the Enterprise Accountability and Oversight Act
Body
Background
Historically, financial oversight of Enterprise Departments has not been scrutinized as closely as General Fund departments. A lack of proper oversight and cost controls can lead to over-budget and late capital projects.
Salient policies included in the Act include the following:
ENTERPRISE REVENUE BOND CONVENANTS
This Act will require the City, through its Bond Counsel and underwriters to include specific covenants in the bond issuance that specifically identify the capital projects to be completed and financed by the bond funds.
APPLICATION OF UNUSED FUNDS
In the event an approved Enterprise Capital Project finishes under budget, at the conclusion of the project, the City shall deposit those funds into a dedicated reserve efficiency and savings fund. At the end of a period established by the Director of Public Utilities, with the approval of the City Manager, funds accumulated in this reserve that are not used for capital improvements, will be used to reduce future rates.
APPLICATION OF FUTURE CAPITAL PROJECT FUNDING
In the event an approved long-term Enterprise Capital Project receives additional funding including, but not limited to, State and Federal grant funds, below market interest rate loans or any other subsidy that can be legally applied to the approved Enterprise Capital Project, then the City shall re-evaluate the rate structure and consider appropriate and legal rate reductions based upon a comprehensive financial and legal review.
AUTHORITY TO SPEND FUNDS
This Act shall require identification of specific Enterprise Capital items in excess of $1 million before funds can be expended. Prior to expending funds, the Department of Public Utilities (DPU) director shall submit a line it...
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