HomeMy WebLinkAboutReso 98-072 - Adopting Council Policy No. 1408 - Rate Protection and Investment Fund for the Solid Waste Utility . ' * • •
R�SOLUTION NO. 98- 7�-
A RESOLiJTION OF THE CITY COUNCIL OF THE CITY
OF REDDING ADOPTING COUNCIL POLICY NO.
1408—RA TE PROTECTIDN AND INVESTMENT FUND
FOR THE SOLID WASTE UTILITY.
WHEREAS, the City Council is charged with the responsibility of establishing municipal
policies to guide the various functions of the City and, where necessary, to establish procedures by
which functions are performed; and
WHEREAS, the Solid Waste Utility ("Utility") operates collection routes, recycling
programs, a household hazardous waste facility, and landfills; and
WHEREAS, from time-to-time it is necessary for the Utility to make major capital
investments for building maintenance, automation, increased customer service, debt reduction, or
to carry out new government mandates; and
WHEREAS, the Utility needs a mechanism whereby it can save funds to make major
purchases and reduce debt in order to stabilize rates;
THEREFORE, IT IS RESOLVED that the City Council adopts Council Policy No. 1408
entitled Rate Protection and Investment Fund for the Solid Waste Utility, a copy of which is
attached and made a part hereof, to be incorporated in the Council Policy Manual.
I HEREBY CERTIFY that the foregoing resolution was introduced, read and adopted at a
regular meeting of the City Council on the 19th day of May , 1998, by the following vote:
AYES: COiJNCII,MEMBERS: Anderson, Cibula, Kight, McGeorge and Kehoe
NOES: COiJNCIL MEMBERS: None
ABSENT: COiJNCIL MEMBERS: None
ABSTAIN: COiJNCII.MEMBERS: None
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.
DAVID A KEHOE, Mayor �
Attes�: Form Approved:
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��� �, - �r�z � i c�
Connie �t ohmayer, lerk W. Leonard Wingate,� ' Attorney �
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v CITY OF RCDDING, CAL[FORNIA
' COUNCIL POLICY
SUB.ICCT RI:SOLU"1�ION POLICY EFFECTIVE PAGE
�UM[3f_;It NUMBER DA-I�G
RATE PROTECTION AND INVESTMENT FUND qs- �408 / /9g � oP�
FOR T[-IC SOLID WASTE UTILITY
[3AC1<GROUND
The Solid Waste Utility operates col(ection routes, recycling pro;rams, a household hazardous waste facility, and
land�fills. From time to time, it is necessary to make major capital investments for building maintenance.
automation, increased c�istomer service, debt reduction, or to carry out new government mandates.
To accomplish its mission. the utility needs a �Tlechanism �vhereby the utility can save funds to make major
purchases and to reduce debt in order to stabilize rates. In other words, stabilize rates for the customer, yet be
able to change with the commlinity and mal<e major investments that wi11 reduce the upward pressure on rates.
The rate of investment needed for capita( improvei��ents, automation, improved technoloy�y, or earl_y payoff of
debt requires a lon�er lead time if the utility is to minimize new or additional debt. While the utility will never
operate on a pay-as-you-�o basis, it does have the ability to reduce total debt with good business plannin� and
savin�rs.
PURPOSE
The purpose of the policy is to create a f�ind whereby the utility can set aside tunds to be used as follows:
• Invest in automation.
• Make major repairs to buildings and machinery.
• Reduce debt.
• Stabilize rates.
• Enhance the ability of the City to provide competitive solid waste collection rates.
• Acquire property or equipment for solid waste operations.
This fund shall not�be used for landfill operations or closure, nor shall it be used for normal truck or vehicle
replacements, which are covered by separate funds. T'he goal of the fund is to reduce long-term debt, to make
investments, protect assets, and to invest in automation and new technolo�,�y that will allow a more cost-efticient
operation while maintainin� reasonable customer service and complying with State mandates.
POLICY
There is hereby established a Rate Protection and Investment Fund for the Solid Waste Utility. Proceeds from
the fund sl�ail be used for the follow�in<�:
• Property acquisitions.
• t""h
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t CITY OF RGDDING, CALIFORNIA
- COUNCIL POLICY
SUBJECT RESOLUT(ON POL[CY EFFECTIVE PAGE
NUMBER NUMBER DATE
RATE PROTECT(ON AND INVESTMEN"f FUND
FOR THE SOLID WASTE UTILfTY 93-_ 1�108 _/_/98 ? of2
• Major buildin�� repairs, additions, or renovations.
• Early debt payoff.
• Investil�enC i►1 automation.
• Fundin� to implement new la�vs or mandates that would effect operatin� proced�ires and costs.
To minimize the upward pressure on rates or increased debt as the items above are needed, it is the policy of the
City of Reddin`�to ptit money into the Rate Protection and Investment Fund in order to save money for planned
investment or early debt payoff. Funds that can be placed in the fund include the following:
• Bond fiinds restricted for capital purchases or not restricted.
• Savin�s that accrue durinQ the year.
• Any rebates tlle utility receives.
• Proceeds from the sale of surplus property or equipment owned by the utility.
• Grant proceeds that can be used only for planned improvements.
At the beginning of each budbet year, the Solid Waste Utility will estimate if it has any excess revenue or
unobligated funds over and above costs needed for its annual operation and a 10% operating reserve. If such
funds exist, they will be placed in this Rate Protection and Investment Fund. Any interest earned on money in
the fund sl�all be applied to the tiind balance.
Each year, as part of its budaet submittal, the Solid Waste Utility will submit a 10-year business plan for use of
proceeds from this fund. Any proposed revenues or expenditures shall be included in the department's annual
bud�et. The business plan will be a component of the department's 10-year tinancial plan.
c:ACOUNCIL\CouncilPolicvSWRateProtection&InvestmentFund