HomeMy WebLinkAbout09-23-19 City Commission Packet Materials - C8. Ord 2026 Final, Restricting Drought Reserve Funds in the Water Fund
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Kristin Donald, Finance Director
SUBJECT: Ordinance 2026 Final Adoption – Restricted Drought Reserve Funds
MEETING DATE: September 23, 2019
AGENDA ITEM: Action
RECOMMENDATION: Approve Ordinance 2026 Final Adoption – Restricting Drought
Reserve funds in the Water Fund.
BACKGROUND:
The City recently underwent a rate study that included water conservation rate examination, and
drought rate and reserve design. The rate study was presented and accepted by the Commission
April 15, 2019, and the recommendation was modeled in the FY20 budget. The Commission
adopted the rates on August 19, 2019, which included a $0.08 per HCF (hundred cubic feet) fee
for all users, to be restricted and used as a Drought Reserve.
This reserve would aid the utility during times of declared drought. In 2017, the City completed
its Drought Management Plan (DMP), outlining our vulnerability to drought, describing ways to
mitigate that vulnerability, and providing a drought response strategy. The DMP ultimately
recommended a 4-stage drought response plan with defined system-wide water reduction targets.
The key to a successful drought management financial plan is a balanced integration of drought
surcharge rates during a drought and the funding of a drought reserve with near term regular rate
increases before the drought occurs.
In order to accurately show this reserve in financial reports as restricted, we must have an
ordinance restricting these funds for its intended purposes of use during declared stages of
drought. For all funds of the City, spending of resources happen in the following order, (they are
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categorized according to Generally Accepted Accounting Principles (GAAP) for state and local
governments, with the following general definitions):
• Restricted - Amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government) through constitutional
provisions or by enabling legislation (an ordinance).
• Committed - Amounts constrained to specific purposes by the City Commission; to be
reported as committed, amounts cannot be used for any other purpose unless the City
Commission takes action to remove or change the constraint.
• Assigned - Amounts the City intends to use for a specific purpose; intent can be
expressed by the Commission or by an official or body to which the Commission
delegates the authority. The City Commission delegates this authority to the City
Manager.
• Unassigned - Amounts that are available for any purpose; these amounts are reported
only in the General Fund.
The public meeting for the first read of the ordinance was haled September 9, 2019. The
ordinance passed with a vote of five to zero.
ALTERNATIVES: As suggested by the Commission
FISCAL EFFECTS: This ordinance does not have a financial impact but does change the
presentation of the Drought Reserve fee the Water fund’s finical statements in the
Comprehensive Annual Financial Report (CAFR), to show the funds as restricted.
Attachment: Ordinance No. 2026
Report compiled on September 13, 2019
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Page 1 of 4
ORDINANCE NO. 2026
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA - PROVIDING THAT THE DROUGHT RESERVE CHARGES ARE
RESTRICTED FOR USE DURING DROUGHT DECLARED TIME FRAMES.
WHEREAS, the City Commission of the City of Bozeman, following notice and public
hearing established a new Rate Schedule for the City of Bozeman’s Water Fund that included a
drought reserve charge, and
WHEREAS, the Drought Reserve charge is intended to aid in funding the water utility
during time of declared drought.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF BOZEMAN, MONTANA:
Section 1
The amount of Drought Reserve fees collected in the Water Fund are to be restricted for
use during declared stages of drought.
Section 2
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions
of this ordinance are, and the same are hereby, repealed and all other provisions of the
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Ordinance 2026, Restricting Drought Reserve Funds in the Water Fund
Page 2 of 4
ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall
remain in full force and effect.
Section 3
Savings Provision.
This ordinance does not affect the rights and duties that matured, penalties that were
incurred or proceedings that were begun before the effective date of this ordinance. All other
provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full
force and effect.
Section 4
Severability.
That should any sentence, paragraph, subdivision, clause, phrase, or section of this
ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
the validity of this ordinance as a whole, or any part or provision thereof, other than the part so
decided to be invalid, illegal, or unconstitutional, and shall not affect the validity of the Bozeman
Municipal Code as a whole.
Section 5
Codification.
This Ordinance shall not be codified but shall be kept by the City Clerk.
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Ordinance 2026, Restricting Drought Reserve Funds in the Water Fund
Page 3 of 4
Section 6
Effective Date.
This ordinance shall be in full force and effect thirty (30) days after final adoption.
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Ordinance 2026, Restricting Drought Reserve Funds in the Water Fund
Page 4 of 4
PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman,
Montana, on first reading at a regular session held on the 9th day of September, 2019.
____________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
____________________________________
ROBIN CROUGH
City Clerk
FINALLY PASSED, ADOPTED, AND APPROVED by the City Commission of the
City of Bozeman, Montana on second reading at a regular session thereof held on the 23rd of
September, 2019. The effective date of this ordinance is October 23, 2019.
_________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
_________________________________
ROBIN CROUGH
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney
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