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Approve Agreements for AMI Project Implementation <br />November 17, 2020 <br />Page 5 <br />developed a multi -year financial forecasting model for the City's Water Enterprise. No additional <br />rate revenue is being proposed or pursued at this time. Staff will explore additional funding options <br />such as the issuance of bonds or low interest loans from the Drinking Water State Revolving Fund <br />to ensure that adequate reserve funds derived from customer revenue are available. <br />ENVIRONMENTAL IMPACT <br />In accordance with the California Environmental Quality Act Exemption 15301(b), the proposed <br />project is exempt from further review. Categorical Exemption ER No. 2018-88 is on file for this <br />project. <br />FISCAL IMPACT <br />The City has received grant funding in the amount of $4 million from the State Natural Resources <br />Agency and funds are budgeted and available for expenditure. A maximum of $1,099,080 of State <br />grant funds were allocated to the recent customer service and billing system software upgrade <br />approved in a separate City Council Action on February 18, 2020. The remaining grant funds of <br />$2,900,920 are available to fund the action items included in this request. The City has received <br />awards totaling $1.5 million from the Federal Bureau of Reclamation for the AMI Project. These <br />grant funds will be recognized and appropriated for expenditure in Fiscal Year 2021-22. <br />Funds for the estimated project expenditures of $1,967,984 in FY 2020-21 are budgeted and <br />available in the accounts listed below. Funding for the subsequent four years will be budgeted in <br />future fiscal years as shown in the table below. <br />Although the Water Enterprise had an accumulated fund balance of approximately $47 million at <br />June 30, 2020 (unaudited), there is a series of water infrastructure projects planned that would <br />spend down the accumulated fund balance over the next several years to maintain a target reserve <br />level in the Water Enterprise, as outlined in the 2019 Water, Recycled Water and Sewer Rate Study <br />Report presented to City Council on November 19, 2019. Therefore, staff recommends the pursuit <br />of financing to fund the AMI project. As noted above, the rate structure already approved by City <br />Council is sufficient to pay debt service on such financing. If City Council approves <br />recommendation #6, staff plans to obtain financing by the end of calendar year 2021, which will <br />require further approval from City Council. <br />Accounting <br />Fiscal <br />Unit - Account <br />Fund <br />Accounting Unit - Account <br />Amount <br />Year <br />No. <br />Description <br />No. Description <br />(Project No.) <br />06617647-66301 <br />Acquisition & <br />Water Utility Capital Projects- <br />$800,072 <br />16-6460 <br />Construction <br />Water Capital Project <br />FY <br />2020-21 <br />06017645-62300 <br />Water Administration & <br />(16-6460) <br />Water <br />Engineering, Contract <br />$167,912 <br />Services -Professional <br />25H-5 <br />