REPORT TO THE CITY COUNCIL FROM: BROCK D. BUCHE, PE, PLS, Director Department of Public Utilities SUBJECT ..Title ***RESOLUTION - Adopt the 51st Amendment to the Annual Appropriation Resolution No. 2023-185 appropriating $878,500 for the Water Connection Charge Fund for completion of water system connection projects. (Requires 5 Affirmative Votes) (Subject to Mayor's Veto) (Citywide). ..Body RECOMMENDATION Staff recommends that the City Council adopt the 51st Amendment to the Annual Appropriation Resolution (AAR) No. 2023-185 to appropriate an additional $878,500 for the Water Connection Charge Fund to provide for completion of water system connection projects. EXECUTIVE SUMMARY Approval of the AAR will appropriate $878,500 for the Water Connection Charge Fund to receive and disburse fees for the construction of infrastructure to connect properties to the potable water system. Funds have exceeded previous estimates due to increased development activity. The additional funding of $878,500 for a total of $2.6 million in appropriations is needed to complete potable water system connections throughout the City of Fresno (City) for fiscal year 2024 (FY24). BACKGROUND The Water Connection Charge Fund, codified in the Fresno Municipal Code, receives revenue obtained from transmission grid main charges, frontage charges, and service connection charges that are expended for acquisition, construction, and reconstruction of the City's potable water system. During the preparation of the FY24 budget, requested appropriations of $1,749,000 were based on taking an average of prior year expenditures and adding in a percentage for anticipated growth. This request was subsequently approved by the City Council as part of the adoption of the FY24 budget. During the fiscal year, expenditures for installing services have exceeded the budgeted amount and are expected to continue at the current rate. This is due to higher than anticipated development activity. Therefore, it is requested that additional funding from retained earnings totaling $878,500 be appropriated for project charges that have already been incurred but have yet to be posted and an estimate for additional projects that will be completed before the end of the fiscal year. This funding is from developers and other customers who have previously paid connection fees which were deposited in this fund. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this item does not qualify as a "project" and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference was not implemented because this action does not include a bid, an award of a construction contract, or approval of a services contract. FISCAL IMPACT This action will not have any impact on the General Fund or the Water Enterprise Fund. The projects in the Water Connection Charge Fund are all fully funded through water connection fees paid by developers and other customers. Attachment - 51st Amendment to the Annual Appropriation Resolution No. 2023-185