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The City of Pleasanton recognizes the importance of sound financial management of its <br />sewer system utility. Its goals include the operation of the utility on an enterprise basis, with <br />the maintenance of adequate reserves, and with financial provisions for funding future <br />replacement and expansion of the system. <br />The purpose of this policy is to set forth guidelines to achieve these goals. <br />SCOPE - This policy applies to all Sewer Utility funds. <br />POLICY - The City shall operate the Sewer Utility on an enterprise basis, whereby the costs of <br />service are borne entirely by the users. <br />The City shall maintain adequate reserves in the Sewer Maintenance and Operations (M&O) <br />Fund to meet cash flow requirements and contingencies. <br />The City shall perform a sewer rate study at least bi-annually which determines sewer rates <br />based on a cost of service analysis. <br />Sewer rates shall be set at a level to meet debt service requirements and to provide <br />adequate annual capital replacement accruals. <br />The City shall establish and maintain a separate Sewer Capital Improvement Fund and a <br />Sewer Capital Replacement Fund. <br />The Sewer Capital Improvement Fund shall be funded primarily by connection fees, and will <br />provide for future expansion of the sewer utility. <br />The Sewer Capital Replacement Fund shall be funded primarily by replacement accruals <br />charged to existing users through the sewer rate structure. <br />To construct replacement and expansion facilities, the City may utilize other financing <br />alternatives such as debt financing, and seek other funding sources such as development <br />exactions. <br />In addition to the specific financial policies stated above, the Sewer enterprise funds are <br />subject to the "Financial Policies of the City of Pleasanton'' which were adopted by <br />Resolution No. 90-131. <br />224 <br />