The unanimous vote, according to a City Council agenda report, allowed staff members to:
Establish a Water System Acquisition Reserve Fund and fund the reserve with a transfer of $300,000 of the available surplus.
Transfer more than $500,300 of the surplus to the Operating and Environmental Emergency Reserve, bringing the balance to more than $6.1 million.
Transfer $334,000 to the Maintenance of Operations Reserve, bringing the balance to $834,000.
Transfer $334,000 to the Equipment and Facility Revolving Reserve, bringing the balance to more than $755,200.
Made an additional payment of $334,000 during the 2012-13 year to the California Public Employees' Retirement System (CalPERS) to pay down unfunded liability.
The budget surplus, according to the report, was from additional revenues and cost savings including property taxes exceeding budgetary amounts by about $160,000.
Sales tax revenues during 2011-12 exceeded the conservative budget by about $656,000, according to the report. They came from an automobile sales rebound and the addition of restaurants.
Other increases were in the Transient Occupancy Tax, by about $126,000, and engineering and building permits by about $138,000 from the Claremont Colleges development activity.
Cost savings came from Risk Management insurance costs staying relatively flat in 2011-12 with a savings of about $641,000 from budgeted amounts and other savings.
Councilman Corey Calaycay said the city must be cautious despite its success.
"We still have to use caution and we can't look forward to a $1.8 million surplus (every year) just because we had that success this year. It depends on ongoing economic development."
Councilman Sam Pedroza added that the $300,000 going toward water acquisition fund to try to purchase Golden State Water Co.'s Claremont assets "shows we're serious about this."
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