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Home My WebLink AboutStaff Report 6.A 06/20/2005CITY OF PETALUMA, CALIFORNIA 6.A AGENDA BILL June-M,2M Agenda Title: Meeting Date: Ordinance Amending Ordinance No 2205 N.C.S., To Change June 20, 2005 Certain Appropriations for the Operations of the City of Petaluma from July 1, 2004 through June 30, 2005 Meeting Time: ® 3:00 PM ❑ 7:00 PM Category (check one): ❑ Consent Calendar ® Public Hearing ❑ New Business ❑ Unfinished Business ❑ Presentation Department: I Director: Contact Person: Phone Number: Administrative Services Steven Carmichael Cinde Rubaloff 707-778-4357 Cost of Proposal: Account Number: $1,287,200 Various Amount Budgeted: Name of Fund: Not Applicable Various Exhibits to Agenda Packet Item: Ordinance providing for a change in appropriations Exhibit A, City of Petaluma, CA 04-05 Final Budget Adjustment detail Summary Statement: The City reviews its budget on a continual basis, but historically makes recommendations for changes at mid -year. Major changes in the appropriations and revenues were approved at mid -year by Ordinance No 2205. After eleven months of operations, it has become apparent that certain actual expenditures will exceed appropriations as follows: General Fund Special Revenue Funds CII' Funds Debt Service Fund Enterprise Fund Internal Service Fund TOTAL increase in appropriation $1,147,000 1,798,000 1,790,000 - 32,800 91,000 1,293,000 $6.086200 net change in revenue estimate $1,147,000 1,667,000 1,755,000 0 0 230,000 $4.799.000 use of fund balance/net assets 0 131,000 35,000 -32,800 91,000 1.063.000 $1.287.200 Net change in 04-05 annual budget additional use of fund balance/net assets of $1,287,200. The customary process, to meet the terms and conditions of the City's Charter and to avoid an auditor's management comment, is to adopt the final adjustments to the annual budget after eleven months of activity, when total expenditures for the fiscal year can be estimated. Any estimated variances will be eliminated with this final budget ordinance. Recommended Citv Council Action/Suggested Motion: Adopt Ordinance No N.C.S., amending Ordinance No 2205 N.C.S., appropriating additional funds for the remainder of fiscal year 2004-2005, and declaring an urgency so that this adjustment can take effect immediately. Reviewed by Admin Svc O /J Reviewed ® - wtev: ApnK ni ad (�¢&bv City Manager: ate:. �� Date: p �bvlu�LEt� Todav's Date: Revision # avised: File Code: 4 s:\accountant\cinde\word\citydocs\claims-bills CITY OF PETALUMA, CALIFORNIA June 20, 2005 AGENDA REPORT FOR ORDINANCE AMENDING ORDINANCE NO 2205 N.C.S., TO CHANGE CERTAIN APPROPRIATIONS FOR THE OPERATIONS OF THE CITY OF PETALUMA, FROM JULY 1, 2004 THROUGH JUNE 30, 2005, AND DECLARING AN URGENCY. It is recommended that the City's appropriations for the fiscal year 2004-2005 be increased by $2,272,000 to account for actual expenditures for FY 04-05. Based upon a review of actual expenditures for the eleven preceding months, annualized for twelve months, vs. fiscal year appropriations, it has been determined that the following appropriations must be increased (net of changes in revenue): General Fund: City Clerk $12,000 Animal Services $48,000 Parking Enforcement $12,000 Fire Department $500,000 Community Development $500,000 Parks and Recreation $75,000 TOTAL $1,147,000 These departments are exceeding their budgets for salary, services and supplies. This amount will be covered by unanticipated increase of $679,800 in the General Fund Motor Vehicle License Fee revenue over estimated amount. Additionally, Community Development Department's increased appropriation will be offset by an increase in estimated building permit revenue of $500,000. General Fund will have a reduction in revenue from the elimination of the intragovermental charge to Debt Service Fund. Special Revenue Funds: Home/Begin $196,000 Haz Mat Fines $16,000 Donations $1,755,000 Landscape Assessment Districts $101,000 Gas Tax -$300,000 Abandoned Vehicle Abatement $30,000 $1,798,000 The Home/Begin Fund requires an increase in appropriations of $196,000, which will be offset by an increase in estimated revenue of $196,000. Haz Mat Fines Fund requires an increase in appropriations of $16,000, which will be offset by an increase in estimated revenue of $16,000. Donations Fund requires adjustment to account for property donation at fair value at date of donation. This amount will then be transferred to the Fire CIP Fund. Gas Tax revenue is lower than anticipated, so the transfer out to Street Maintenance Fund will be reduced by $300,000. LADS have exceeded 04-05 budget appropriations. This amount will be covered by unreserved fund balance in other LAD fiords. AVA FLmd will transfer $30,000 to the Equip/Vehicle n Replacement Fund for the purchase of a CSO vehicle during 04-05. C;L Other Governmental Funds: Community Development CIP $35,000 Fire CIP $1,755,000 Debt Service Fund -$32,800 $1,757,200 Library renovation CIP project has exceeded budget by $35,000. Fire CIP budget requires adjustment for transfer in from Donation Fund and "purchase" of donated property at fair value on date of donation. Debt Service Fund was budgeted to provide $32,800 in intragovernmental charge revenue to the General Fund during 04-05, but the City Debt Fund ceased to function during 03-04 when the City debt was retired. Enterprise Fund: Airport $91,000 Original Airport budget did not include correct expense for debt service interest related to the 2003 COP. Internal Service Funds: Information Technology $73,000 Worker's Compensation $200,000 EquipNehicle Replacement $1.020,000 $1,293,000 Information Technology equipment purchases are greater than the original budgeted amount. This is due to equipment failures, which required unanticipated replacement. The Worker's Compensation Fund will pay out approximately $200,000 more in claims then originally budgeted. The increase in this appropriation will be offset with an increase in estimated revenue of $200,000. EquipNehicle Replacement Fund purchased more vehicles than originally budgeted. Additionally the appropriation is being increased to include the CSO vehicle to be purchase with funds transferred from the AVA Fund. All the other increases in 04-05 appropriations will be covered by unrestricted net assets in the respective funds. 2. BACKGROUND: The City reviews it budget on a continual basis through out the fiscal year. The Administrative Service Director makes recommendations for changes at mid -year. Major changes in appropriations and revenues for 04-05 were approved by Council by Ordinance No 2205, dated May 18, 2005. After eleven months of operation, it is standard procedure for the Finance Department staff to review approved appropriations compared to actual, annualized expenditures. Any identified expenditure in excess of budget is researched for proper posting, clarification and approval. Once this is accomplished, a request for an increase in appropriation is requested. This procedure is completed to avoid an auditor's management comment regarding budget to actual activity in the City's amoral audit, and to meet the legal requirement of the City's Charter. The original appropriations limit, approved by Ordinance 2188 was $146,584,700. This limit was increased by $3,489,700 as Amendment No 1 by Ordinance No. 2205. At close of 04-05, it is recommended that a final appropriation adjustment, net of changes in estimated revenue of $1 287,200 be approved See Exhibit A for the details of the recommended increases. 2 3. ALTERNATIVES: The City Council could decide to not approve the recommended adjustment. This would result in the City being out of compliance with the City Charter. Additionally, this would produce variances in the "budget to actual section" of the City's Comprehensive Annual Financial Report. Finally, this would result in a management letter comment from the City's external auditors. 4. FINANCIAL IMPACTS: The financial impacts, by fund, are provided in the Executive Summary above, and total the net amount of $1,287,200. All increases in appropriations are covered by unanticipated increases in revenue, or by existing fund balances/net assets. Finance staff utilizes conservative estimates for forecasting revenues and a liberal approach when projecting expenditures. The projections are just estimates, and unanticipated changes occur. Budget augmentation is a standard practice to adjust for changes in the economy, additions of projects, or other unforeseen changes in financial forecasts. 5. CONCLUSION: The City should continue to monitor revenues and expenditures on a continual basis throughout the fiscal year. Each January, a review should be completed to recommend revisions for major adjustments in operating budgets. Then in June of each year, a final review should be completed, with recommendation for any final appropriation revision required prior to year end. 6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL INDENTIFY SUCCESS OR COMPLETION: Attempt to budget sufficient appropriations at beginning of fiscal year to avoid major adjustments at mid -year and year end. Avoid auditor management comment related to variance between budgeted and actual expenditures. 7. RECOMMENDATION: Adopt the Amending Ordinance utilizing the "urgency" method so that these expenditures can tak effect immediately. ORDINANCE NO. Introduced by Council member Seconded AN ORDINANCE AMENDING ORDINANCE NO. 2205 N.C.S., TO CHANGE CERTAIN APPROPRIATIONS FOR THE OPERATION OF THE CITY OF PETALUMA FROM JULY 1, 2004 THROUGH JUNE 30, 2005, AND DECLARING AN URGENCY BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS: Section 1. Ordinance No. 2205 N.C.S. is hereby amended, for the fiscal year beginning July 1, 2004 through June 30, 2005, in the amounts established in the Exhibit A, and the amended budget incorporated herein by reference, and distributed to the various funds as stated in Exhibit A, and shall be expended and used in accordance therewith. Section 2. The City Council hereby finds and determines that the amount of appropriations provided hereby does not exceed the estimated revenue, other sources, and available fund balances, in the amounts set in Exhibit A, which will be on file with the City Clerk for the fiscal year ending June 30, 2005. Section 3 All ordinances, or parts of ordinances, in conflict herewith, are hereby repealed. Section 4 The City Clerk is hereby directed to post/publish this ordinance, for the period ,and in the manner required by the City Charter. INTRODUCED, ADOPTED AND ORDERED posted/published this _day of _, 2005, by the following vote: 15 filenvme is\uccwnwtOnnde\excel\hud�at\6.L05\ye6udget MlIBIT A CITY OF PETALMIA. CA 04-05 FINAL BUDGET ADJUSTMENT e INCREASE IN INCREASE IN DEPT ACCOUNT APPROPRIATION AMOUNT REVENUE ESTIMATE AMOUNT City Clerk Salary 12,000 1210 51110 Animal Services Supplies 48,000 3010 53020 Parking Enforcement Professional Svc 12,000 3040 54110 Fire Department Overtime 500,000 5040 51210 Parks and Rec Part-time Salary 75,000 7151 51120 60,000 7113 51120 15,000 Community Development Consulting Services 500,000 Fee -Plan Check 500,000 6000 54140 42524 Front Debt Service Fund Charge for Inkagovem Svc (32,800) 1000 45020 Iv1VL Fees 679,800 44260 Total General Fund 1,147,000 1.147.000 INCREASEIN INCREASE IN FUND ACCOUNT APPROPRIATION Ah1OUNT REVENUE ESTIMATE AMOUNT Home/Begin Programs Costs 196,000 Federal Grants 196,000 2120 54130 44310 Landscape Assess Districts Nater 101,000 2521 56240 3,000 2524 56240 3,000 2526 56240 2,000 2527 56240 3.000 2529 56240 3.000 2531 56240 21000 2532 56240 3,000 2533 56240 7,000 2536 56240 2,000 2537 56240 2,000 2538 56240 9,000 2542 56240 17.000 2543 56240 2,000 2546 56240 36,000 2547 56240 2.000 2552 56240 2,000 2556 56240 3,000 e filename ts�mcnnntant\cede\excel\budeeDOl-OS\ye6udgel EXHIBIT A CITY OF PETALUhIA, CA 04-05 FINAL BUDGET ADJUSTMENT q— INCREASE IN INCREASE IN FUND ACCOUNT APPROPRIATION AMOUNT' REVENUE ESTIMATE AMOUNT IIaz Met Pines Supplies 16,000 Pines 16,000 2660 53010 42710 Gas Tax to Street Maintenance Transfer out (300,000) 2410 69910 Street Maintenance from Gas Tax Transfer in (300,000) 2630 49910 Donation 4300020/Donations 1,755,000 2670 48040 Donation to Fire CIP Transfer out 1,755,000 2670 69910 Abandoned Veit Abate to Veit Replace Transfer out 30,000 2610 69910 Comm Develop CIP c200103/Construction 35,000 3200 5.1150 Fire CIP from Donation Transfer in 1,755,000 3600 49910 Fire CIP Land 1,755,000 3600 62110 City Debt Sen•ice to General Fund Intrugovem Charge (325800) 4410 55010 Airport Debt Interest 91,000 3296 57120 Information Technology Equipment 73,000 3330 61010 Equip/Vehicle Replacement Vehicles 1.295,000 3350 62220 EguipfVehdcle Replace Gen AVA Transfer in 30,000 7300 49910 Worker's Compensation Claims 200,000 Intruguvem Charges 200,000 3361 56430 45020 q—