Ordinance 2017-16, if approved, will amend the current FY 2016-2017 Appropriations (Budget) Ordinance to formally authorize recommended adjustments to expenditures and operating transfers for the General Fund, Adequate Facilities Fund, Drug Fund, Post Employment Fund, Equipment Replacement Fund, Capital Projects Fund, and the Insurance Fund.

A budget amendment is legally required when the total actual expenditures for a fund are expected to exceed the original total appropriation for the fund. The reasons for these amendments are typically identified by staff during the course of the fiscal year and then the amendments are formally considered by the Board at the end of the fiscal year to ensure legal compliance. Often these amendments are needed to provide current year funding for capital projects and equipment that will be initiated or purchased in the new fiscal year beginning July 1. The amendment process requires staff to identify and certify that additional revenue sources in the current fiscal year are available to fund the new expenditures.

The recommended amendments are summarized below:

General Fund (110)

Additional revenues of $5,475,000 reflect positive revenue collections in the current year over original budgeted estimates.

Proposed expenditure amendments are as follows:

1. A special FY 2017 year-end appropriation transfer of $5,355,000 from the General Fund to the Capital Projects Fund funded through projected excess revenue collections in the current fiscal year to pay for certain proposed FY 2018 and beyond capital projects and equipment. (See attachment A for projects list.)  The projects include funding for the remainder of the upgrades and expansion of the City's radio communication system ($700,000 – page 45 of CIP),  funding for construction of Smith Park Maintenance Barn ($150,000 – page 105 of CIP), funding for Crockett Park Trails and Playground, ($115,000 – page 97 of CIP), funding for traffic signal upgrades ($160,000 - page 83 CIP), funding for Crockett/Green Hill Roundabout ($100,000 - page 65 CIP), funding for Mallory/Commerce Intersection ($75,000 - page 69 CIP), funding for Ragsdale/Split Log Intersection ($750,000 - page 75 CIP), funding for Sunset Phase 2 ($300,000 - page 81 CIP), Maryland Farms Greenway, ($300,000 - page 57 CIP), other trails and sidewalks (school connections ($150,000 - page 57 CIP), Parks Department Maintenance/Office Facility ($70,000 - page 25 CIP), Police Headquarters Needs Analysis ($200,000 - page 27 CIP), Library Audio Visual Equipment for Meeting Rooms ($80,000 - page 21 CIP) and unassigned future CIP projects ($2,205,000 CIP).
    
2. A special FY 2017 year-end transfer of $45,000 from the General Fund to the Equipment Replacement Fund for the FY 2018 purchase of a chipper machine for the Public Works Department ($45,000 - page 19 CIP).
    
3. An appropriation increase of $33,860 to the Fire and Rescue activity for incidentals and overtime paid to City of Brentwood firefighters that were deployed to East Tennessee for mutual aid emergency service operations and support for the fires in Pigeon Forge, Gatlinburg, and Flippers Bend.  Funding provided by FEMA reimbursement funds ($33,860).
    
4. An appropriation increase to the Public Works activity for $60,000, to cover the cost of storm cleanup following the March 1, 2017 tornado.
    
5. An appropriation increase in the Codes Department activity of $15,000 for increase in other professional services due to costs associated with temporary staffing due to a vacancy in the administrative secretary position and succession planning regarding the retirement of a part time employee.
    
6. An appropriation increase in the Community Relations activity of $38,000 for accrued terminal leave payments in FY 2017 for the prior Community Relations Director.      

The proposed total General Fund appropriation increase of $5,475,000 will leave a minimum projected General Fund unassigned fund balance as of June 30, 2017 of $32.1 million.  The fund balance will exceed the stated budget policy objective of maintaining a minimum of 40% in reserves for future needs and emergencies.  Please note it is likely that the final unrestricted fund balance will be higher because the exact amount will not be known until August 1, 2017 when the Hall Income Tax proceeds for FY 2017 are received from the State of Tennessee.


Adequate Facilities Fund (124)

An appropriation increase of $2,000,000 from the Adequate Facilities Fund to fund the approved contribution to Williamson County Schools for the  BHS/BMS expansion project.

Drug Fund (126)

An increase in the appropriation for this fund by $100,000 is proposed for the initial payments related to  the purchase of Records Management Software for the Police Department with funding provided through extra revenue received through drug enforcement activities.  This purchase was approved at the May 22, 2017 City Commission meeting. Progress payments are expected to start in FY 2017 and finish after completion of installation in FY 2018.  Funding for the expenditure will be provided through the restricted Federal Forfeited Property fund balance.  (Current balance as of May 2017 is $488,422.)

Post Employment Benefits Fund (127)

Increasing the appropriation for this fund by $38,000 for the transfer to the General Fund for reimbursement of accrued terminal leave payments for the prior Community Relations Director in FY 2017 as referenced above.

Debt Service Fund (211)

Increasing the revenue proceeds for the Debt Service Fund by $3,078,635 associated with the issuance of the 2016 G.O. Refunding Bonds. This represents the proceeds received that will be used to pay off the callable portions of the Series 2006 G.O. Refunding Bonds.  The refunding produced estimated net present value savings of $321,653.  In a separate transaction, remaining outstanding bonds from the 2006 G.O. Series were prepaid using cash reserves in the Debt Service fund equal to $1,546,000.  The prepayment resulted in an estimated net present value savings of $163,615.

Increasing the expenditure appropriation of the Debt Service Fund by $4,624,635 associated with the 2016 G.O Refunding Bonds for payment to the bond trustee, underwriter discount and issuance costs (3,078,635) and the prepayment of the remaining outstanding 2006 bonds (1,546,000).


Equipment Replacement Fund (310)

Additional revenue of $45,000 reflects the special year-end appropriation transfer from the General Fund as referenced above.


Capital Projects Fund (311)

Additional revenue of $5,355,000 reflects the special year-end appropriation transfers from the General Fund as referenced above.


Insurance Fund (320)

Additional revenue of $482,480 reflects stop loss (reinsurance) amounts received for payments of individual medical claims above the stop loss base amount of $70,000 ($341,335) and prescription drug rebates from Blue Cross ($141,145).   Note that additional stop loss payments and prescription drug rebates may be received for claims incurred prior to June 30, 2017. 

An increase in the appropriation of this fund by $482,480 will cover potential medical claims  that may exceed the budgeted estimate for FY 2017.  The increased appropriation also includes a contingency amount for any unknown medical situations that may arise prior to June 30, 2017.  Funding will be provided through the payments received from our stop loss carrier and prescription rebates as referenced above.   The health insurance division of the Insurance Fund is projected to show a healthy fund balance of approximately $1.5 million  at June 30, 2017.

SUMMARY

The recommended budget appropriations amendments are primarily bookkeeping in nature to meet the legal requirements for compliance with annual budget appropriations. Whenever possible, budget amendments for the current fiscal year should be carried out before the end of the fiscal year and prior to the beginning of the independent audit for FY 2017.

Should the City Commission have any questions concerning this information, please contact the Finance Director or City Treasurer.