Ordinance 2023-09, if approved, will amend the current FY 2022-2023 Appropriations (Budget) Ordinance to formally authorize recommended adjustments to revenues, expenditures, and operating transfers for the General Fund, Post-Employment Benefits Fund, Equipment Replacement Fund, Capital Projects Fund, Facilities Maintenance Fund, Water and Sewer Fund, Municipal Center Fund, and Emergency Communications District 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 fiscal year and then the amendments are formally considered by the City Commission 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 $15,885,000 reflect positive revenue collections in the current year over original budgeted estimates. This includes additional revenue appropriations of:
- Local Sales Tax - $11,200,000
- State Shared Sales Tax - $1,100,000
- Business Tax - $650,000
- Hotel/Motel Tax - $300,000
- Wholesale Liquor Tax - $850,000
- Wholesale Beer Tax - $70,000
- Interest Income - $1,396,020
- Transfers from Post Employment Benefits Fund - $168,980
- Insurance Recovery - $150,000
Proposed expenditure amendments are as follows:
- A special FY 2023 year-end appropriation transfer of $11,375,000 from the General Fund to the Capital Projects Fund to pay for certain proposed FY 2024 and beyond capital projects and equipment. (See attachment A for projects list.)
- A special FY 2023 year-end transfer of $1,165,000 from the General Fund to the Equipment Replacement Fund for the FY 2024 purchases of equipment. (See attachment A for equipment list.)
- A special FY 2023 year-end transfer of $640,000 from the General Fund to the Facilities Maintenance Fund for FY 2024 repairs to the Service Center Fuel Tanks, Primm Park Boiling Spring Academy, and future projects as needed.
- A special FY 2023 year-end transfer of $2,023,230 from the General Fund to Municipal Center Fund for planned FY 2024 renovations and the removal and replacement of landscaping materials damaged in the December 2022 flash freeze event.
- Appropriation increases to various General Fund budget activities for specific cost overruns as follows:
- An appropriation increase in the Police Department activity of $128,190 for accrued terminal leave payment for FY 2023 retirement of three (3) long-term employees.
- An appropriation increase in the Police Department Headquarters activity of $91,000 for higher than anticipated costs for R/M Grounds and R/M Plumbing and HVAC.
- An appropriation increase in the Fire and Rescue activity of $153,705 for higher than expected straight time costs and associated personnel services in FY 2023 for long-term absences due to injury and other FMLA covered events.
- An appropriation increase in the Fire and Rescue activity of $62,580 for higher than expected costs for personal protective equipment due to a FY 2022 order not being delivered until FY 2023.
- An appropriation increase in the Fire and Rescue activity of $45,015 to cover motor vehicle repairs and maintenance for Tower 51.
- An appropriation increase in the Fire and Rescue activity of $40,980 to cover the cost of a vehicle that was to be delivered in FY 2022 but due to supply chain issues, was delivered in FY 2023.
- An appropriation increase in the Fire and Rescue activity of $26,645 to cover the higher than expected costs of capital machinery and equipment for the newly purchased Engines 51 and 55.
- An appropriation increase in the Public Works activity of $40,780 to cover the cost of a vehicle that was to be delivered in FY 2022 but due to supply chain issues was delivered in FY 2023.
- An appropriation increase in the Traffic Signalization activity of $29,500 to cover the cost to replace a storm damaged traffic signal detection system.
- An appropriation increase in the Parks activity of $40,790 for accrued terminal leave payment for one employee with over 25 years of service.
- An appropriation increase in the Historic Homes Ravenswood activity of $22,585 to cover an increase in personnel services due to the temporary increase in the number of staff hours worked were greater than anticipated during the implementation of a new reservation software, higher than expected building, plumbing, and HVAC repairs and maintenance, higher than expected costs of household and janitorial supplies, and higher than expected cost of furniture and fixtures.
The proposed total General Fund appropriation increase of $15,885,000 from current year revenues will leave a minimum projected General Fund unassigned fund balance as of June 30, 2023 of approximately $53.4 million. The fund balance will exceed the stated budget policy objective of maintaining a minimum of 40% in reserves for future needs and emergencies.
Post-Employment Benefits Fund (127)
Increasing the appropriation for this fund by $168,980 for the transfer to the General Fund for reimbursement of accrued terminal leave payments for the Police ($128,190) and Parks ($40,790) activities in FY 2023 as referenced above.
Equipment Replacement Fund (310)
Additional Revenue of $1,165,000 reflects the special year-end appropriation transfer from the General Fund as referenced above.
Capital Projects Fund (311)
Additional revenue of $11,375,000 for the transfer from General Fund for FY 2024 projects.
Facilities Maintenance Fund (312)
Additional revenue of $640,000 reflects the special year-end appropriation transfer from the General Fund as referenced above.
Water and Sewer Fund (412)
Additional revenue for the final 1/2 of the Water Sewer Fund distribution of the American Rescue Plan (ARP) act allocation of $2,500,000.
Increasing the appropriation of this fund by $24,610 to cover the net interest cost for the Series 2021B refunding which partially refunded Series 2012 and 2013.
Municipal Center Fund (434)
Additional revenue of $2,023,230 reflects the year-end transfer from General Fund as referenced above.
Increasing the appropriation of this fund by $23,230 to cover the removal and replacement of landscaping materials that died from the winter freeze.
Emergency Communications District Fund (450)
Additional revenues of $146,125 reflect positive revenue collections in the current year over original budgeted estimates. This includes additional revenue appropriations of:
- TECB Reimbursement (Grant) - $44,000
- TECB Distribution of Excess Revenue - $50,935
- Interest Income - $51,190
Increasing the appropriation of this fund by $146,125 to cover the undepreciated balance of the 911 Dispatch Center assets at the Municipal Center that were not transferred to the new center at Police HQ.
Summary
The recommended budget appropriations amendments are required 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 2023.
Should the City Commission have any questions concerning this information, please contact the Finance Director. |