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SR-112508-8A~~r ~;tYOf City Council Report Santa Monica City Council Meeting: November 25, 2008 Agenda Item: ffi' To: Mayor andCity.Council Chairperson and Redevelopment Agency Members Chairperson and Parking Authority Members From: Carol Swindell, Director of Finance Subject: FY2007-08 Year-End Appropriations and Budget Adjustments and Transmittal of .Capital Improvement Program and Year-End Departmental Performance Review Status Reports Recommended Action Staff recommended budget actions for Year-End 2007-08: 1. City Council authorize the City Manager to make budget expenditure adjustments. between departments and major account groups within funds; and 2. City Council, Redevelopment Agency and Parking Authority approve year-end budget appropriations to departments a5 shown in Exhibit A. Executive Summary The actions requested of Council, the Redevelopment Agency and Parking Authority in this report are requested at year-end in various City funds to match budgets with actual expehditures. The FY2007-08 fiscal year ended on June 30, 2008 and is currently being audited by the independent CPA firm Mayer Hoffman McCann. The final Comprehensive Annual Financial Report is scheduled to be issued in December. The city-wide revised operating budget for FY2007-08 is $418.6 million, an additional net appropriation in the amount of $64.2 million is requested bringing the final revised operating budget to $482.8 million. Of the $64.2 million in increased budget authority, $61.1 million is appropriated for ohe-time. events, including the Charnock settlement ($56.7 million) and aone-time transfer to the Self Insurance Fund ($4.4 million). Council is asked to authorize the City Manager to make General Fund budget adjustments between departments and major account groups to maintain compliance 1 with the legal level of budget control. Proposed budget adjustments are identified in Attachment B. Included as attachments to this report for general information are: • The Year-End Departmental Performance Review (Attachment C) • Year-End Capital Improvements Program Status (Attachment D) Discussion Background Each year Council, the Housing Authority, the Redevelopment Agency and the Parking Authority adopt and revise budgets throughout the fiscal year, as needed. For most budget actions, there are sufficient funds appropriated within a fund to cover ahy under- budgeted account groups within particular departments. The staff report recommends that City Council authorize the City Manager to make changes between departments and account groups. All recommended actions are listed in Attachment B. Additional appropriations are requested as follows: • General Fund - A reduction of $26,300 to transfer bike valet services to the Miscellaneous Grants Fund and an increase of $140,376 for computer purchases and replacement. Additionally, $4,403,292 is transferred to the Self Insurance Fund in order to restore fund balances to previous levels. • Special Revenue Fund - An increase of $665,165 reflects an accounting adjustment to move Prop 42 Traffic Congestion Relief projects from the Gas Tax Fund (the net effect is zero since Prop 42 funding previously received is also transferred from the Gas Tax fund). • Charnock Fund - An increase of $56,670,944 related to settlement of ongoing litigation. Beach Fund - An increase of $3,973 related to seasonal staffing and additional fuel costs. • Earthquake Recovery Redevelopment Fund - An increase of $1,468,852 for greater than anticipated Tax Increment pass-through payments. 2 • Miscellaneous Grants Fund - An increase of $337,242 to reflect various grant expenditures not previously budgeted and to move the bike valet services from the General Fund. • Water Fund - An increase of $23,000 in appropriations for the Computer Replacement Program for purchases and replacement costs. • Wastewater Fund - An increase of $4,250 in appropriations for the Computer Replacement Program for purchases and replacement costs. • Solid Waste Fund - An increase of $445,127 for personnel costs associated with Commercial Collections implementation, increased fuel costs, and an increased share for Environmental Programs. • Givic Auditorium Fund - An increase of $4,250 in appropriations for the Computer Replacement Program for purchases and replacement costs. • Airport Fund - An increase of $2;000 in appropriations for the Computer Replacement Program for purchases and replacement costs. • Cemetery Fund - An increase of $20,000 in appropriations for the Computer Replacement Program for purchases and replacement costs. • Gas Tax Fund - A decrease of $665,165 to move Traffic Congestion Relief projects to the Special Revenue Fund. • SCAOMD AB 2766 Fund - An increase of $346,000 to purchase AQMD eligible vehicle purchases through the Vehicle Management Fund. • Vehicle Maintenance Fund - An increase of $7;607 for increased fuel costs. • .Information.. Technology Replacement & Services Fund - An increase of $163,126 for purchases of computer equipment. • Comprehensive Self Insurance and Workers Compensation Funds - Ah increase of $147,596 due to increased settlement costs in the previous fiscal year. Total requested appropriations city-wide are $64,161,467. All transactions are identified by department and division within a fund in Attachment A. It is anticipated that after completion of the audit the ending General Fund Balance will have an unreserved and undesignated fund balance of $5.2 million. Of this remaining 3 fund balance, approximately $4 million is recognized in unbudgeted revenues. Specifically, additional property taxes of $2.2 million are a result of a one-time change in accounting for the RDA tax pass through to the General Fund, as these funds were not expected to be received (or recorded) until FY 2008-2009. Business license taxes added an additional $0.4 million and other revenues were $1.4 million, including approximately $0.9 million recognized as revenue related to the City's prepayment to CaIPERS and a $0.3 million reimbursement to the General Fund for employee paid insurance premiums. In addition to the effect of these revenues on undesignated fund balance, certain Capital Improvement Projects (CIP) were closed out as part of year- end cleanup for completed projects. These. designated CIPs included funds -for the Public Safety Facility (PSF) and the. Airport Park Expansion. Staff will discuss potential uses of undesignated fund balances at an upcoming study session. The 10% set-aside of $25.3 million for operating contingencies has been reflected in a designation on the Balance Sheet. Staff will make any other recommendations for General Fund appropriations in the staff report revising FY2008-09 budget and personnel changes, also scheduled for action on November 25, 2008. 4 Budaet/Financial Impacts The requested FY2007-08 budget actions adjust the revised budgets to actual expenditures in the various City funds. Prepared by: Chuck McBride, Assistant Director of Finance Approved:. Forwarded to Council: ~ ~ ~ ` ~. ,,.Carol Swindell . L ont Ev Director of Finance i Manager Attachments: A: Proposed FY2007-08 Budget Appropriations B: FY2007-08 Budget Changes with No Fund Appropriation Increases C: The Year-End Departmental Pertormance Review D: Year-End Capital Improvements Program Status 5 Additional attachments available at City Clerk's Office.