Title
Amend Ordinance S-50985 Adopting the 2024-25 Capital Funds Budget (Ordinance S-52087) - Citywide
Description
An ordinance (Attachment A) amending Ordinance S-50985 adopting the 2024-25 Capital Funds Budget to authorize reallocating appropriations among lawfully available appropriations to ensure the continued operation of the City of Phoenix in the payment of necessary expenses.
Report
Summary
This legally required amendment to the 2024-25 Capital Funds Budget will allow the City to close out the current fiscal year's budgetary accounts and proceed with the annual independent audit. This is a standard end-of-year process required to close the books.
Arizona Revised Statutes (A.R.S.) Section 42-17106.A precludes any expenditure not included in the budget even if additional funds become available. This means all expenditures require an appropriation. An appropriation is the formal recognition in the City's official accounting records that the City Council has approved spending authority. A.R.S. Section 42-17106.B allows the City Council to transfer spending authority between line items in the adopted budget. This does not represent an actual transfer of funds, but rather, only transfers of spending authority between specific areas. As a result, the total bottom line budget amount for 2024-25 does not change.
To make sure all planned expenditures have appropriate spending authority, each year the Budget and Research Department brings to the City Council a request to amend the original budget amounts between specific areas at the end of each fiscal year. This is a normal part of the annual budget close-out process. Variances between estimated and actual expenditures that trigger the need to do these reallocated appropriations are usually caused by timing differences, such as expenditures originally planned for the later part of the 2023-24 fiscal year that actually occurred during the 2024-25 fiscal year. These timing variances can be quite large, especially when dealing with construction contracts. Allowing for these timing differences in our request for year-end budget amendments allows for bid awards and payments to vendors to proceed.
The amendments to the 2024-25 Capital Funds Budget require City Council approval to move spending authority from areas where excess authority is available to other areas where insufficient authority was originally provided due to normal changes during the year.
A $34,800,000 decrease in 2024-25 appropriation authority is requested in the Non-Departmental Capital Funds Budget due to contingency funds budgeted in 2024-25 that were not required.
A $20,000,000 increase in 2024-25 appropriation authority is requested in the Economic Development Program's Capital Funds Budget to accelerate the Rio Reimagined land acquisition project, allowing the acquisition of a single large parcel in fiscal year 2024-25 in place of multiple smaller parcel acquisitions across the five-year Capital Improvement Program.
A $200,000 increase in 2024-25 appropriation authority is requested in the Finance Program's Capital Funds Budget due to unbudgeted expenditures for the SAP financial system upgrade in fiscal year 2024-25.
A $1,000,000 increase in 2024-25 appropriation authority is requested in the Human Services Program's Capital Funds Budget due to unbudgeted expenditures for the Phoenix Navigation Center located at 11 S. 71st Avenue in fiscal year 2024-25.
A $13,600,000 increase in 2024-25 appropriation authority is requested in the Solid Waste Program's Capital Funds Budget due to vehicles and equipment expenditures using Solid Waste Bond Funds in fiscal year 2024-25; costs were originally planned to be recorded in Solid Waste Operating Funds.
These are balancing measures with a net impact of $0. The total appropriation remains unchanged.
Department
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the Budget and Research Department.