Title
Amend Ordinance S-42624 Adopting the 2016-17 Annual Budget for Operating Funds (Ordinance S-43651)
Description
An ordinance (Attachment A) amending Ordinance S-42624 adopting the 2016-2017 Annual 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 2016-17 Operating 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.
State law 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. State law 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 2016-17 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 early part of the 2017-18 fiscal year that actually occurred during the 2016-17 fiscal year. These timing variances can be quite large, especially when dealing with construction contracts in the capital budget. 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 2016-17 Operating 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.
Decreases in 2016-17 appropriation authority are requested in the following:
- General Fund Capital Improvements due to the use of General Obligation Bond Funds instead of General Funds for the Fire Computer Aided Dispatch project and due to the carryover of funds planned for various other capital improvements to 2017-18.
- General Fund Transportation due to savings resulting from higher than anticipated position vacancies in the Street Transportation Department.
- Solid Waste and Water Funds due to the carryover of funding for various capital improvement projects that were budgeted but not completed in 2016-17.
Increases in 2016-17 appropriation authority are requested in the following:
- General Fund Public Safety due to increased overtime usage as a result of sworn vacancies.
- Court Awards Funds as a result of unplanned expenditures, including a helicopter engine overhaul and investigative overtime.
- Federal and State Grant Funds due to Strengthening Workforce Families Initiative funding and other grant awards that were not included in the original budget.
- Human Services Grant Funds due to a Head Start/Early Head Start cost of living adjustment and supplemental award and other grant awards that were not included in the original budget.
- Sports Facilities Funds to cover unplanned expenditures for financial analysis and legal fees.
- Wastewater Funds to cover the costs for the 91st Avenue Biogas Project, which was not included in the original budget.
- The following funds to provide for minor year-end variances: Cable Communications, Golf Course and Regional Wireless Cooperative.
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 Ed Zuercher and the Budget and Research Department.