Title
Amend Ordinance S-50949 Adopting the 2024-25 Annual Budget for Operating Funds (Ordinance S-52046) - Citywide
Description
An ordinance (Attachment A) amending Ordinance S-50949 adopting the 2024-25 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 2024-25 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 and complies with requirements set forth in City Code Chapter 2, Section 2-16(A)(2).
Arizona Revised Statute 42-17106 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. Arizona Revised Statute 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 Budget and Research staff 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 Fiscal Year (FY) 2025-26 that actually occurred during FY 2024-25. These timing variances can be quite large, especially when dealing with construction contracts. Allowing for these timing differences in the request for year-end budget amendments allows for bid awards and payments to vendors to proceed.
The amendments to the 2024-25 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 2024-25 appropriation authority are requested in the following:
- General Fund Capital Improvement Program because funding reserved to meet local match requirements on potential federal grants was both reduced and carried over to 2025-26.
- Federal Operating Trust Funds due to unawarded grant funds and carryover of unused grant funds.
Increases in 2024-25 appropriation authority are requested in the following:
- General Fund Public Safety Program due to police overtime and related fringe-benefit overages.
- Golf Course Funds as a result of continued increased usage of City golf courses. Increased expenditures in this fund are offset by increased revenues.
- Neighborhood Protection Funds due to Council approval in December 2024 of additional $3 million in Neighborhood Block Watch Funds to support the Gated Alley Program.
- Public Safety Enhancement Funds for lower Police vacancy savings than originally forecasted.
- Regional Wireless Cooperative Funds as a result of less credits received because of an adjustment to operating and maintenance charges and the continuation of a project from the previous year that was unbudgeted.
- The following fund to provide for minor year-end variances: Cable Communications.
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.