Title
Amend Ordinance S-44749 Adopting the 2018-19 Annual Budget for Operating Funds (Ordinance S-45783)
Description
An ordinance (Attachment A) amending Ordinance S-44749 adopting the 2018-19 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 2018-19 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 2018-19 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 2019-20 fiscal year that actually occurred during the 2018-19 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 2018-19 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 2018-19 appropriation authority are requested in the following:
- Federal Transit Funds due to Fare Collection System expenses that were budgeted in 2018-19 but carried over to next fiscal year and also due to grant funding received for bus acquisition that was below budget.
- Sports Facilities Funds due to a procedural accounting change moving debt service payments previously budgeted in the Sports Facilities Fund to the City Improvement Fund, with an offsetting transfer from the Sports Facilities Fund to cover the debt.
- The following General Fund Programs due to minor savings: General Government, Community Development and Capital Improvement Funds.
Increases in 2018-19 appropriation authority are requested in the following:
- General Fund Environmental Services as a result of the movement of the Floodplain Management program from the Street Transportation Department to Public Works.
- Parks and Recreation Funds as a result of increases to water usage and higher than expected facility maintenance costs.
- Library Funds due to unanticipated facility major maintenance expenses, higher than expected equipment costs, and due to the unbudgeted carryover of funds for Burton Barr Library.
- City Improvement Funds due to the procedural accounting change mentioned above resulting in recording debt service obligations previously budgeted in the Sports Facilities Fund in City Improvement, with an offsetting transfer from the Sports Facilities Fund to cover the debt.
- Court Awards Funds as a result of unplanned facility and computer system related projects.
- Federal and State Grant Funds due to Fire USAR and FEMA Grant funding and other Police grant awards that were not included in the original budget.
- Human Services Grant Funds due to the movement of the Workforce Development Program from the Community and Economic Development Department to Human Services as well as increased funding for the LIHEAP program.
- The following funds to provide for minor year-end variances: Cable Communications, Golf Course, Neighborhood Protection, Public Safety Expansion and Regional Wireless Cooperative 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 Ed Zuercher and the Budget and Research Department.