Title
Amend Ordinance S-49813 Adopting the 2023-24 Annual Budget for Operating Funds (Ordinance S-50948)
Description
An ordinance (Attachment A) amending Ordinance S-49813 adopting the 2023-24 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 2023-24 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 2023-24 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) 2024-25 that actually occurred during FY 2023-24. 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 2023-24 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 2023-24 appropriation authority are requested in the following:
- Transportation 2050 Funds due to Public Transit and Street Transportation capital expenditures originally planned for 2023-24 that are now projected for 2024-25.
Increases in 2023-24 appropriation authority are requested in the following:
- City Improvement Funds due to higher than anticipated interest rates for the Transportation 2050 revolver loan.
- Development Services Funds due to costs for the ShapePHX project planned for 2024-25 that may occur in 2023-24 and due to the increased need for contractual plan review services.
- Golf Course Funds as a result of continued elevated usage of City golf courses increasing operations and maintenance costs.
- Human Services Grant Funds for grant awards received after the 2023-24 budget was developed.
- Regional Wireless Cooperative Funds as a result of less credits received because of an adjustment to operating and maintenance charges.
- Wastewater Funds due to debt service payments and increased costs for chemicals needed to treat wastewater.
- The following fund to provide for minor year-end variances: Secondary Property Tax.
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.