Title
Amend Ordinance S-52048 Adopting the 2025-26 Annual Budget for Operating Funds (Ordinance S-52967) - Citywide
Description
An ordinance (Attachment A) amending Ordinance S-52048 adopting the 2025-26 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 2025-26 Operating Budget will allow the City to close out the current fiscal year's budgetary accounts and proceed with the annual independent audit per City Code Chapter 2, Section 2-16(A)(2). This is a standard end-of-year process required to close the books.
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 2025-26 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) 2026-27 that actually occurred during FY 2025-26. 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 2025-26 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 2025-26 appropriation authority are requested in the following:
- Transportation 2050 Funds due primarily to estimated 2025-26 costs being lower than budgeted costs for light rail extension projects.
Increases in 2025-26 appropriation authority are requested in the following:
- General Fund Community Development Program due to the transition of fiscal oversight responsibility for the Workforce Innovation and Opportunity Act grant from Human Services to Community and Economic Development.
- Golf Course Funds as a result of unplanned repairs and operational needs.
- Regional Wireless Cooperative Funds due to the change in accounting of City of Phoenix RWC costs from an expenditure credit to a recorded revenue.
- Secondary Property Tax Funds to support defeasance of outstanding General Obligation Bond debt.
- Solid Waste Funds as a result of vehicle replacement expenditures moving from CIP to 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 Ed Zuercher, Deputy City Manager Amber Williamson and the Budget and Research Department.