Title
Amend Ordinance S-47661 Adopting the 2021-22 Annual Budget for Operating Funds (Ordinance S-48717)
Description
An ordinance (Attachment A) amending Ordinance S-47661 adopting the 2021-22 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 2021-22 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 2021-22 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 2022-23 fiscal year that actually occurred during the 2021-22 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 2021-22 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 2021-22 appropriation authority are requested in the following:
- Federal and State Grant Funds due primarily to the carryover of Coronavirus State and Local Fiscal Recovery Funds (SLFRF) for several projects from 2021-22 to 2022-23.
Increases in 2021-22 appropriation authority are requested in the following:
- General Fund General Government Funds due to unplanned spending on technology projects including extra security solutions and services for the Information Security and Privacy Office (ISPO).
- General Fund Community Development Funds due to increased costs for technology projects including distance learning and WiFi access.
- General Fund Community Enrichment Funds due to operating costs for parking garages acquired from the property at 100 W. Washington St. including the 2nd Avenue Garage.
- General Fund Criminal Justice Funds due to unexpected spending on build-outs and renovations for Public Defender offices at the Municipal Court Building.
- General Fund Environmental Services Funds due to unbudgeted operating and maintenance costs as a result of the new property at 100 W. Washington St.
- General Fund Transportation Funds for unplanned replacements of outdated parking meters and increased street cleanings for the Hatcher Road Community Safety Plan.
- General Fund Capital Improvement Funds for Information Technology Data Center Modernization work, which was originally budgeted using excise tax bond funds.
- City Improvement Funds for the acquisition of property at 100 W. Washington St., which was approved subsequent to budget adoption.
- Golf Course Funds as a result of increased revenue providing resources to do necessary unbudgeted maintenance projects.
- Human Services Grant Funds due to the receipt of American Rescue Plan Act and Emergency Rental Assistance Funds in response to the pandemic that were not included in the original budget.
- Neighborhood Protection Funds due to higher than estimated personal service costs.
- Wastewater System Funds due to increases in chemical costs.
- The following funds to provide for minor year-end variances: Cable Communications, Regional Wireless Cooperative, and Sports Facilities 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 Jeffrey Barton and the Budget and Research Department.