Title
Amend Ordinance S-43653 Adopting the 2017-18 Annual Budget for Operating Funds (Ordinance S-44748)
Description
An ordinance (Attachment A) amending Ordinance S-43653 adopting the 2017-2018 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 2017-18 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 2017-18 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 2018-19 fiscal year that actually occurred during the 2017-18 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 2017-18 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 2017-18 appropriation authority are requested in the following:
- Federal Transit Funds due to the carryover of funding for various capital improvement projects that were budgeted but not completed in 2017-18.
- Water Funds due to changing the source of funding for projects from operating funds to bond funds.
Increases in 2017-18 appropriation authority are requested in the following:
- Parks and Recreation Funds as a result of additional funding for replacement vehicles within the aging fleet.
- Library Funds due to unexpected flood repairs related to the Burton Barr Central Library.
- Federal and State Grant Funds due to USAR Deployment and FEMA Grant funding and other grant awards that were not included in the original budget.
- Human Services Grant Funds due to a Head Start/Early Head Start cost of living adjustment and other grant awards that were not included in the original budget.
- Neighborhood Protection Funds to hire additional police officers that were not included in the original budget.
- Regional Wireless Cooperative Funds which will use some of the reserve balance due to lower charges to other cities and other City of Phoenix departments for radio services as a result of the annual true-up process built into the cost recovery model.
- Sports Facilities Funds to cover unplanned loan expenditures and due to unforeseen Talking Stick Resort Arena plumbing repair costs.
- Wastewater Funds to pay down Wastewater's unfunded pension liability.
- The following funds to provide for minor year-end variances: Court Awards, Golf Course and 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 Ed Zuercher and the Budget and Research Department.