Title
Amend Ordinance S-46715 Adopting the 2020-21 Annual Budget for Operating Funds (Ordinance S-47663)
Description
An ordinance (Attachment A) amending Ordinance S-46715 adopting the 2020-21 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 2020-21 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 2020-21 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 2021-22 fiscal year that actually occurred during the 2020-21 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 2020-21 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 2020-21 appropriation authority are requested in the following:
- General Fund Criminal Justice Funds due to minor budgetary savings.
- General Fund Public Safety Funds due primarily to vacancy savings from sworn positions.
- Federal and State Grant Funds due primarily to the $143.3 million in Coronavirus Relief Funds not programmed in the budget that were used to offset General Funded Public Safety salaries as permitted by the Federal guidelines.
Increases in 2020-21 appropriation authority are requested in the following:
- General Fund General Government Funds due to an increase in General Fund resources resulting from a portion of Coronavirus Relief Funds that was used to offset Public Safety salaries, as permitted by the Federal guidelines, and which were used to carry out the City Council adopted plan in response to the COVID-19 pandemic. These increased resources allowed for unplanned spending on technology projects including distance learning, WiFi access, telework, and e-government projects as well as both community and employee COVID-19 testing, resident assistance with City service bills, and PPE supplies for employees.
- General Fund Transportation Funds due to an increase in General Fund resources resulting from a portion of Coronavirus Relief Funds that was used to offset Public Safety salaries, as permitted by the Federal guidelines, and which were used to carry out the City Council adopted plan in response to the COVID-19 pandemic. These increased resources allowed for unplanned spending on the retrofit of the City's bus fleet to provide a safety barrier between drivers and passengers.
- General Fund Environmental Services due to an increase in General Fund resources resulting from a portion of Coronavirus Relief Funds that was used to offset Public Safety salaries, as permitted by the Federal guidelines, and which were used to carry out the City Council adopted plan in response to the COVID-19 pandemic. These increased resources allowed for unplanned spending on public facility retrofit projects.
- General Fund Unassigned Vacancy Savings to account for the assignment of vacancy savings from Unassigned to General Fund specific programs.
- General Fund Capital Improvement Funds as a result of an unbudgeted acquisition of property for at-risk veterans' housing utilizing Coronavirus Relief Funds.
- Golf Course Funds due to unbudgeted maintenance needs.
- Human Services Grant Funds due to the receipt of Coronavirus Relief Funds in response to the pandemic that were not included in the original budget.
- Public Safety Expansion Funds due to higher than estimated personal service costs.
- Regional Wireless Cooperative Funds due to a reduction in credits received from RWC members.
- Transportation 2050 Funds due to the use of available pay-as-you-go funds in place of bond funds, as originally planned, allowing issuance of debt to be delayed.
- The following funds to provide for minor year-end variances: General Fund Community Development 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 Ed Zuercher, Assistant City Manager Jeff Barton and the Budget and Research Department.