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HomeMy WebLinkAbout06-17-2013 c13 2013-13 budget changescounctL âqenòa pepont MeetìngDate 6-n-2013 lþmNumb€! C1 3 CITY OF SAN LUIS OBISPO FROM: Wayne Padilla,Interim Director of Finance & Information Technology SUBJECT:CONSIDERATION OF A RESOLUTION ADOPTING CHANGES TO THE BUDGETS OF VARIOUS FUNDS FOR THE 2OI2-13 FISCAL YEAR AND CREATING THE INSURANCE BENEFIT FTIND RECOMMENDATION Adopt a resolution approving the revisions to the budgets of various funds to reflect current revenue and expenditure assumptions for the 2012-13 Fiscal Year and creating the Insurance Benefit Fund. DISCUSSION As the 2013-15 Financial Plan was being prepared, several proposed changes to the budgets of various funds were identified. These changes, which are listed below, reflect the current assumptions for revenue and expenditures and merit consideration for adoption. Additionally, staff is recommending that the Insurance Benefit Fund be created to account for various costs related to insurance and benefit programs now and in the future. Several revisions to the current year budget have been proposed for consideration. These changes reflect revised assumptions for either revenues or expenditures in various funds and are described below. Insurance Benefit Fund As discussed above, this new fund would be used to account for costs related to insurance and benefit programs. For example, the installment payments made to the California Joint Powers Insurance Authority (CJPIA) for the retrospective payment that is outstanding will be made from this fund using resources from the Enterprise Funds and the General Fund. During 2014-15, this fund will also retain the additional l%o charge (approximately $33I,400 citywide) that the City will self-assess for CaIPERS retirement program costs in advance of the anticipated changes in the employer rates that CaIPERS will implement in 2015-16. During 2075-16, the Insurance Benefit Fund will then apply this amount towards the City's retirement obligation in that year. During 2072-13, it is proposed to have the General Fund transfer the Property Tax Administration Fee (PTAF) refund of $632,800 that was received from the County into this fund for use in the future to pay down the retrospective CJPIA payment. The Preliminary Financial Plan reflects this transfer occurring during the current year as part of the budget information presented in Section H of the Financial Plan's Changes in Financial Position documents (see page H-65). General Fund The refund of the prior years' overpayment of the Property Tax Administration Fee (PTAF) as described above is reflected in the General Fund as additional property tax revenue in the amount of $632,800. A transfer out to the Insurance Benefit Fund in the same amount is also shown in order to set this amount aside for future use in paying the retrospective liability amount that is c13-1 owed to the California Joint Powers Insurance Authority (CJPIA). This budget change does not alter the General Fund's ending fund balance. Capital Outlay Fund Staff continues to research the appropriations reflected in this fund in order to determine the reason why it was found to be out of balance at the time of the mid-year review. At this time, the budget reflects a decrease in appropriations ($119,838) to remove amounts that are related to capital projects that were previously completed and closed. The final closing entries for these projects had not been made to the financial system previously. These adjustments bring the fund reserve into a positive position. Debt Service Fund The budget amendment reflects two items, both of which are tied to the 2012 rcftnancing of the 2001 bonds and which were not provided for in the current budget since these seem to be hold over items from the original f,rnancing transaction. The first is a charge ($11,500) for work performed by one of the independent accounting firms who confirmed certain calculations related to the bond issue. The second amount ($98,108) is related to the payment of a previously calculated interest arbitrage rebate amount for the 2001 bonds at the time they were refinanced. This amount is based on the required disclosure report that was prepared to determine whether the rate of return on amounts that were invested until they were utilized from the 2001 bond proceeds and reserves exceeded the bonds' arbitrage yield rate. Such a payment is not uncommon and is due to the fact that the City's rate of return from the investment of available bond reserves and bond proceeds was higher than the tax exempt arbitrage limit set in the original bond documents. The actual payment of these amounts came from balances held by the bond trustee. Open Space Protection Fund The budget amendment reflects a reduction for capital outlay in the amount of $385,893. This amount is related to the Froom Ranch open space acquisition that was originally planned using grant monies from the California Wildlife Conservation Board that did not materialize. Removing this appropriation restores the budgeted ending fund to a positive value. Airport Area Impact Fee Fund The proposed budget amendment lowers the amount of revenue anticipated from investment income by $11,500 to reflect the lower rate of return that is being reahzed from the City's investment portfolio. This is in-line with adjustments made to the General Fund's investment income forecast when the Mid-Year Budget Update was approved in February. Sewer Enterprise Fund The proposed budget amendment makes changes to various revenue line items in order to reflect current trends. The following line items are proposed for adjustment based on the YTD revenues received and the remaining amounts that are estimated to be received: Customer Sales Charges: reduced by $369,000 reduced by $34,000 (in-line with adjustment made at mid-year to the General Fund's investment income) Investment Revenue c13-2 Impact Fees:increase by $30,000 Connection Charges: increase by $7,000 Account Set-up Fees: decrease by $16,000 Cify Attorney's Office Contract Services Carryover As part of the 20I2-I3 Budget supplement, Council appropriated $25,000 to the City Attomey's office to support code enforcement efforts. The prior allocation to the ofhce for contract services was $1,500. It was originally contemplated that the funding would be utilized to obtain the assistance of outside counsel, as necessary to address procedural due process/conflict requirements and to supplement resources for increased prosecutorial case load. Subsequent to the allocation of funding, the City Attorney's Office began exploring means by which to maximize funding. The City Attorney's Office has been working with Hastings College of Law to explore opportunities to employ a recent law graduate in a one year fellowship opportunity. It now appears that there may be a prospect to employ such a resource as a temporary, in-house staff resource for one year within the budget allocated to the City Attorney's Offrce for code enforcement supporl. The City Attorney proposes to focus the resource on support of staff in policy and enforcement infrastructure development and, once licensed, court appearances on code enforcement matters. Thus, the City Attorney is requesting that Council authorize the Finance Director to affect the carryover from20l2-13 of up to $26,100 currently unencumbered in the City Attomey's Contract Services line item and to transfer this amount to the City Attorney's Temporary Salaries line, in the event a fellowship can be established. F'ISCAL IMPACT If approved, these budget amendments will align the appropriated amounts with the values that staff expects to be realized through the end of the current hscal year. It is important to note that the budgeted values are used as a guide by staff when preparing the audited financial statements, since a significant variance from a realistic budget value can be an indicator of an item that has been overlooked or posted incorrectly. ALTERNATIVES If the City Council opts to forego approving these budget amendments, a final budget clean-up item can be brought back before the City Council at alater date. ATTACHMENT Resolution aonrovins the budset revisions for 2012-13 and creatins the lnsurance Benefit Fund T:\Council Agenda Reports9Ol3V013-06-17\2012-13 Budget Changes (PadillalCAR - Adoption of2012-13 budget chgs - final doc c13-3 RESOLUTION NO (2013 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING AN AMENDMENT TO TIJE 2OI2-13 BUDGETS OF VARIOUS FUNDS AND CREATING THE INSURANCE BENEFIT INTERNAL SERVICE FUND WHEREAS, the City Council adopted the 2011-13 Financial Plan on June 2I,2011, which established comprehensive financial and policy guidelines for fiscal years 2011-I2 and 2012-13; and WHEREAS, the City Manager submitted the 20lI-I3 Financial Plan Supplement and Preliminary 2012-13 Budget to the City Council for their review and consideration; and V/HEREAS, the City Council approved the Preliminary 2012-13 Budget and adopted it as the 20I2-I3 Budget on June 19,2012;' and WHEREAS, the City Council considered the Mid-Year update to the 2012-13 Budget on February 19,2013 and approved revisions to the 2012-13 Budgets of various funds that were reflected in that document; and WHEREAS, the Council has considered the Preliminary 20I3-I5 Financial Plan that has been presented during public hearings held on June 10, ll, 12 and June 17,2013 which includes proposed revisions to various funds to reflect current revenue and expenditure assumptions for the 2012-13 Fiscal Year as set forth in detail in the June 1 7, 201 3 Council Agenda Report item C-13; and WHEREAS, the Insurance Benefit Internal Service Fund is hereby created for the purpose of accumulating the resources needed to pay for certain insurance and benefit program costs. NOV/, THEREFORE, BE IT RESOLVED that the Council of the City of San Luis Obispo hereby approves and adopts the changes to the 2012-13 Budget as reflected in the Preliminary 2013-15 Financial Plan and authorizes the Finance Director to affect the carryover from 2012-13 of up to $26,100 currently unencumbered in the City Attorney's Contract Services line item and to transfer this amount to the City Attorney's Temporary Salaries line, in the event a fellowship can be established. Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was adopted on June l7th,2013 Mayor Jan Howell Marx c13-4 ATTEST: Maeve Kennedy Grimes, City Clerk APPROVED AS TO FORM Christine Christine Dietrick, City Attorney c13-5 Page intentiona lly left blank. c13-6