1 STAFF REPORT
DATE: August 23, 2022
TO: Justin Hess, City Manager
FROM: Jennifer Becker, Financial Services Director
VIA: Leana Mkrtchyan, Deputy Financial Services Director By: Joy Escalante, Budget Manager
Susan Langford, Revenue Manager
SUBJECT: Adoption of Resolutions Continuing Appropriations from Fiscal Year 202 1- 22 to Fiscal Year 2022-23
RECOMMENDATION:
1. Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 202 2-2023 BUDGET FOR THE PURPOSE OF CONTINUING APPROPRIATIONS FROM THE FISCAL YEAR 2021-2022.
2. Adopt A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 202 2-2023 BUDGET FOR THE PURPOSE OF CONTINUING APPROPRIATIONS FROM THE FISCAL YEAR 2021- 2022.
BACKGROUND
At the end of each Fiscal Year (FY), departments review their budget line items to identify appropriations that have not been expended or encumbered and need to be continued into the next fiscal year. There are various reasons for departments to request continuing appropriations, also known as carryovers. The most common ones are for ongoing or multi-year projects, delayed program implementation, or program operations that cross fiscal years such as elections, brush clearance, joint use agreements, and summer park programs. Grants, federal and state program funding , donations, and Council-directed set-asides or holding accounts are restricted for a specific purpose and may cross fiscal years as well.
FINANCIAL
SERVICES
2 DISCUSSION
The Summary of Continuing Appropriations by Fund (Attachment 3 ) provides the total amount of requested carryovers for each fund. Continuing Appropriations by Account Number (Attachment 4) provides details for each request by fund type, including account number and name, amount requested, and a justification. It is important to note that the continuing appropriations amounts are only an estimate at this time, as financial activities in these accounts may continue until the fiscal year is officially closed. T hese continuing appropriations have no impact on the FY 2022-23 adopted budget or financial forecast because they are not new appropriations.
This year, citywide carryover requests total $34.7 million, roughly $6.2 million higher than last year’s total requests. The General Fund (Fund 001), the Burbank Water and Power (BWP) Water Fund (Fund 497), and the Vehicle Equipment Replacement Fund (Fund 532) account for the largest variances from prior year requests. This is largely due to the carryover of several large grants or appropriations related to the COVID-19 Pandemic (Pandemic), as well as supply chain issues that have delayed the purchase of equipment,and the implementation of certain projects and programs. Similar to last year, all multi- year infrastructure projects within the City’s approved Capital Improvement Program (CIP) were carried over as part of the Budget adoption process that took place on May 24, 2022.
General Fund requested carryovers are $6.5 million, which equates to 3.2% of the total FY 2021- 22 Adopted General Fund budget. Of the total $6 .5 million General Fund carryover requests, over $ 3.5 million is comprised of restricted funding that includes grants, donations, and various contractual obligations. The most significant General Fund carryover amounts relate to these restricted items, such as the Homeless Incentive Program, Permanent Local Housing Allocation (PLHA), Animal Shelter donations, and Urban Area Security Initiative grants for Fire and Police.
General Fund Year-End Financial Update
The 2022-23 fiscal year is well underway, and while FY 2021 -22 has not been officially closed, staff is pleased to report an estimated year-end General Fund budget savings of approximately $8.1 million, assuming the approval of the proposed carryover appropriations included in this report . General Fund savings is largely attributable to vacant positions, in addition to some of the remaining City Council Pandemic savings measures implemented in the prior fiscal year . Altogether, the General Fund exceeded staff’s year-end projected budget savings by about $3.3 million. These figures are subject to change until the fiscal year has officially been closed and the City’s annual external audit process is completed.
FY 202 1-22 revenues are still being collected at this time , with final numbers not anticipated to be available until early September. Based on staff’s early analysis of June 3 2022 receipts, it is anticipated that the General Fund is on target to meet, or exceed the revised revenue projections presented to the City Council during the FY 2021 -22 Mid- Year Financial Report. Sales tax, transient occupancy tax, and transient parking tax are rebounding faster than expected, bolstered by the return of tourism to the region along with price inflation. Property tax revenues also remain strong due to the continued rise in home values.
Barring any unexpected impacts from the ongoing Pandemic, the General Fund forecast projects a continued economic recovery, with revenues rebounding throughout FY 2022-
23. This, combined with the General Fund budget savings achieved during the previous fiscal year and the funding received from the American Rescue Plan Act (ARPA), puts Burbank’s General Fund in a strong cash position throughout the five years of our financial forecast. While a number of factors, such as inflation and rising interest rates, have led many economists to predict a future economic recession, Burbank’s financial position remains solid at this time. Staff will continue to monitor the state of the economy as well as potential future financial implications of the P andemic and return to the City Council with the FY 2021-22 Annual Comprehensive Financial Report and the FY 2022-23 First Quarter Update in late fall.
FISCAL IMPACT
Should the City Council adopt the resolution and approve the continuing appropriations as proposed, the FY 202 2-23 Budget will be amended for citywide continuing appropriations of approximately $34.7 million, which includes $6.5 million for the General Fund, and approximately $1.4 million for the Housing Authority. As previously mentioned, the totals for continuing appropriations are preliminary and the amounts may be adjusted slightly as financial activities continue until the fiscal year is officially closed. These continuing appropriations do not impact the recurring balance of the FY 2022-23 adopted budget or the financial forecast as they are not new appropriations. At year -end, any unencumbered appropriations, not requested or approved as a continuing appropriation, return to the available balance of the applicable fund and can be appropriated for other purposes by the City Council.
CONCLUSION
By approving the requested continuing appropriations, the City Council will be providing staff with the funding required to complete and/or continue with various Council-supported projects, grants, programs, and services. Staff recommends that City Council adopt the proposed resolutions approving the requested continuing appropriations from FY 202 1- 22 to FY 2022-23 for the City and the Housing Authority.
4 ATTACHMENTS
Attachment 1: A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 202 2-2023 BUDGET FOR THE
PURPOSE OF CONTINUING APPROPRIATIONS FROM THE FISCAL
YEAR 2021-2022.
Attachment 2: A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 202 2-2023 BUDGET FOR
THE PURPOSE OF CONTINUING APPROPRIATIONS FROM THE
FISCAL YEAR 2021-2022.
Attachment 3: Summary of Continuing Appropriations by Fund Attachment 4: Continuing Appropriations by Account Number