Item #06
Date: February 15, 2022
To: Mayor and City Council
From: Jennifer Styczynski, Finance Director
Jim Schaad, City Manager
Subject: Budget Amendments to FY 2021-22 Adopted General Fund Budget Recommendation:
Pass a Motion to amend the FY 2021-22 Adopted Budget with the proposed adjustments to revenue and expenses as stated below.
Rationale for Recommendation:
As noted in the staff presentation to Council at the February 1, 2022 Council meeting, there have been changes to the City’s fiscal projections. On the revenue side, staff maintained conservative projections during budget development due to the ongoing COVID-19 pandemic and fortunately sales tax revenues have been tracking higher than budgeted. For expenses, there have been a combination of anticipated and unanticipated expenses causing mid-year projections to be higher than the original budget. Staff recommends that the budget be amended to reflect the fiscal activities of the City more accurately.
Background:
City Council adopted the FY 2021-22 budget on June 15, 2021. The City is required to maintain a balanced budget. City staff continually works to ensure that the City is not deficit spending. Therefore sales tax projections were estimated to provide conservative financial projections given the on-going COVID-19 pandemic. At midyear review staff has found that sales tax revenues have continued to increase over previous years. It is therefore recommended that City Council authorize amending the Adopted Budget for FY 2021-22 to incorporate the additional $696,500 in revenues that are projected. Along with revenue increases, there have also been some increased expenses. Council has already approved $344,706 in appropriations, of which the majority were related to wage increases for bargaining unit and non-bargaining unit employees.
Additional appropriations of $327,080 are being recommended, primarily to address increases in overtime, higher fuel costs and expenditures to address deferred maintenance of facilities.
Discussion & Analysis:
City staff is recommending adding a revenue budget adjustments of $696,500 to increase general fund revenues and supplemental appropriations of $327,080 to increase general fund expenditures. The below summary gives an overview of the changes, and the attachment presents further detail on amounts and a brief description of why the budget amendments are being requested as follows below.
Item #06
Alignment with City Council Goal(s):
This Agenda Item aligns with current Council Goals as it updates the City’s fiscal projections to be more accurate and represent current fiscal expectations for FY 2021-22.
Fiscal Analysis:
The recommended adjustments to both General Fund revenue and expenditure budgets for FY 2021-22 allow for a continued balanced budget with a revised surplus of $30,317.
Attachment:
1. Detailed Recommended Budget Adjustments
Revenue
Adopted Budget $ 12,643,689
Projected Increase $ 696,500
Revised Revenue $ 13,340,189
Expense
Adopted Budget $ 12,638,086
Approved Supplemental Appropriations (first half) $ 344,706 Increase related to Labor Negotiations for PD and Fire 266,390 Increases related to Revisions to Mgmt Compenstion Plan 72,066 Film Commission support 6,250
Proposed Expense (Appropriation) Adjustments by Dept. $ 327,080 City Manager 1,472
Economic Development 17,576
Finance (5,663)
Information Technology 5,000
General Services 20,979
Police 75,972
Public Safety Dispatch 10,721
Fire 79,386
Planning and Zoning 25,500
Building (19,684)
Public Works and Engineering (1,554)
Facilities and Parks 111,000
Fleet 23,375
General Debt (13,000)
Homeless Services (4,000)
Proposed Revised Expense $ 13,309,872
Revised Surplus (Revenue Less Expense) $ 30,317
Adopted Budget Surplus (for reference) $ 5,601