City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00938 8/15/2023 Consent Item 3.
Rescinding Resolution 2023-0105 and Approving the Establishment of a Multi-Year Operating Project (MYOP) for the Community Reinvestment (CNRA) Pass Through Projects and the Transfer of Revenue and Expenditure Budgets from Capital Improvement Project (CIP) L19001400 (Fund 3704) to MYOP I19101400 (Fund 2702)
File ID: 2023-00938
Location: Citywide
Recommendation: Adopt a Resolution 1) Rescinding Council Resolution 2023-0105, 2) Establishing the Community Reinvestment Grant MYOP (I19101400) effective May 2, 2023, and 3) Reducing the revenue and expense budget in the Community Reinvestment Subrecipient CIP Project (L19001400) (Fund 3704) by $15,650,000 and establishing revenue and expense budgets in I19101400 (Fund 2702) by $15,650,000 to be recorded in Fiscal Year (FY)2022/23.
Contact: Ray Rodriguez, Support Services Manager, (916) 808-1040, [email protected], Barbara Smith, Administrative Officer (916) 808-5762, [email protected], Department of Youth, Parks & Community Enrichment Presenter: None.
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: The 2021-22 State Budget (SB 170) included a total of $35.3 million in appropriations for programs and projects within the City of Sacramento. In May 2022, Council approved Resolution No. 2022-0151 approving grant agreements for $23.5 million including $15.65 million for pass through funding for external subrecipient project grants. The Resolution also approved the establishment of a CIP and revenue and expenditure budgets in L19001400. Various child projects were then established for the CNRA pass through grant subrecipients.
However, subsequent extended discussions between City Accounting and Budget recognized that the pass through subrecipient grant funds should be held in a MYOP rather than a CIP as CIPs are specifically for City capital assets. It was determined that a new MYOP should be established with
File ID: 2023-00938 8/15/2023 Consent Item 3.
child projects for each grant subrecipient, replacing L19001400 and the related child projects. The established revenue and expense budget of $15.65 million including any expenses already incurred would be moving to I19101400.
However, R2023-0105 missed the reclassification of the fund from Fund 3704 to 2702. Therefore R2023-0105 needs to be rescinded and a new resolution created that includes the language that reduces the revenue and expense budgets in L19001400 (Fund 3704) and establishes the revenue and expense budgets in the amount of $15,650,000 in the I19101400 (Fund 2702). These changes need to be completed in FY2022/23 in order for fund balances to reflect accurately in FY2022/23 year-end reporting.
Policy Considerations: Per Resolution 2022-0198 Section 13.2, City Council approval is required to establish a MYOP. Section13.9, requires Council approval for any budget appropriations exceeding $250,000.
Economic Impacts: None.
Environmental Considerations: Not applicable.
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: After careful review by City Budget and Accounting, it was determined that the appropriate project for this type of grant and for reporting purposes would be a MYOP instead of a CIP as these projects will not result in being City assets. Similarly, Other Capital Grants Fund (Fund 3704) are only used for CIPs. With the project type change, the fund needs to be reclassified as well. The appropriate fund would be the Operating Grant Fund (Fund 2702). Without this change, the funding would be in the incorrect project type and fund and result in incorrect reporting for Accounting.
Financial Considerations: $15,650,000 in Funding for the CNRA grants is currently held in L19001400 and will be moved to I19101400. The funding type needs to be reclassified from Other Capital Grants Fund (Fund 3704) to Operating Grant Fund (Fund 2702). Expenditures already processed in L19001400 will be moved to I19101400.
Local Business Enterprise (LBE): Not applicable
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
Rescinding Resolution 2023-0105 and Approving the Establishment of a Multi- Year Operating Project (MYOP) for the Community Reinvestment Grant (CNRA) and the Transfer of Revenue and Expenditure Budgets from Capital Improvement Project (CIP) L19001400 (Fund 3704) to MYOP (Fund 2702).
BACKGROUND
A. Resolution 2022-0151 approved $23.5 million in Grant Agreements for Community Reinvestment Projects and Lower American River Parkway Projects, with 18 agencies and non-profit agencies designated to receive portions of the.
Grant funds totaling $15,650,000.
B. The Resolution also approved the establishment of revenue and expenditure budgets and City capital improvement projects (CIPs) for these grants.
C. Per the Resolution, CIP L19001400 with a budget of $15,650,000 (Fund 3704) was created with child projects, each with an expenditure and revenue budget, for each of the Community Reinvestment and Lower American River Parkway Access Improvements Grants.
D. After careful review by City Budget and Accounting, it was determined that the funding should have gone into a MYOP instead of a CIP as not all the projects are capital assets; Resolution 2023-0105 approved the change in the projects form MYOPs to CIPs, but overlooked the requisite change from Fund 3704, a fund specified for CIPs, to Fund 2702.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1
Rescinding R2023-0105 due to missing the reclassification of the fund.
Section 2
The City Manager or the City Manager’s designee is authorized to establish MYOP I19101400 for the Community Reinvestment and Lower American River Parkway Access Improvements Project Grants, effective May 2, 2023.
Section 3
The City Manager or the City Manager’s designee is authorized to reduce the revenue and expense budget in L19001400 (Fund 3704) by $15,650,000 and establish revenue and expense budget in I19101400 (Fund 2702) by $15,650,000, to be recorded in Fiscal Year 2022/23.