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CR 01-024 2000 Budget Reallocation, Carryovers, Additions and New Fund February 20, 2001 \ "{ y 0 ~ 1- ~ o P K \ ~. Council Report 01-024 u. ~ 2000 Budget Reallocations, Carryovers, Additions and New Fund Proposed Action Staff recommends adoption of the following motion: Move to approve the recommended budget reallocations in 2000, to carry over budgets into 2001 in order to complete proiects originally budgeted in 2000, to increase the general fund revenue and expenditure budgets by unbudgeted revenues received by the Activity Center and Police department and to create a new Capital Improvement fund. Adoption of this motion will result in the reallocation of the 2000 budget to offset actual costs, carry over budget into 2001 to complete projects budgeted in 2000 and increase the budget by new revenue sources. The various budget allocations, carryovers and increases are described in the attachment. Overview The preliminary 2000 year-end figures conclude that the general fund budget is currently under budgeted expenditures by approximately $250,000and that revenues exceed expenditures by about $250,000. The City of Hopkins Charter states that the city council may authorize the transfer of sums from unexpended balances to other purposes. Primary Issues to Consider . Actual general fund expenditures are under budget by approximately $250,000. . Purchases made in the various departments were authorized purchases. . Authorization to transfer budget is an in-house cleaning item that is being done to follow city charter and to facilitate accurate year-end reporting. . The Activity Center and the Police department have increased revenues by providing additional services or grant applications. . The city is in need of a capital improvement fund with less restrictions on spending. Recommendation Finance recommends increasing the Activity Center revenue and expenditure budgets' by $50,000 each, which is a net zero effect. Increase the Police' revenue and expenditure budgets by $30,000 each, which is a net zero effect. Reallocate the 2000 budget to actual expenditure items. Carry over requested amounts from the 2000 budget into the 2001 budget to complete planned projects. Establish a capital improvement fund with excess revenue in the general fund. I SEE ATTACHMENT FOR BUDGET CHANGES AND AFFECTS. Supportin2 Information Detail Budget Reallocations and Carryovers ~~om~CitY Charter Lori K. Yager r Finance Director Council Report 01-024 Page 2 Requested budget carryovers, reallocations and additions Preliminary results of year-end operations conclude that the general fund budget is under proj ected expenses by approximately $250,000. This authorizes the city to carryover unspent budget amounts from 2000 into 2001 to complete specific projects that for various reasons, were not completed in 2000. Carryovers Requested · $2,000 from the Police budget to be used in 2001 to pay for uniforms for the dispatch crew according to employee contract. · $4,000 from Miscellaneous Community Inspections part-time budget to be used in the year 2001 for temporary part-time individual to assist with scanning permanent records into electronic storage. · $12,600 from the 2000 Contingency budget into the 2001 Street Lighting budget for signal pole and lighting replacement inventory. · $2,500 from the Community Development budget to be used in 2001 for expert and professional services in the East End land use and market analysis. · $5,500 from the Activity Center budget to be used in 2001 for wall covering. · $8,500 from the Cable TV budget for the purchase of camera and related equipment for use in the council chambers. · $55,100 from the Housing Rehabilitation fund for the completion of the Valley Park Condo project. · $6,890 from the Housing Rehabilitation fund for the completion of the Patio Homes II project. The above carryover requests will reduce the associated budgets in 2000 and increase the budget in 2001. The total amount of carryovers requested from the general fund are, $26,600. This leaves the unspent general fund budget balance at approximately $220,000 after all adjustments. Bud2et Reallocations Requested · Reallocate $20,000 of contingency budget to the Council department to cover the vision and mission process expenditures. · Reallocate $20,000 of contingency budget to the Police department to cover upgrade of 911 equipment and the police/fire space needs analysis. · Reallocate $7,500 of contingency budget to transfers out to cover the partnership agreement to transfer $5,000 to the Depot Coffee House and $2,500 in additional needs for the Para Transit fund. Council Report 01-024 Page 3 The above budget reallocations will come from the contingency budget. These adjustments do not increase the cities overall general fund budget they merely reallocate the 2000 budget. Additional budget needs The Activity Center increased its' overall revenues by $50,000 and at the same time incurred costs associated with the increase in revenues. A budget adjustment in both revenue and expenditures is required for this additional activity. The Police department aggressively applied for grants and increased its' revenue by $30,000. The additional revenues are to be applied to various expenses within the police department. A budget adjustment in both revenues and expenditures is needed to cover 2000 police expenditures. The Economic Development fund received a grant from the Met Council in the amount of $737,958. The proceeds were used in a development cleanup project. A budget adjustment in this fund is needed for revenues and expenditures. Tax increment fund district 1-1 a budget adjustment for unbudgeted professional services is needed with increased tax increments revenues covering these costs. The amount is $6,000. The Para Transit fund had additional revenues from the State and from the city and needs budget adjustments to cover additional expenditures of $25,000. Tax increment fund district 2-1 (R.L. Johnson) requires a budget adjustment for a higher note payment of$II,OOO and a higher transfer for debt service of$II,OOO. The increased expenditures are covered by increased tax increment revenues. Tax increment fund district 2-8 (Thermotech) requires a budget adjustment of$3,500 for a higher note payment. Increased tax increment revenues cover this increase. Tax increment fund district 2-9 (Oaks of Mainstreet) requires a budget adjustment of $23,000 for administration charges. Increased tax increment revenues cover this expense. Attached is a detailed list of all the budget adjustments, carryovers and additions. Establish New Capital Improvement Fund Finance is recommending that the council consider establishing a capital improvement fund for improvement needs not covered within the other capital improvement funds. The current source of income for this fund would be excess revenues over expenditures from the general fund. The excess revenues' over expenditures, in the general fund, is approximately $240,000. This amount could change during the preparation of the Comprehensive Annual Financial Report. Finance is recommending an equity transfer in the amount of $1 00,000 to start the new capital improvement fund. Currently the city has only three capital improvement funds. The first is a park improvement fund with fees derived from new development in the city. This fund is used for park and recreation improvements. The second is a State Aid improvement fund with revenues coming from the state Council Report 01-024 Page 4 for state aid construction projects in the city. This fund is used for state aid projects. The third is the PIR fund which derives its revenues from assessments and taxes. This fund is used for improvement projects that are associated with assessable improvement projects. A new fund would facility improvements other than those already covered in the current improvement funds. -.. ,.. '. Section 7.06. ENFORCEMENT OF THE BUDGET. Except as set forth in Section 7. 1 6, the City Manager or the City Council shall not approve any expenditure uncovered by the budget. The City Council may, approve expenditures uncovered by the budget if there is sufficient unexpended balance left after deducting the total past expenditures and the sum of all outstanding bills, orders and encumbrances. No employee of the City shall place any orders or make any purchases except for the purpose and to the amounts authorized in the budget. Except as in this Charter otherwise provided, any obligations incurred by any person in the employ of the City for any purpose not authorized in the budget or for any amount in excess of the amount therein authorized shall be a personal obligation upon the person incurring the expenditure. Section 7.07 . ALTERATIONS IN THE BUDGET. Except as set .forth in Section 7.16, after the budget shall have been duly adopted, the Council shall not have power to increase the amounts therein fixed, whether by the insertion of new items or otherwise, beyond the estimated revenues, unless the actual receipts shall exceed such estimates, and in that event not beyond such actual receipts. The sums fixed in the budget are appropriated at the beginning of the fiscal year for the several purposes named therein. The Council may reduce ~alaries or the sums appropriated for any other purpose, or authorize the trans-fer of sums from unexpended balances to other purposes. Explainations for Carry over from 2000 to 2001 Amount Dispatch uniform needs Records retention intern Lighting and signal pole replacements East End land use and marketing analysis Activity Center wall covering Camera and equipment for the Council Chambers Valley Park Condo project completion Patio Home project completion $2,000 $4,000 $12,600 $2,500 $5,500 $8,500 $55,100 $6,890 Page 1 Explainations for General Fund Budget Transfer Requests Vision and Mission preparation Upgrade of 911 equipment Police and Fire space study Depot Coffee house partnership donation agreement Additional funding for Para Transit Offset against contingency account Establish Capital Improvement Fund Offset general fund equity Any other transfers are within departments and do not require council approval. Page 1 Amount $20,000 $8,000 $12,000 $5,000 $2,500 ($47,500) $100,000 ($100,000) Explainations for Increased Budg t Requests Amount Increased Police Grants Activity Center Charges for Services Economic Development Grant Increased Tax Increment Increased Para Transit State Grant $30,000 $50,000 $737,958 $54,500 $25,000 Page 1