CR 06-045 2005 Year-End Budget Adj
April 12, 2006
Council Report 2006-045
2005 Year-End Bndget Adjustments
Proposed Action
Staffreconnnends adoption of the following motion: Move to approve the reconnnended 2005 Year-
End Budget Adiustments.
Adoption ofthis motion will result in the adjustment of the 2005 budget to offset actual revenues and
expenditures, and to set budgets for new funds established in 2005 due to new projects and bond sale.
Overview
The preliminary 2005 year-end figures conclude that the general fund ended the year with revenues
exceeding expenditures by about $225,358. The City of Hopkins Charter states that the city council
may authorize the transfer of sums from unexpended balances to other purposes.
Primarv Issues to Consider
. Actual general fund expenditures are under budget by approximately $88,757,
. Actual general fund revenues were over budget by approximately $92,266.
. Fund balance coverage in the General Fund is 47%, which covers 5.64 months of
expenditures. City policy reconnnends a 40% annual expenditure coverage.
Recommendation
Finance reconnnends the proposed 2005 year-end budget adjustments to recognize additional revenues
and the related expenditures in various funds as shown in the attached and to provide additional funds
to the Equipment Replacement Fund to assist the fund in recovering from 2003 and 2004 budget
reductions.
I SEE ATTACHMENT FOR BUDGET CHANGES AND EXPLANATION.
Supportin2 Information
Detail 2005 Year-End Budget Adjustments
Section 7.06 and 7.07 from City Charter
Christine M Harkess, CPA, CGFM
Finance Director
Council Report 2006-045
Page 2
Bud2et Adiustments
The General Fund as stated previously ended the year with a $225,358 net increase in fund balance.
Much of the budgeted contingency was not needed or used in 2005. Staff is reconnnending that
$137,492 of the unspent contingency that totals $178,774 be redirected to the Skate Park Fund
($37,492) to close out that fund and to the Equipment Replacement Fund ($100,000) for use in future
equipment needs and to assist the fund in rebuilding the fund balance following two years of budget
reductions. In addition, a fire grant was received for a hazard house therefore the revenues and
expenditures in that department need to be adjusted for the grant.
Chemical Assessment Team - The chemical assessment team received a $45,000 federal grant,
therefore revenues and expenditures need to be adjusted for that grant.
Tax increment district 1-2 (Entertaimnent) requires a budget adjustment of$75,000 for the annual write
off of the development loan per the development agreement, which required the developer to meet
certain criteria.
Tax Increment 2-7 (Thermotech) - This fund was decertified and closed however there were
unbudgeted expenses in 2005 therefore the budget needs to be adjusted for those expenditures.
Block 64 Development - This is a new project that was started in 2005. At the time the 2005 budgets
were prepared this fund was not in existence therefore no budget was prepared.
Bond Funds (4) - These funds were created upon the sale of bonds in November 2005. Budgets need
to be established for these four debt service funds.
2005 Budaet Adjustments
Revenue
General Fund
101-42840-330 Federal Grants
101-42830-790 Fire - Other Equipment
Increase budget for fire grant received for Hazard House
19,791.00
101-40100-930 Transfer Out
101-40100-670 Contingency
Adjust budget for transfer to Skate Park to cover
expenses incurred and to close fund into General Fund
101-40100930 Transfer Out
101-40100-670 Contingency
Increase budget for transfer to equipment replacement fund
Chemical Assessment Team
203-42850-330 Federal Grant
203-42850-790 Other Equipment
Increase budget for federal grant received
45,000.00
Tax Increment 1-2
211-46518-616 Construction Costs
10% Beard Loan write-off per development agreement
Tax Increment 2-7
227-46530-490 Transfer In 1,855.00
227-46530-622 Intergovernmental Fees
Increase budget for 2005 revenues and expenditures that were
not budgeted due to impending closure of fund. Fund had transactions
in 2005, therefore budget needed to be adjusted.
Block 64 Development
232-46541-389 Development Fee 147,000.00
232-46541-582 Expert & Professional Services
232-46541-588 Legal Services
Increase budget for 2005 revenues and expenditues that were not
bUdgeted due to creation of new project after 2005 budget was
adopted.
2005A GO TIF Refundina -1996C
431-47304-370 Interest Earned
431-47304-460 Proceeds from sale of bond
431-47304-582 Expert and professional services
Set up budget for new fund established in November 2005 due to bond sale
3,800.00
504,000.00
Expense
19,791.00
37,492.00
(37,492.00)
100,000.00
(100,000.00)
45,000.00
75,000.00
1,855.00
107,000.00
40,000.00
5,700.00
2005A GO TIF Refundino -1997
432-47304-370 Interest Earned 8,500.00
432.47304-460 Proceeds from sale of bond 1,123,000.00
432.47304.582 Expert and professional services 12,700.00
Set up budget for new fund established in November 2005 due to bond sale
2005B GO TIF Refundino -1997
433.47305.370 Interest Earned 10,000.00
433-47305.460 Proceeds from sale of bond 1,300,000.00
433-47305.582 Expert and professional services 17,500.00
Set up budget for new fund established in November 2005 due to bond sale
2005B GO TIF RefundinQ -1996D
434-47305-370 Interest Earned 3,300.00
434.47305.460 Proceeds from sale of bond 434,000.00
434.47305.582 Expert and professional services 5,700.00
Set up budget for new fund established in November 2005 due to bond saie
.
..
.
I
.
I
I
I
I
..
I
I
I
I
I
I
I.
I
I
CHAPTER 7
TAXATION AND FINANCES
Section 7.01. COUNCIL TO CONTROL FINANCES. Except as otherwise provided in this Charter,
the Council shall have full authority over the financial affairs of the City.
Section 7.02. FISCAL YEAR. The Fiscal year of the city shall be the calendar year.
Section 7.03. BOARD OF EQUALIZATION. The Council shall constitute the Board of Equalization
and shall meet as such in the usual place for holding Council Meetings not later than June I of each
year to equalize the assessments according to law, or at such other adjourned meetings as it may
designate.
THE BUDGET
Section 7.04. PREPARATION OF THE ANNUAL BUDGET. The annual budget shall provide a
complete financial plan for the budget year by fund, showing all proposed expenditures and estimates
of all anticipated revenues applicable to proposed expenditures and any other information the Council
may require or the City Manager may deeni desirable. In parallel columns shall be shown the
amounts, if any, granted and expended under similar heads for the past two complete fiscal years and,
as far as possible, for the current year. The Council may include or exclude at its discretion any fund,
except the general fund. The budget shall be submitted to the Council at a regular Council meeting, in
a manner prescribed by state statute, not less than 30 days prior to final approval. It. shall be a public
record open to public inspection by anyone and the City Manager shall cause sufficient copies thereof
to be prepared for distribution to the Mayor, members of the Council and interested persons.
Section 7.05. PASSAGE OF THE BUDGET. The Council shall hold a public hearing on the budget
and it shall make such changes therein as it deems necessary and adopt the budget by Resolution.
21
J
,"*
I
I
I
I
I
I
I
I
r
,
I
I
I
I
i
-
,
I
j.
;
I
,
I
j-;-
~
I.
. ."~
,
,
-
Section 7.06. ENFORCEMENT OF THE BUDGET. Except as set forth in Section 7.16, 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 blldget are appropriated at the beginning of the fiscal year for the several purposes
named therein. The Council may reduce salaries or the sums appropriated for any other purpose, or
authorize the transfer of sums from unexpended balances to other purposes.
TAXES
Section 7.08. LEVY AND COLLECTION OF TAXES. On or before the last regular meeting in
December each year the Council shall levy the taxes necessary to meet the requirements of the budget
for the ensuing fiscal year. The City Manager shall transmit to the County Auditor annually a
statement of all the taxes levied, and such taxes shall be collected and the payment thereof be enforced .
with and in like manner as State and County taxes. No tax shall be invalid by reason of any
informality in the manner oflevying the same, nor because the amount levied shall exceed the amount
required to be rinsed for the special purpose for which the same is levied, but in that case the surplus
shall go into the fund to which such tax belongs.
Section 7.09. TAX SETTLEMENT WITH COUNTY TREASURER. The City Manager shall
ascertain that all monies in the County Treasury belonging to the City are properly transferred to the
City according to law. '
DISBURSEMENTS
Section 7.10. DISBURSEMENTS. Disbursement of city funds shall be made by a negotiable
instrument bearing the actual or authorized facsimile signature of the authorized city officer. No such
negotiable instrument shall be issued until the claim to which it relates has been supported by an
itemized bill, payroll, time-sheet, voucher or the like approved and signed by the responsible city
officer who vouches for its correctness and reasonableness. No check shall be issued until there is
money to the credit of the fund out of which it is to be paid sufficient to pay the same. The council
may by ordinance make further regulations for the safekeeping and disbursements of the funds of the
city.
22