HomeMy WebLinkAbout12/05/2017 10 Unappropriated Funds Appropriations; Budget AmendmentBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
1
Item No. 10.
For Meeting of: December 5, 2017
ITEM TITLE: Ordinance amending the 2017 Budget and making appropriations
from unappropriated balances for expenditure during 2017 (First
Reading)
SUBMITTED BY: Tara Lewis, Financial Services Manager
SUMMARY EXPLANATION:
Year End Estimate Appropriation to the 2017 Amended Budget (Schedule I)
The development of the 2018 Preliminary Budget required an analysis of the 2017 revenue and
expenditure estimates. Several instances were noted where additional appropriation is warranted
to cover the year end estimated expenditures as presented. There is some additional revenue to
support these additional General Government expenditures either in program revenues, transfers
or grants. It is anticipated that any impact on the estimated year end General Government
reserves as a result of this appropriation will be insignificant. Non -General Government funds
impacted either have sufficient revenues or fund balances over required minimums to cover the
impact of this appropriation. These expenditures and the associated revenues were included in
the Year End Estimated data presented during the Council Budget Presentations in mid-October.
Appropriations are requested to bring the 2017 Amended Budget into alignment with the Year
End Estimated expenditures presented at the Council Budget Presentations as follows:
General Fund
Mid -year insurance assessment funded by utility
tax revenues realized above current budget level.
$ 185,000
Streets and Traffic
Fund
LED Street Light Project cost is above the original
expected amount and is funded by additional
revenue from rebates and bond proceeds.
861,000
Emergency Fund
Mid -year insurance assessment from fund balance.
8,600
Public Safety Comm
Mid -year insurance assessment funded primarily
by excess dispatch revenues.
72,100
Police Grants
Taskforce costs funded by confiscated property.
65,000
Trolley
Grant expenditures and associated revenue. Grant
was obtained after the 2017 Budget was
28,000
2
Schedule I (attached) appropriates the above items to the 2017 budget, which increases
authorized expenditures Citywide by as much as $3,384,600, while the revenue budget will
increase by $2,486,100, with a net use of non -general government available fund balances of
$898,500. These appropriations represent necessary adjustments to the 2017 Amended Budget
to bring it into alignment with the year-end estimates that were presented to Council in the recent
study sessions on the 2018 Budget. This appropriation serves to amend the budget to cover the
expenditures presented that were unforeseen at the time the 2017 Budget was prepared and
Tater adjusted in April 2017.
Fire Capital, Benefit and Insurance Reserves (Schedule II)
The Fire Capital fund was originally budgeted to borrow $2 million in 2017 to finance two new fire
apparatus, other equipment and improvements including a storage building. Due to constraints of
external financing the decision was made to postpone any potential external borrowing during
2017. As such, the Fire Capital fund borrowed $1.1 million from the Vehicle Replacement
Reserve to fund the two fire apparatus and held off other capital expenditures. The Fire Capital
fund balance is currently in a negative position since no bond proceeds were received.
(Accounting regulations do not allow the recording of bond proceeds revenue when borrowing
money internally, thus the borrowing fund's fund balance goes down by the amount of the
expenditure. When borrowing is done externally, bond proceeds revenue offsets the capital
expenditure amount and the net impact to the fund balance is initially zero. This effectively
spreads the principal and interest payment expenditures over the life of the external borrowing by
the repayment schedule. With internal borrowing the entire expenditure is recognized immediately
and only interest paid is recorded in future periods as the loan is repaid.) Additional appropriation
is being requested to cover any potential amount that the General Fund can transfer into the Fire
Capital fund to restore the fund balance used to finance the fire apparatus. Generally, the Fire
Capital fund is wholly supported by the General Fund. However, most such transfers to capital
funds have been minimal in recent years to aid in rebuilding the General Fund reserve.
Accordingly, no transfer will be made unless revenues exceed the Year-end Estimate presented
during the Council Budget study sessions.
completed.
Capitol Theatre
Mid -year insurance assessment from fund balance.
8,400
Refuse Fund
Mid -year insurance assessment from fund balance.
31,500
Unemployment Fund
Transfer of excess fund balance to Workers
Compensation Fund.
400,000
Workers Compensation
Large claims that were unknown at the time of the
2017 Budget preparation. Assessed revenues and
transfer from Unemployment Fund offset this
expenditure.
825,000
Health Fund
Unusual large claim experience during the year.
Partially covered by stop loss insurance recoveries
(approximately 30%). Fund Balance was used to
cover these expenditures and will need to be
replenished by additional assessments when
possible.
900,000
Schedule I (attached) appropriates the above items to the 2017 budget, which increases
authorized expenditures Citywide by as much as $3,384,600, while the revenue budget will
increase by $2,486,100, with a net use of non -general government available fund balances of
$898,500. These appropriations represent necessary adjustments to the 2017 Amended Budget
to bring it into alignment with the year-end estimates that were presented to Council in the recent
study sessions on the 2018 Budget. This appropriation serves to amend the budget to cover the
expenditures presented that were unforeseen at the time the 2017 Budget was prepared and
Tater adjusted in April 2017.
Fire Capital, Benefit and Insurance Reserves (Schedule II)
The Fire Capital fund was originally budgeted to borrow $2 million in 2017 to finance two new fire
apparatus, other equipment and improvements including a storage building. Due to constraints of
external financing the decision was made to postpone any potential external borrowing during
2017. As such, the Fire Capital fund borrowed $1.1 million from the Vehicle Replacement
Reserve to fund the two fire apparatus and held off other capital expenditures. The Fire Capital
fund balance is currently in a negative position since no bond proceeds were received.
(Accounting regulations do not allow the recording of bond proceeds revenue when borrowing
money internally, thus the borrowing fund's fund balance goes down by the amount of the
expenditure. When borrowing is done externally, bond proceeds revenue offsets the capital
expenditure amount and the net impact to the fund balance is initially zero. This effectively
spreads the principal and interest payment expenditures over the life of the external borrowing by
the repayment schedule. With internal borrowing the entire expenditure is recognized immediately
and only interest paid is recorded in future periods as the loan is repaid.) Additional appropriation
is being requested to cover any potential amount that the General Fund can transfer into the Fire
Capital fund to restore the fund balance used to finance the fire apparatus. Generally, the Fire
Capital fund is wholly supported by the General Fund. However, most such transfers to capital
funds have been minimal in recent years to aid in rebuilding the General Fund reserve.
Accordingly, no transfer will be made unless revenues exceed the Year-end Estimate presented
during the Council Budget study sessions.
3
As previously reported and discussed in the mid -year financial report, neither the Risk
Management Fund nor the Health Benefit Fund had adequate reserves to meet state
requirements at the end of 2016. The General Fund budget did not have sufficient appropriation
to transfer additional funding in 2016 and reserve adjustments for these funds were not included
in the development of the 2017 budget. Modest increases in assessments to all City
departments and divisions that are serviced by these funds have been included in the 2018
Preliminary Budget to avoid future use of reserves and the exacerbation of this underfunded
status. However, to rebuild reserves to state -required levels it is necessary to do supplemental
transfers if possible.
These Schedule I I transfers will be completed only to the extent of available resources within the
paying funds. As the exact amount of available resources will not be determined until the
accounting records are closed after December 31, 2017, the appropriation being requested is
set at an amount that is most likely larger than will be actually expended. Due to resource
constraints it is unlikely that the full appropriation will be used, but since there will be no further
opportunity to increase the appropriation, the highest possible amount is now being requested. In
other words, if a given fund does not realize sufficient revenues and if that same fund does not
have adequate reserves to cover its allocation of this appropriation in full, the transfer amount
(actual expenditure) will be limited to the excess revenues and excess fund balances available.
General Government reserves will not be used to fund these appropriations. As such the reserve
balance will not fall below the Year-end Estimated reserve balance presented at the Budget study
sessions due to these Schedule I I appropriations.
Appropriations for year-end assessment for transfer to Fire Capital, Health and Risk
Management Funds to be paid from potential excess revenues &/or available fund balances are
requested as follows:
General Fund
Other Funds
The attached appropriation adds these potential items to the 2017 budget, which increases
authorized expenditures Citywide by as much as $1,679,145. These appropriations are in
addition to the year-end estimates that have been presented to Council in various study
sessions. This appropriation serves to amend the budget to allow the expenditures presented to
the extent of excess current revenues in General Fund and excess revenues or fund balances in
other funds to make the additional transfers to rebuild fund balance reserves as listed in
Schedule I I.
ITEM BUDGETED:
NA
STRATEGIC PRIORITY: Public Trust and Accountability
APPROVED FOR
SUBMITTAL:
STAFF RECOMMENDATION:
City Manager
4
Read Ordinance by title only at the December 5, 2017 meeting. Pass Ordinance after second
reading at the December 12, 2017 meeting.
BOARD/COMMITTEE RECOMMENDATION:
ATTACHMENTS:
Description
2017 Budge A -ndment Ordinance
Appropriation Schedule I and II
Upload Date
11/20/2017
11/20/2017
Type
Ordinance
Exhibit
AN ORDINANCE
ORDINANCE NO. 2017 -
amending the 2017 budget for the City of Yakima; and making
appropriations from Unappropriated Fund Balances within
various funds for expenditure during 2017 for various purposes
described in the attached Schedules.
WHEREAS, the various funds indicated on the attached Schedule I and Schedule
11 contain Unappropriated Fund Balances available for appropriation and expenditures
during 2017 in various amounts and for the purposes mentioned in the attached
Schedules, and
WHEREAS, at the time of the adoption of the 2017 budget it could not reasonably
have been foreseen that the appropriation provided for by this ordinance would be
required; and the City Council declares that an emergency exists of the type contemplated
by RCW 35.33.091 and that it is in the best interests of the City to make the appropriation
herein provided, now, therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA:
Section 1. Appropriations are hereby made, for expenditure during 2017, from
Unappropriated Fund Balances in the various Funds to the various accounts and in the
various amounts, and for the various specific purposes, all as specified in Schedule I and
Schedule 11 attached hereto and incorporated herein.
Section 2. This ordinance is one making an appropriation and shall take effect
immediately upon its passage, approval and publication as provided by law and by the
City Charter.
PASSED BY THE CITY COUNCIL, signed and approved this day of
, 2017
ATTEST:
KATHY COFFEY, MAYOR
CITY CLERK
First Reading:
Publication Date:
Effective Date:
5
City of Yakima
2017 Appropriation Schedule
SCHEDULE I - Year End Estimate adjustments to 2017 Budget Appropriation
Appropriate out of unappropriated fund balances of the various funds and in the various
amounts and for the purposes as described:
6
ACCOUNT
AMOUNT FUND TOTAL DESCRIPTION
GENERAL FUND
001 2244196 City Hall Facility Maint $ 12,050
001 3194196 Police Administration 126,170
001 3294196 Fire Administration 46,780
Total Expenditures $ 185,000
Revenue
001 8951602
001 8951605
Total Revenues
Net Use of Fund Balance
STREETS & TRAFFIC ENG FUND
141 4326300
Total Expenditures
Revenue
141 8959101
Total Revenues
Net Use of Fund Balance
EMERGENCY SERVICES
150 3270055
Total Expenditures
Net Use of Fund Balance
PUBLIC SAFETY COMMUNICATIONS
151 3432310
151 3434196
154 3411200
154 3414300
Total Expenditures 72,100
Mid -year insurance assessment
177,500 Electric Utility Tax
7,500 Gas Utility Tax
185,000
861,000
861,000
LED Lighting Project
861,000 Additional Bond Proceeds and rebates - LED Project
861,000
8,600 Dispatch services charged for additional call volume
8,600
8,600
6,600 Mid year insurance assessment
7,400 Mid year insurance assessment
53,500 Overtime incurred due to unfilled positions
4,600 Transportation
Revenue
154 8953834 72,100
Total Revenues 72,100
Net Use of Fund Balance
POLICE GRANTS
152 3091200 65,000
Total Expenditures 65,000
Revenue
152 8956903
Total Revenue
Net Use of Fund Balance
65,000
65,000
TROLLEY
162 2064800 28,000
Total Expenditures 28,000
Revenue
162 8953459
Total Revenue
Net Use of Fund Balance
28,000
28,000
Schedule I
Dispatch services revenue
Taskforse and Emphasis Overtime
Confiscated property
Restoration costs
Washington State Heritage Grant
City of Yakima
2017 Appropriation Schedule
SCHEDULE I - Year End Estimate adjustments to 2017 Budget Appropriation
Appropriate out of unappropriated fund balances of the various funds and in the various
amounts and for the purposes as described:
7
ACCOUNT
AMOUNT FUND TOTAL DESCRIPTION
CAPITOL THEATRE
171 2714196
Total Expenditures
Net Use of Fund Balance
REFUSE
471 4794196
Total Expenditures
Net Use of Fund Balance
UNEMPLOYMENT FUND
512 1820055
Total Expenditures
Net Use of Fund Balance
WORKERS COMPENSATION FUND
514 1782320
Total Expenditures
Revenue
514 8950050
514 8956651
Total Revenue
Net Use of Fund Balance
HEALTH FUND
513 1742560
Total Expenditures
Revenue
513 8956649
Total Revenue
Net Use of Fund Balance
8,400
31,500
8,400
8,400
31,500
31,500
Mid year insurance assessment
Mid year insurance assessment
400,000 Transfer to Workers Compensation Fund
400,000
400,000
825,000 Large multi-year claim reverted to City (former firefighter claim)
825,000
400,000 Transfer from Unemployment Fund
425,000 Additional internal assessment
825,000
900,000 Unprecedented large claim activity net of stoploss reimbursement
900,000
450,000 Year-end assessment of medical budgeted in vacant positions
450,000
450,000
Schedule I
City of Yakima
2017 Appropriation Schedule
SCHEDULE II - Additional Appropriations for Fire Capital, Health and Risk Management Fund Reserves
Appropriate out of unappropriated fund balances of the various funds and in the various
amounts and for the purposes as described:
8
ACCOUNT
MAXIMUM MAXIMUM
AMOUNT TRANSFER
DESCRIPTION
Fund
001 6010055 General Fund $ 302,310
150 3222510 Emergency Services 7,881
151 3442510 Public Safety Comm 911 11,629
154 3412510 Public Safety Comm 9,294
153 3402510 Comm Dispatch CJ .3 1,491
471 4722510 Refuse 11,067
Total Expenditures $
Fund
001 6010055 General Fund $ 228,336
150 3274196 Emergency Services 9,112
151 3434196 Public Safety Comm 911 10,340
170 2784196 Convention Center 10,163
171 2714196 Capitol Theatre 11,743
421 2864196 Airport 20,492
471 4794196 Refuse 45,288
Total Expenditures $
Fund
001 6010055 General Fund
Total Expenditures
Revenue
General Fund revenue
Various Funds
Total Revenue
Net Use of Fund Balance
$ 1,000,000
1,530,645
148,500
Year-end Health Fund Reserve maximum assessment
Mid -year insurance assessment
343,672 Maximum Additional Transfer to Health Fund Reserve
Year-end Risk Management Fund maximum assessment
335,473 Maximum Additional Transfer to Risk Management Reserve
Fire Capital Fund Balance - potential restoration
$ 1,000,000 Maximum Additional Transfer to Fire Capital Fund
1,679,145
Schedule II
Net revenue over Year End Estimate if realized
Excess Revenue (or Fund Balance) as available
Fund balance in non -general government funds may be used
if excess is available