City Council Meeting: November 13, 2007

Agenda Item: 8-B

To: Mayor and City Council

Chairperson and Redevelopment Agency Members

Chairperson and Parking Authority Members

From: Carol Swindell, Director of Finance

Subject: FY2006-07 Year-End Appropriations and Budget Adjustments and Transmittal of Capital Improvement Program and Year-End Departmental Performance Review Status Reports

Recommended Action

Staff recommended budget actions for Year-End 2006-07:

1. City Council authorize the City Manager to make budget expenditure adjustments between departments and major account groups within funds; and

2. City Council, Redevelopment Agency and Parking Authority approve year-end budget appropriations to departments as shown in Exhibit A.

Executive Summary

The actions requested of Council, the Redevelopment Agency and Parking Authority in this report are requested at year-end in various City funds to match budgets with actual expenditures. The FY2006-07 fiscal year ended on June 30, 2007 and is currently being audited by the independent CPA firm Mayer Hoffman McCann. The final Comprehensive Annual Financial Report is scheduled to be issued in December.

The city-wide revised operating budget for FY2006-07 is $390.7 million, an additional net appropriation in the amount of $7.3 million is requested bringing the final revised operating budget to $398.0 million. Capital budget adjustments reduce the city-wide CIP’s by $630,000 primarily due to a transfer of $1.0 million in CIP budget in the Big Blue Bus to their operating budget.

The General Fund ended the year with an overall operating expenditure budget savings of $3.6 million when comparing actual expenditures and commitments to Revised Budget for FY2006-07. Since the General Fund expenditures did not exceed revised budget no additional appropriations are required. Council is asked to authorize the City Manager to make General Fund budget adjustments between departments and major account groups to maintain compliance with the legal level of budget control. Proposed budget adjustments are identified in Attachment B.

Included as attachments to this report for general information are:

• The Year-End Budget Report FY2006-07 is included in Attachment C which is new this year and is intended to summarize both the financial and programmatic achievements of the City for last fiscal year in a user-friendly format.
• The Year-End Departmental Performance Review (Attachment D)
• Year-End Capital Improvements Program Status (Attachment E)

Discussion

Background

Each year Council, Housing Authority, Redevelopment Agency and Parking Authority adopt and revise budgets throughout the fiscal year, as needed. For most budget actions, there are sufficient funds appropriated within a fund to cover any under-budgeted account groups within particular departments. The staff report recommends that City Council authorize the City Manager to make changes between departments and account groups. All recommended actions are listed in Attachment B.

Additional appropriations are requested as follows:

• Charnock Fund - $2,698,194 for legal expenditures, regulatory fees and interest expense
• Earthquake Recovery Redevelopment Project - $2,144,152 for higher pass-through payments to other agencies due to receipt of greater tax revenue
• Community Development Block Grant Fund - $60,621 for additional eligible CDBG projects
• Miscellaneous Grants Fund - $293,813 to reflect various grant expenditures not previously budgeted and interest earnings on grant funds eligible for expenditure
• Solid Waste Management Fund - $278,389 for overtime expenses
• Pier Fund - $102,705 Harbor Guard overtime expenses and contractual custodial services
• Cemetery Fund - $231,608 for overtime and temporary employee expenses, plus higher supplies and expenses.
• Big Blue Bus Fund - $162,894 for higher bus repair and maintenance costs and adjust for reduced reimbursement from Local Return funds.
• Gas Tax Fund - $25,556 to increase Proposition 42 funds for street resurfacing projects
• SCAQMD AB2766 Fund - $258,026 to provide grant funds for low emission vehicles and additional audit fees
• Information Technology Replacement & Services Fund $85,541 for purchases of computer equipment
• Automobile Self-Insurance Fund - $209,722 for claims payments
• Parking Authority - $94,044 for restroom attendant programs in the downtown parking structures.

Total requested appropriations city-wide are: $6,645,225 ($7,276,128 increase to the operating budgets and a $630,903 decrease to the capital budgets). All transactions are identified by department and division within a fund in Attachment A.

No additional appropriations are required for the General Fund as there was a total fund budget savings of $3.6 million. It is anticipated that after completion of the audit the ending General Fund Balance will have an unreserved and undesignated fund balance of $9.4 million due to budget savings and higher than anticipated one-time revenues. The 10% set-aside of $24.6 million for emergencies has been reflected in a designation on the Balance Sheet.

Staff will be recommending a small General Fund appropriation ($100,000) in the staff report adopting FY2007-08 budget and personnel changes, also scheduled for action on November 13, 2007, and that any other commitments of these funds be held for consideration at mid-year.

Budget/Financial Impacts

The requested FY2006-07 budget actions adjust the revised budgets to actual expenditures in the various City funds.

Prepared by: Janet Shelton, Budget Manager

Attachments:

A: Proposed FY2006-07 Budget Appropriations

B: FY2006-07 Budget Changes With No Fund Appropriation Increases

C: Year-End Budget Report FY2007-08

D: The Year-End Departmental Performance Review

E: Year-End Capital Improvements Program Status (Not available electronically)

Approved:	Forwarded to Council:
Carol Swindell Director, Finance	P. Lamont Ewell City Manager