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RESOLUTION NO. 2014-175 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING VARIOUS AMENDMENTS TO THE FISCAL YEAR 2013/14 BUDGET TO ADJUST FOR VARIANCES AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED)
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RECOMMENDED ACTION
Recommended Action
City Council adopt the resolution.
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SUMMARY
As part of the fiscal year 2014 year-end process, staff has reviewed budget to actual reports to identify potential budget overages at either the category or fund level. Various budget changes are needed to align the budget with year-end actuals.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity, appropriating funds per settlement terms, for compliance with the California Environmental Quality Act (CEQA) and has determined that this activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
As part of the fiscal year 2014 year-end process, staff has reviewed budget to actual reports to identify potential budget overages at either the category or fund level. Various budget changes are needed to align the budget with year-end actuals.
For government entities, a budget creates a legal framework for spending during the fiscal year. After the budget is approved there are circumstances, which arise that could require adjustments to the approved budget. Council Policy 220-02 "Financial Reporting and Transfer Authority" was established in January of 1996 and allows for budget transfers to be completed. Transfers exceeding $15,000 require Council approval. Further, Council may amend the budget at any meeting after the adoption of the budget with a 4/5ths vote. Staff is recommending changes in the General Fund and various other funds to align budget with year-end actuals where the actuals have exceeded budget.
General Fund Amendments
Staff is recommending the following budget amendments in the General Fund:
Human Resources - The Supplies and Services category exceeded budget due to higher than anticipated costs related to new employee medicals. There are sufficient savings in the Personnel Services category to address this overage, a transfer of $10,000 from the Personnel Services expenditure category to the Supplies and Services expenditure category is recommended. These changes result in no net fiscal impact. Staff is also recommending a reduction in the Transfer In revenue category; this revenue was incorrectly budgeted in the General Fund but should have been budgeted in the Public Liability Expense Fund. This change will result in a reduction in budgeted revenues of $33,654 in the General Fund and a corresponding increase in the Public Liability Expense Fund.
City Attorney - The Supplies and Services category exceeded budget due to contracted attorney services fees that exceeded the budget resulting from City Attorney/Council directed actions. There are sufficient savings in the Personnel Services category to address this overage, a transfer of $58,000 from the Personnel Services expenditure category to the Supplies and Services expenditure category is recommended. These changes result in no net fiscal impact.
Fire - The Fire Department has exceeded budget in various expenditure categories. Personnel Services is over budget due to higher than anticipated overtime costs and hourly wages. Supplies and Services is over budget due to higher than anticipated fleet maintenance charges. Utilities is over due to increased gas & electric and water costs. Combined, these categories exceeded budget by approximately $219,000. This overage will be addressed by appropriating $85,000 based on unanticipated revenue, transferring savings of $9,000 from the Transfers Out expenditure category within the Fire Department, and transferring $125,000 from Police Department budgetary savings. The Police Department has unanticipated savings of $117,000 in their fleet maintenance budget. The budget for fleet maintenance is based on historical usage and planned maintenance for the coming fiscal year. Actual fleet maintenance costs for the Police Department were lower than anticipated in the budget while the fleet maintenance charges for the Fire Department were higher than anticipated. The remaining $8,000 transfer from Police will come from savings in other Supplies and Services accounts.
Police - The Utility category exceeded budget due to higher than anticipated water and gas & electric expenses. There are sufficient savings in the Personnel Services category to address this overage, a transfer of $18,000 from the Personnel Services expenditure category to the Utilities category is recommended. These changes result in no net fiscal impact.
Staff is also recommending the transfer of $164,000 from Personnel Services and $11,000 from the Other Expense category to the Supplies and Services expense category for the purchase of body worn camera equipment.
As discussed above, $125,000 will be transferred from the Police Department to the Fire Department to help mitigate the shortfall in the Fire Department.
Non Departmental - The budget for Non Departmental includes various transfers out from the General Fund to other funds. Actual expenses for the transfer from the General Fund to the Development Services Fund to account for subsidized energy efficiency permitting services have exceeded budget by approximately $46,000. The budget for the transfer from the General Fund to the Development Services needs to be increased by this amount to account for these increased costs. There are sufficient savings in the transfers to two debt service accounts to mitigate the increased costs related to the permit subsidy transfer.
An appropriation of $10,920 is also needed to increase the transfer from the General Fund to the Energy Conservation Loans Fund. Actual revenues for this fund fell short of budget; in order to keep this fund in balance an additional transfer is needed. The appropriation to the Non Departmental budget will be fully offset by unanticipated revenues related to energy projects. This change results in no net fiscal impact.
The 2003 Refunding Certificates of Participation bonds were retired in fiscal year 2013-14. There is cash remaining with the trustee in the amount of $271,003. Staff is requesting to transfer these funds from the 2003 Refunding COP fund to the General Fund in order to close the debt service fund for the 2003 Refunding COP. A Transfer-In of $271,003 is being requested to be added to the General Fund to receive the cash. This results in a positive fiscal impact to the General Fund.
Public Works - Actual water expenses in the Public Works Department exceeded budget. There are some savings within the Utilities category to partially mitigate the overage but a transfer of $290,000 is needed to address the remaining overage. There are sufficient savings in the Personnel Services ($260,000) and Supplies and Services ($30,000) categories to offset the overage in Utilities. The increased water expenses are primarily in park maintenance and reflect higher water usage as a result of the drought and higher water rates.
Amendments to Other Funds
Staff is recommending budget amendments to the following funds:
Central Garage Fund - The Central Garage Fund has exceeded budget in two expenditure categories - Supplies and Services and Utilities. The overage in Supplies and Services of $27,500 is attributable to vehicle accident damage repairs and can be addressed with a transfer from Personnel Savings. The overage of $54,000 in the Utilities category reflects higher than anticipated CNG related expenditures and can be addressed with a revenue offset appropriation. These appropriations will be offset by a reimbursement revenue $54,000 from the Transit Fund that are related to these increased costs.
Sewer Service Revenue Fund - As discussed above, a reimbursement from the Sewer Fund was incorrectly budgeted in the General Fund. The reimbursement should be to the Public Liability Expense Fund for expenditures incurred on behalf of the Sewer Fund. In order to make this correction, a decrease in the Transfer Out to the General Fund of $33,654 and an increase in the Transfer Out to the Public Liability Trust Fund is requested. These changes result in no net fiscal impact to the Sewer Fund.
Public Liability Fund - The addition of a Transfer In of $33,654 from the Sewer Fund is needed to reimburse the Public Liability Fund for expenditures incurred on behalf of the Sewer Fund. This will result in a positive fiscal impact to the Public Liability Fund.
Eastlake Maintenance District - An appropriation of $100 to the Other Expenses category and a $1,000 appropriation to the Supplies and Services expenditure category are needed to offset overages in these budgets due to actual service activity levels. These appropriations will be made from the available fund of the Eastlake Maintenance District Fund.
Open Space District #3 - An appropriation of $500 to the Other Expenses category and a $500 appropriation to the Supplies and Services expenditure category are requested to offset overages in these budgets due to actual service activity levels. These appropriations will be made from the available fund of the Open Space District #3 Fund.
Open Space District #17 - An appropriation of $1,000 to the Other Expenses category is requested to offset overages in this expenditure category due to actual service activity levels. This appropriation will be made from the available fund of the Open Space District #17 Fund.
Open Space District #20 - An appropriation of $4,500 to the Utilities expenditure category is requested to offset overages in utility expenses for water due to actual service activity levels. This appropriation will be made from the available fund of the Open Space District #20 Fund.
Development Services - As discussed above the actual reimbursement for subsidized energy efficiency permitting services from the General Fund to the Development Services Fund exceeded budget. An increase in the Transfer In from the General Fund is needed to account for this additional reimbursement of $46,000.
2004 COP Civic Center Project Phase 1 and 2006 COP Civic Center Project Phase - A reduction in the transfer from the General Fund to these funds is proposed. A reduction in the budgeted transfer will not negatively impact these funds as the actual transfer amount was less than budget. The transfer to the 2004 COP Civic Center Project Phase 1 will be reduced by $26,000 and the transfer to the 2006 COP Civic Center Project Phase 2 will be reduced by $20,000.
Energy Conservation Loans Fund - As discussed above, actual revenues for this fund fell short of budget by $10,920. An increase in the transfer in from the General Fund will mitigate this shortfall.
Federal Grants Fund - This fund includes a transfer from the Fire Department to act as matching funds for a grant. A reduction of $9,000 in the transfer from the Fire Department is proposed. This reduction will not negatively impact the Federal Grants fund as the actual match required amount was less than budget.
Transit Fund - The Transit fund has exceeded its Supplies and Services budget. The overage of $129,000 is a result of higher than anticipated CNG fuel costs and can be addressed with a revenue offset appropriation.
2003 Refunding COP - As noted above, the 2003 Refunding Certificates of Participation bonds were retired in fiscal year 2013-14. There is cash remaining with the trustee in the amount of $271,003. Staff is requesting to transfer these funds from the 2003 Refunding COP fund to the General Fund in order to close the debt service fund for the 2003 Refunding COP; a Transfer -Out of $271,003 will be added to the 2003 Certificates of Participation fund. A corresponding Transfer-In of $271,003 will be added to the General Fund to receive the cash.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of Eastlake Maintenance District, Open Space District #3, Open Space District #17, and Open Space District #20 which is the subject of this action. Staff is not independently aware, and has not been informed by any Councilmember, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
Staff has determined that the action contemplated by the action related to the Civic Center project is ministerial, secretarial, manual, or clerical in nature and, as such, does not require the City Council members to make or participate in making a governmental decision, pursuant to California Code of Regulations Title 2, section 18702.4(a). Consequently, this item does not present a conflict under the Political Reform Act (Cal. Gov't Code ยง 87100, et seq.). Staff is not independently aware, and has not been informed by any Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
With respect to the remaining decisions contemplated by this action staff has determined that it is not site specific and consequently, the 500-foot rule found in California Code of Regulations section 18704.2(a)(1), is not applicable to this decision. Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City's Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. This action supports the Operational Excellence goal by identifying needed budget amendments in an open and transparent manner. This transparency supports City Initiative 1.3.1. - "Foster public trust through an open and ethical government."
CURRENT YEAR FISCAL IMPACT
Approval of the resolution amending the fiscal year 2013/14 budget will result in the following appropriations and/or transfers. The resulting fiscal impacts to various funds are also listed in the following tables.
Summary of General Fund Budget Appropriations and Transfers by Department
Department |
Description |
Expenditures |
Revenues |
Net Impact |
Human Resources |
$10,000 transfer from Personnel Services to Supplies and Services |
$ - |
$ - |
$ - |
|
Reduce reimbursement from Sewer Fund |
$ - |
$ (33,654) |
$ (33,654) |
City Attorney |
$58,000 transfer from Personnel Services to Supplies and Services |
$ - |
$ - |
$ - |
Fire |
Appropriation to Personnel Services based on unanticipated revenues |
$ 85,000 |
$ 85,000 |
$ - |
|
$9,000 transfer from Transfers Out to Utilities |
$ - |
$ - |
$ - |
|
Transfer from Police Department |
$ 125,000 |
$ - |
$ (125,000) |
Police |
Transfer to Fire Department |
$ (125,000) |
$ - |
$ 125,000 |
|
$193,000 transfer from Supplies and Services to Utilities |
$ - |
$ - |
$ - |
Non-Departmental |
$46,000 transfers within the Transfers Out expense category |
$ - |
$ - |
$ - |
|
Increase transfer to Energy Conservation Loans Fund |
$ 10,920 |
$ 10,920 |
$ - |
|
Transfer-In from 2003 Refunding COP |
$ - |
$ 271,003 |
$ 271,003 |
Public Works |
$290,000 transfer from Personnel Services and Supplies and Services to Utilities |
$ - |
$ - |
$ - |
Total General Fund |
$ 95,920 |
$ 333,269 |
$ 237,349 |
Approval of this resolution will align actuals and budget in the General Fund. The net fiscal impact of these changes results in a positive fiscal impact of $237,349 in the General Fund. The positive fiscal impact largely reflects the reimbursement to the General Fund from the 2003 Refunding COP.
Summary of Budget Appropriations and Transfer by Fund
Fund |
Description |
Expenditures |
Revenues |
Net Impact |
Central Garage |
$27,500 transfer from Personnel Services to Supplies and Services |
$ - |
$ - |
$ - |
|
Appropriation for Utility expenses |
$ 54,000 |
$ 54,000 |
$ - |
Sewer Service Revenue |
$33,564 transfer within Transfers Out expense category |
$ - |
$ - |
$ - |
Public Liability |
Add reimbursement revenue from Sewer Fund |
$ - |
$ 33,654 |
$ 33,654 |
Eastlake Maintenance District |
Appropriations for Other Expenses and Supplies and Services expenses |
$ 1,100 |
$ - |
$ (1,100) |
Open Space District #3 |
Appropriations for Other Expenses and Supplies and Services expenses |
$ 1,000 |
$ - |
$ (1,000) |
Open Space District #17 |
Appropriation for Other Expenses category |
$ 1,000 |
$ - |
$ (1,000) |
Open Space District #20 |
Appropriation for Utilities expenses |
$ 4,500 |
$ - |
$ (4,500) |
Development Services |
Increase reimbursement from General Fund |
$ - |
$ 46,000 |
$ 46,000 |
2004 COP Civic Center Project Phase 1 |
Reduce transfer in from General Fund |
$ - |
$ (26,000) |
$ (26,000) |
2006 COP Civic Center Project Phase 2 |
Reduce transfer in from General Fund |
$ - |
$ (20,000) |
$ (20,000) |
Energy Conservation Loans |
Increase transfer from General Fund |
$ - |
$ 10,920 |
$ 10,920 |
Federal Grants |
Reduce transfer in from General Fund |
$ - |
$ (9,000) |
$ (9,000) |
Transit |
Appropriation for Supplies and Services expenses |
$ 129,000 |
$ 129,000 |
$ - |
2003 Refunding COP |
Appropriation for a transfer out to the General Fund |
$ 271,003 |
$ - |
$ (271,003) |
Total Other Funds |
$ 461,603 |
$ 218,574 |
$ (243,029) |
Approval of this resolution will align actuals and budget within various other funds. The changes in the Public Liability Expense Fund, Development Services Fund, and Energy Conservation Loan Fund result in a positive fiscal impact to these funds. The changes to the 2004 COP Civic Center Project Phase 1 fund, 2006 COP Civic Center Project Phase 2, and Federal Grants fund result in no net fiscal impact. The appropriations to Open Space Districts 3, 17, 20, Eastlake Maintenance District, and the 2003 Refunding COP will be made from the available fund balance of each fund. All other changes result in no net fiscal impact.
ONGOING FISCAL IMPACT
Actual water expenses in the Public Works Department totaled $2.1 million in fiscal year 2013/14. The fiscal year 2014/15 budget includes $1.9 million for water expenses. An additional budget appropriation for these expenses may be needed mid-year. As discussed above, water usage was higher than anticipated due to drought conditions.
Staff will review the impacted budgets to identify potential ongoing impacts and may recommend changes during fiscal year 2014/15.
Staff Contact: Angelica Aguilar, Finance Department