Title
RESOLUTION NO. 2015-217 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING VARIOUS AMENDMENTS TO THE FISCAL YEAR 2014-15 BUDGET TO ADJUST FOR VARIANCES AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED)
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
As part of the fiscal year 2015 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, making budget adjustments as needed to finalize fiscal year 2015, 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 2015 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:
City Attorney - Unanticipated expenditures for contractual attorney services from Council approved actions has resulted in an overage in the City Attorney’s Supplies and Services budget. In order to address this overage, staff is recommending a transfer of $34,000 from the City Attorney’s Personnel Services expenditure category and a transfer of $26,100 from the Administration Department’s Personnel Services category to the City Attorney’s Supplies and Services expenditure category. These changes result in no net fiscal impact to the General Fund.
Information Technology Services - The ITS department has exceeded its Supplies and Services budget by approximately $76,000. This overage is due to several unanticipated software purchases. Most notably the City purchased BeneTrac software system for the Human Resources Department. BeneTrac system is an integrated online benefit enrollment/administration system to improve the Human Resource’s department’s open enrollment process for employee benefits. To ensure implementation at open enrollment in October, site construction, testing and payroll integration processes had to begin no later than June 30, 2015. The ITS department has sufficient savings in other expenditure categories to offset the overage in Supplies and Services. Staff recommends a transfer from Personnel Services of $65,000 and a $10,400 transfer from Utilities to Supplies and Services.
Non Departmental - The Non Departmental budget has exceeded its Supplies and Services budget by approximately $201,000. This overage reflects higher than anticipated attorney services, contractual services, and insurance costs. A portion of this overage can be addressed by transferring savings in the following expenditure categories - Utilities ($15,700) and Other Expenses ($2,000). Staff further recommends transferring $175,300 from the Finance Department’s Personnel Services to address the remaining overage in Supplies and Services. Finally staff recommends appropriating $8,000 based on unanticipated revenues. Council had previously authorized a transfer from the General Fund to the Equipment Replacement Fund for the lease of a Fire engine. At the time of approval the lease payment expenses were estimated to be $100,000 but the actual lease payments are $92,000. There is $8,000 available to transfer back to the General Fund.
The budget for Non Departmental includes various Transfers Out from the General Fund to other funds. The fiscal year 2015 budget includes a transfer from the General Fund to the LLEBG Fund to offset a portion of a grant funded position that is assigned to the Police Department. The budgeted Transfer Out was insufficient to cover the difference between the cost of the position and the grant funds. An additional $12,387 is requested to be transferred from the General Fund to the LLEBG fund. The increase in the Transfer Out will be offset with a reduction in the Police Department’s Personnel Services budget.
Finally, staff is requesting to transfer $534,900 of capital expenditures and reimbursement revenues from the General Fund’s Non-Departmental CIP budget to the Capital lmprovement Fund. These funds were initially budgeted in the in the General Fund for the Willow Street Bridge Replacement Project (STL-384). These funds account for the City of San Diego’s reimbursement to this project for their requested water line betterments covered under a utility agreement. Staff is recommending the transfer of these funds from the General Fund to the Capital Improvement Fund for better accounting and reporting purposes.
The changes to the Non Departmental budget result in no net fiscal impact to the General Fund.
Animal Care Facility (ACF) - A transfer of $43,000 from salary savings of the Personnel Services budget of the ACF to the Capital expenditure category is requested. This transfer will be used for roof repair expenses at the ACF.
Public Works - Staff is recommending the transfer of $338,000 of Personnel Services cost savings from the Public Works Personnel Services budget to address unanticipated and unfunded issues within the Public Works Department and various City facilities. These are as follows:
• A $200,000 appropriation to the Non-CIP Project Expenditure category of the Non Departmental budget is requested for the demolition costs and landscape replacement costs of the Heritage Museum site.
• A $75,000 transfer to the Supplies and Services expenditure category for air conditioning repairs at the Public Works Corp. Yard and other supplies and services expenses that have occurred in the latter half of the fiscal year resulting from various unexpected building maintenance repairs. These costs resulted in the Supplies and Services budget to be exceeded. This transfer addresses the overage.
• A $63,000 transfer to Capital expenditure category of the Public Works Department for the emergency replacement of a commercial grade mower for the Parks Maintenance Division.
These costs will be offset by a reduction in the Public Works Utilities expense category. This category reflects unanticipated savings in the water budget.
Police Department - The Local Law Enforcement Block Grant Fund (LLEBG) has exceeded its personnel services budget. Staff is recommending an increase of $12,387 in Transfer-Out from the General Fund to the LLEBG Fund to address the overage. The Transfer-Out will be funded by salary savings in the Police Department Personnel Services category budget.
Fire Department - The Fire Department is requesting a $216,000 transfer from Personnel Services cost savings to address equipment issues within the department. The department is recommending that $200,000 be transferred to the Non-CIP Expenditure category of the Fire Department budget to fund the future cost of a fire engine. The department is also requesting an increase of $16,000 to the fleet maintenance charges budget in order to reimburse the Central Garage Fund for repairs completed on a 1992 reserve engine. The increase to the Supplies and Services expense category will also be funded by savings in Personnel Services costs.
Amendments to Other Funds
Staff is recommending budget amendments to the following funds:
Supplemental Law Enforcement Services Fund (SLESF) - The SLESF fund has exceeded its Personnel Services budget due to higher than anticipated costs. Staff is recommending a transfer of $19,300 from the Supplies and Services expenditure category to the Personnel Services expenditure category to offset this overage. Staff is also requesting to increase the budgeted Transfer Out from the SLESF fund to the Police Grants Fund by $408. Both of these budget amendments will be offset by a corresponding expenditure reduction in the Supplies and Services budget. There is no net fiscal impact as a result of these changes.
Police Grant Fund - The Police Grants Fund has an overage in the Personnel Services expenditure category due to unanticipated expenses that has caused the fund to be out of balance. Staff is recommending an increase of $408 to the Transfer In from the Supplemental Law Enforcement Services Fund to offset this overage.
Equipment Lease Fund - During fiscal year 2012-13, the City Council approved a transfer from the Fire Department to the Equipment Lease Fund of $100,000 for the cost of a seven-year lease with Oshkosh Capital for the acquisition of a Pierce Arrow XT Triple Combination Pumper/Fire Engine. At that time, the amount of the lease payment had not yet been finalized. The lease payment was subsequently determined to be $92,000; the remaining balance of $8,000 is available to be transferred back to the General Fund.
Further, in order to align the debt service payments with the budget, staff is requesting to budget an additional debt service payment in fiscal year 2015. Funds are available in the Equipment Lease Fund for this purpose. Staff requests that $92,000 be appropriated to the Other Expenses category of the Equipment Lease Fund for the principal and interest lease payment and $8,000 appropriated to the Transfers Out category for the transfer to the General Fund.
Local Law Enforcement Block Grant (LLEBG) Fund - As discussed above, the LLEBG exceeded its Personnel Services budget. An appropriation of $12,387 is requested to align actual expenditures with budget. This appropriation will be offset by increased revenues (an increase in the transfer from the General Fund).
Capital Improvement Fund - As discussed above, staff is recommending the transfer of $534,900 of capital expenditures and related reimbursement revenues from the General to the Capital lmprovement Fund. These Funds account for the City of San Diego’s reimbursement to Willow Street Bridge Replacement Project (STL-384) for their requested water line betterments covered under a utility agreement. Staff is recommending the transfer of these funds from the General Fund to the Capital Improvement Fund for better accounting and reporting purposes.
DECISION-MAKER CONFLICT
No Property within 500 feet
Staff has reviewed the property holdings of the [City Council members and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18705.2(a)(11), for purposes of the Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staff is not independently aware, and has not been informed by any City of Chula Vista 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 2014/15 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 |
EXPENSE |
REVENUE |
NET |
|
City Attorney |
City Atty. Transfer Personnel Services savings to Supplies and Services for Outside Attorney Services ($34,000) and Transfer from Administration |
$ 26,100 |
$ - |
$ 26,100 |
|
Administration |
Reduction in Personnel Services for Transfer to City Attorney |
$ (26,100) |
$ - |
$ (26,100) |
|
Information Technology |
IT Bene Trac Software Transfer from Personnel Services and Utilities to Supplies and Services ($75,400) |
$ - |
$ - |
$ - |
|
Finance |
Reduction in Personnel Services for transfer to Non-Departmental Supplies and Services |
$ (175,300) |
$ - |
$ (175,300) |
|
Non-Departmental |
Fire Lease Transfer In revenue from Equipment Lease Fund |
$ - |
$ 8,000 |
$ (8,000) |
|
|
Police LLEBG Transfer Out appropriation |
$ 12,387 |
$ - |
$ 12,387 |
|
|
Transfer of Finance Dept. Savings $175,300 and appropriation of Transfer In ($8,000) to offset Supplies and Services overage |
$ 183,300 |
$ - |
$ 183,300 |
|
|
Transfer of Willow St. Bridge Project expenses and revenues to Capital Improvement Fund |
$ (534,900) |
$ (534,900) |
$ - |
|
|
Transfer from Public Works for Heritage Museum demolition |
$ 200,000 |
$ - |
$ 200,000 |
|
Animal Care Facility |
Transfer of salary savings ($43,000) for roof repairs at Animal Care Facility |
$ - |
$ - |
$ - |
|
Police |
Police LLEBG Transfer Out Personnel Services reduction expense offset |
$ (12,387) |
$ - |
$ (12,387) |
|
Fire |
Transfer of Salary Savings (Personnel Services) to Non-CIP for future engine acquisition ($200,000) and 1992 Reserve Engine Repair Transfer from Personnel to Supplies and Services ($16,000) |
$ - |
$ - |
$ - |
|
Public Works |
Public Works Transfer from Personnel to Supplies and Services for City-wide Repairs ($75,000), to Non Departmental Non-CIP for Heritage Museum demolition project ($200,00) and to Capital for commercial lawnmower purchase ($63,000) offset by a Utilities expense reduction. |
$ (200,000) |
$ - |
$ (200,000) |
|
|
Total General Fund Amendments |
$ (526,900) |
$ (526,900) |
$ - |
Approval of this resolution will align actuals and budget in the General Fund. There is no fiscal impact from these changes as the staff recommended changes to the General Fund are either revenue offset or expenditure neutral consisting of offsetting expense transfers from identified savings.
Summary of Budget Appropriations and Transfer by Fund
|
FUND |
DESCRIPTION |
EXPENSE |
REVENUE |
NET |
|
Supplemental Law Enforcement Svcs. Fund |
Transfer from Supplies and Services to ($19,708) Personnel Services ($19,300) and Transfer Out to Police Grants Fund ($408) |
$ - |
$ - |
$ - |
|
Local Law Enforcement Block Grant Fund |
Police LLBG Appropriation for Personnel Services Transfer from General Fund |
$ 12,387 |
$ 12,387 |
$ - |
|
Police Grants Fund |
Transfer In from Supplemental Local Law Enforcement Services Fund |
$ - |
$ 408 |
$ (408) |
|
Equipment Lease Fund |
Fire Equipment Lease Payment Adjustment & Transfer to General Fund of Lease Payment Savings |
$ 100,000 |
$ - |
$ 100,000 |
|
Capital Improvement Fund |
Transfer of Willow St. Bridget Project Funds from General Fund |
$ 534,900 |
$ 534,900 |
$ - |
|
|
TOTAL OTHER FUNDS |
$647,287 |
$547,695 |
$99,592 |
Approval of this resolution will align actuals and budget within various other funds. With the exception of the Equipment Lease Fund and the Police Grants Fund, the recommended changes are neutral within the affected funds as adjustments are either revenue offset or contain offsetting transfers within expenditure and revenue categories. The available balance of the Equipment Lease Fund will be negatively impacted by $100,000 as a result of changes. However, it should be noted that the available balance of the Equipment Lease Fund is designated for lease payments that will be paid from the recommended transfer. The Police Grants Fund will be positively affected by $408 in order to balance out this fund.
ONGOING FISCAL IMPACT
Staff will review the impacted budgets to identify potential ongoing impacts and may recommend changes during fiscal year 2016/17.
Staff Contact: Angelica Aguilar, Finance Department