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Item 2.
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| City Council Regular | |
| Date: | 06/13/2022 |
| Title: | Fiscal Year 2022 Budget Amendments |
| Presented by: | Andy Zoeller, Finance Director |
| Department: | Finance |
| Presentation: | Yes |
| Legal Review | No |
RECOMMENDATION
Staff recommends that City Council hold a public hearing and adopted the budget amendments as proposed.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
Stillwater Building Utilities – Facilities
The FY22 budget did not include any carrying costs for ownership of the Stillwater Building. Estimated utility costs for FY22 are $300,000. Much of this is covered with the rental revenue from the County, which is approximately $252,344 for FY22. The remaining amounts will be paid for from the funds used for purchase and construction of the space. A budget amendment is needed for the full carrying cost of $300,000.
Hail Claim – Facilities
The FY22 budget for the hail damage was an estimated amount as Facilities was not sure how much work was going to be able to be completed within the year. We received $3.16 million in Insurance proceeds, but only budgeted $2.8 million. We have about $2.5 million encumbered for repairs and have completed $813,333, to date. Additional change orders are anticipated. Facilities is still negotiating an additional payout based on the projects that have been completed and the various departments that had repairs are expecting to pay some of the cost of repairs as well. A budget amendment of $360,000 is requested and will be funded by the additional insurance proceeds received.
Closing Centennial Park Construction Fund
The FY19 budget included $2.4 million for phase 1 development of Centennial Park. The funding for this project came from the General Fund ($2.0 million, 81%) and Parks Programs - Cash-in-lieu ($460,000, 19%). The funds were deposited into a construction fund at that time. The work on Phase 1 is now complete and was completed $69,251 under budget. This amendment is to establish the budget authority to return the funds, proportionately, to the General Fund ($56,093.31) and the Parks Programs – Cash-in-lieu Fund ($13,157.69). Final FY22 expenses included $1,913 to finalize the project, which were not budgeted. A total budget amendment of $71,164 is needed to close the fund.
9-1-1 Radio Contract – including American Rescue Plan
On April 25, 2022 the City Council awarded a contract to Motorola Solutions in the amount of $10,495,000, to upgrade the City’s 911 radio system. The current system is approaching “end of life”, and replacement was not included in the original FY22 budget. At the contract award, Council was made aware of the need for a budget amendment. Funding for this project will come from the following sources:
City of Billings ARPA funds - $7,000,000
EOC 911 Fund - $2,195,000
Equipment Replacement (Public Safety) - $800,000
800MHZ Fund - $500,000
Total - $10,495,000
Dehler Park Maintenance - Fund 7680
Unexpected repair costs were incurred during FY2022 for broken windows and doors at the Dehler Park Baseball Facility. Also, costs for the Legion Baseball Tournament from the summer of 2021 were paid and did not have budget authority. There is sufficient cash ($426,096) to fund the additional expenses. Additional budget authority of $8,700 is needed.
Glass and door repairs $3,900
Legion Baseball Tournament $4,800
Total $8,700
East Tax Increment Fund – Developmental Incentives
The original FY22 budget included developmental incentives in the amount of $150,000. At the time of budget adoption, specific projects were not identified, but anticipated. At the 7/26/21 City Council meeting, the City Council approved an agreement for the demolition of the Lazy KT hotel in the amount of $98,776. This was completed and paid on 9/23/2021. At the 4/26/21 City Council Meeting, an award for $63,085 was approved for improvements to the Yellowstone Ice facility in the EBURD. This project was completed and paid on 9/22/2021. Actual amounts paid for improvements to Yellowstone Ice were $62,079. Total developmental incentives paid in FY22 were $160,855. In addition to these, there were debt compliance costs totaling $500, which were not budgeted in FY22. A budget amendment of $11,355 is needed to cover these additional costs. Estimated ending cash balance in the East TIF fund will be $1.2 million, after the additional payments requested.
Cash-in-lieu - Castle Rock Park Contract
At the 6/13/2022 City Council meeting, a contract was approved for additional funds to be made available for playground equipment at Castle Rock Park. Total Cash-in-lieu for Castle Rock Park is $121,188.02. Consistent with the staff memo approving the contract, this budget amendment will authorize the use of $121,000 of Cash-in-lieu funds from Castle Rock Park, leaving $188.02 remaining for Castle Rock Park.
Information Technology – Server Replacements
At the 6/13/2022 City Council meeting, a contract was approved to purchase 5 Dell servers to replace existing servers. This project, totaling $152,235, was not included in the FY22 budget. Information Technology Fund has a working capital balance (short-term assets less short-term liabilities) of around $600,000. The IT Department is requesting a budget amendment for $150,000 to fund this purchase, using existing working capital for the purchase.
YWCA – Marijuana Excise Tax
At the 5/9/22 City Council Meeting, Council Member Choriki proposed an initiative to amend the budget to contribute $200,000 to the YWCA Women’s Shelter. The estimated Marijuana Excise Tax Revenue to the City of Billings in FY22 is $208,357. These funds have not been received at the City, but will likely arrive some time in July or August. This request is a one-time contribution to be made before fiscal year end, to be funded by future anticipated Marijuana Excise Tax, which was not included in the FY22 budget.
The FY22 budget did not include any carrying costs for ownership of the Stillwater Building. Estimated utility costs for FY22 are $300,000. Much of this is covered with the rental revenue from the County, which is approximately $252,344 for FY22. The remaining amounts will be paid for from the funds used for purchase and construction of the space. A budget amendment is needed for the full carrying cost of $300,000.
Hail Claim – Facilities
The FY22 budget for the hail damage was an estimated amount as Facilities was not sure how much work was going to be able to be completed within the year. We received $3.16 million in Insurance proceeds, but only budgeted $2.8 million. We have about $2.5 million encumbered for repairs and have completed $813,333, to date. Additional change orders are anticipated. Facilities is still negotiating an additional payout based on the projects that have been completed and the various departments that had repairs are expecting to pay some of the cost of repairs as well. A budget amendment of $360,000 is requested and will be funded by the additional insurance proceeds received.
Closing Centennial Park Construction Fund
The FY19 budget included $2.4 million for phase 1 development of Centennial Park. The funding for this project came from the General Fund ($2.0 million, 81%) and Parks Programs - Cash-in-lieu ($460,000, 19%). The funds were deposited into a construction fund at that time. The work on Phase 1 is now complete and was completed $69,251 under budget. This amendment is to establish the budget authority to return the funds, proportionately, to the General Fund ($56,093.31) and the Parks Programs – Cash-in-lieu Fund ($13,157.69). Final FY22 expenses included $1,913 to finalize the project, which were not budgeted. A total budget amendment of $71,164 is needed to close the fund.
9-1-1 Radio Contract – including American Rescue Plan
On April 25, 2022 the City Council awarded a contract to Motorola Solutions in the amount of $10,495,000, to upgrade the City’s 911 radio system. The current system is approaching “end of life”, and replacement was not included in the original FY22 budget. At the contract award, Council was made aware of the need for a budget amendment. Funding for this project will come from the following sources:
City of Billings ARPA funds - $7,000,000
EOC 911 Fund - $2,195,000
Equipment Replacement (Public Safety) - $800,000
800MHZ Fund - $500,000
Total - $10,495,000
Dehler Park Maintenance - Fund 7680
Unexpected repair costs were incurred during FY2022 for broken windows and doors at the Dehler Park Baseball Facility. Also, costs for the Legion Baseball Tournament from the summer of 2021 were paid and did not have budget authority. There is sufficient cash ($426,096) to fund the additional expenses. Additional budget authority of $8,700 is needed.
Glass and door repairs $3,900
Legion Baseball Tournament $4,800
Total $8,700
East Tax Increment Fund – Developmental Incentives
The original FY22 budget included developmental incentives in the amount of $150,000. At the time of budget adoption, specific projects were not identified, but anticipated. At the 7/26/21 City Council meeting, the City Council approved an agreement for the demolition of the Lazy KT hotel in the amount of $98,776. This was completed and paid on 9/23/2021. At the 4/26/21 City Council Meeting, an award for $63,085 was approved for improvements to the Yellowstone Ice facility in the EBURD. This project was completed and paid on 9/22/2021. Actual amounts paid for improvements to Yellowstone Ice were $62,079. Total developmental incentives paid in FY22 were $160,855. In addition to these, there were debt compliance costs totaling $500, which were not budgeted in FY22. A budget amendment of $11,355 is needed to cover these additional costs. Estimated ending cash balance in the East TIF fund will be $1.2 million, after the additional payments requested.
Cash-in-lieu - Castle Rock Park Contract
At the 6/13/2022 City Council meeting, a contract was approved for additional funds to be made available for playground equipment at Castle Rock Park. Total Cash-in-lieu for Castle Rock Park is $121,188.02. Consistent with the staff memo approving the contract, this budget amendment will authorize the use of $121,000 of Cash-in-lieu funds from Castle Rock Park, leaving $188.02 remaining for Castle Rock Park.
Information Technology – Server Replacements
At the 6/13/2022 City Council meeting, a contract was approved to purchase 5 Dell servers to replace existing servers. This project, totaling $152,235, was not included in the FY22 budget. Information Technology Fund has a working capital balance (short-term assets less short-term liabilities) of around $600,000. The IT Department is requesting a budget amendment for $150,000 to fund this purchase, using existing working capital for the purchase.
YWCA – Marijuana Excise Tax
At the 5/9/22 City Council Meeting, Council Member Choriki proposed an initiative to amend the budget to contribute $200,000 to the YWCA Women’s Shelter. The estimated Marijuana Excise Tax Revenue to the City of Billings in FY22 is $208,357. These funds have not been received at the City, but will likely arrive some time in July or August. This request is a one-time contribution to be made before fiscal year end, to be funded by future anticipated Marijuana Excise Tax, which was not included in the FY22 budget.
ALTERNATIVES
City Council may:
- Approve the amendments as proposed; or,
- Approve only certain proposed amendments, which may cause some funds actual expenses to be over budget; or
- Not Approve the proposed budget amendments, which would cause some funds actual expenses to be over budget.
FISCAL EFFECTS
The individual impact varies by fund and are described in the narrative and the attached resolution. The total FY22 budget amendments are $11,832,638 and are funded through a combination of reserves and new revenues.