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Item 2.
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| City Council Regular | |
| Date: | 07/24/2023 |
| Title: | FY2023 Budget Amendments |
| Presented by: | Andy Zoeller, Finance Director |
| Department: | Finance |
| Presentation: | Yes |
| Legal Review: | Not Applicable |
| Project Number: | N/A |
RECOMMENDATION
The City Council Budget and Finance Committee and Staff recommend City Council hold a public hearing and approve the FY2023 budget amendments
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
City Hall Construction Funding
On 12/19/2022 City Council approved funding options for the new city hall construction project. These funds were identified at that time, but budget authority to transfer the funds into the construction fund is needed. This amendment will establish the FY23 budget authority consistent with prior council approval.
City Hall Construction Fund
On 5/22/2023 City Council approved the Bid Package #2 contract amendment for City Hall construction. This contract was higher than what was originally budgeted in FY23, but in-line with the estimated construction costs that were identified in the December 2022 funding options. The budget amendment for $8,300,000 will increase the authority in the City Hall Construction Fund, which will be funded with transfers in from other resources that were identified at the 12/19/2022 Council Meeting.
Fleet Services
Budget authority is needed in the Fleet Services Fund to cover the costs for paying out Sick and Vacation accruals for retirees. These payments were not anticipated in the FY23 budget, and were therefore not included in the original budget. Fund balance in the Fleet Services Fund exists to cover the increase in budget authority of $107,000.
Property and Liability Insurance Funds
Property and liability insurance premiums have been increasing at rates greater than what was anticipated in FY23. In FY23 the premiums increased approximately 33% over the prior year, but were only budgeted at a 20% increase. As such a budget amendment is needed for the additional increases in premium at $466,183. Fund balance in the Property and Liability Fund will be used to cover the additional costs, but will ultimately be allocated to departments in future years budgets.
East Tax Increment Fund
The East Tax Increment fund is requesting budget authority for development incentives paid in FY23. The original FY23 budget included $150,000 for development incentives. Actual payments for projects were $229,752 to Yellowstone Ice and Water and Stir LLC. Additional budget authority for annual debt administration is requested in the amount of $550 for a total budget amendment of $80,286. These will be paid for through accumulated tax increment from this fund.
On 12/19/2022 City Council approved funding options for the new city hall construction project. These funds were identified at that time, but budget authority to transfer the funds into the construction fund is needed. This amendment will establish the FY23 budget authority consistent with prior council approval.
| Fund | Amount | Description |
| Equipment Replacement Plan | $500,000 | Fund balance accumulated from contributions |
| Parks Programs | $225,000 | Fund balance accumulated from cell tower leases |
| American Rescue Plan | $165,753 | Interest income earned on ARPA funds |
| Police Programs | $500,000 | Transfer of drug forfeiture funds for Police Department expenses |
| $1,390,753 | Funds transferred to City Hall Construction Fund |
City Hall Construction Fund
On 5/22/2023 City Council approved the Bid Package #2 contract amendment for City Hall construction. This contract was higher than what was originally budgeted in FY23, but in-line with the estimated construction costs that were identified in the December 2022 funding options. The budget amendment for $8,300,000 will increase the authority in the City Hall Construction Fund, which will be funded with transfers in from other resources that were identified at the 12/19/2022 Council Meeting.
Fleet Services
Budget authority is needed in the Fleet Services Fund to cover the costs for paying out Sick and Vacation accruals for retirees. These payments were not anticipated in the FY23 budget, and were therefore not included in the original budget. Fund balance in the Fleet Services Fund exists to cover the increase in budget authority of $107,000.
Property and Liability Insurance Funds
Property and liability insurance premiums have been increasing at rates greater than what was anticipated in FY23. In FY23 the premiums increased approximately 33% over the prior year, but were only budgeted at a 20% increase. As such a budget amendment is needed for the additional increases in premium at $466,183. Fund balance in the Property and Liability Fund will be used to cover the additional costs, but will ultimately be allocated to departments in future years budgets.
East Tax Increment Fund
The East Tax Increment fund is requesting budget authority for development incentives paid in FY23. The original FY23 budget included $150,000 for development incentives. Actual payments for projects were $229,752 to Yellowstone Ice and Water and Stir LLC. Additional budget authority for annual debt administration is requested in the amount of $550 for a total budget amendment of $80,286. These will be paid for through accumulated tax increment from this fund.
ALTERNATIVES
City Council may:
- Approve; or,
- Not Approve
FISCAL EFFECTS
The FY23 budget amendments will increase the FY23 amended budget by $10,344,222
| Fund | Requested Budget Increase |
| Various Transfers to City Hall Construction (see above) | $1,390,753 |
| City Hall Construction Fund | 8,300,000 |
| Fleet Services | 107,000 |
| Property & Liability Insurance Fund | 466,183 |
| East Tax Increment Fund | 80,286 |
| Total increase in FY23 Budget Authority | $10,344,222 |