Revisions to the budget amendment policy to improve clarity on the use of general fund contingencies.

ADOPT RESOLUTION NO. 2022-2256 ADOPTING AND APPROVING THE BUDGET AMENDMENT POLICY BY THE CITY OF GOODYEAR. (Ryan Bittle, Finance Manager - Budget & Research)

There is no fiscal impact from adopting this policy. 

On February 24, 2020, the City Council adopted Resolution 2020-2039 that established the current budget amendment policy.  That policy provided for improved efficiency of day-to-day operations, minimized after the fact approvals of budget amendments by City Council, and hastened the administration of carryover budget reconciliations thereby reducing related overspending risk, while also providing for the City Council to act directly on budget amendments of significance.  

The financial system is set up to include hard stops that prevent transactions from moving forward when adequate budget is not available. Budget amendments within the system are set up to follow approval chains in compliance with the City Council adopted budget amendment policy which includes approval work flow. Approval workflows and business procedures are set up to direct budget amendments through the proper approvals prior to posting budget changes to department budgets or approving Council Action Reports for budget revisions requiring City Council approval. One hard stop in the approval process is that all amendments using contingencies require City Council approval.

Prior to FY2022 the City only budgeted contingency accounts for the 15% Policy Reserve Contingency and the general funds’ City Manager’s Contingency; both of which require City Council authorization prior to use, or notification immediately following use with after the fact approval.  Beginning in FY2022, budgets were adopted using specific contingency accounts including; City Manager’s Contingency, Restricted Fund Contingencies, CIP Reserves and Policy Reserves.  As these are all “contingency” accounts, the automated system interpreted all as requiring City Council authorization, even when other sections of the policy would allow for a lower level of approval. This system check resulted in the identification of clarifications needed to our policy to ensure that the intent is as clear as possible.

The modifications contained within this amendment policy capture the original intent of the policy that all uses of the 15% Policy Reserve Contingency and all uses of the general funds' City Manager's Contingency all require City Council approval.  Any use of contingency accounts in restricted funds or for those tied to CIP Reserves would follow other sections of the amendment policy allowing the City Manager to authorize amendments up to $75,000.

All other provisions in the proposed Resolution 2022-2256 regarding authorized budget amendments remain unchanged.