Title
Resolution to Amend Ann Arbor City Budget for Fiscal Year 2012 (8 Votes Required)
Memorandum
Attached for your review and approval, please find a resolution to amend the Ann Arbor City Budget for Fiscal Year 2012.
The Michigan Public Act 621 of 1978, as amended, provides that the City shall not incur expenditures in excess of the amounts appropriated. In order to comply with PA 621, the City's auditors have suggested the City monitor expenditures against the adopted budget on a periodic basis and appropriate budget amendments be adopted by Council as needed.
In monitoring the various funds, management has forecasted certain variances versus budget that require budget amendments to remain in compliance with PA 621. These variances and the reasons for the variances are listed on the attachment. This amendment is necessary because Council adopts the General Fund budget by Service Area so favorable variances in one Service Area may not offset unfavorable variances in another from a budgeting perspective.
The FY2012 General Fund expenditure budget is $79,642,485. The requested General Fund amendment is $1,351,461, which will result in an amended budget of $80,993,946. Despite this increase in budgeted expenditures, staff forecasts that the General fund will end the year with a net use of fund balance of less than ½ million dollars in FY 2012 due to other positive offsetting items.
For all funds outside of the General Fund, the requested budget amendment totals $2,836,100, which is primarily driven by refinancing a bond at a lower interest rate. The detail of the requested appropriations is attached.
Staff
Prepared by: Kenneth J. Bogan, Senior Finance Specialist
Reviewed by: Tom Crawford, CFO
Approved by: Steven D. Powers, City Administrator
Body
Whereas, On May 21, 2011, City Council adopted the annual operating budget for FY 2012 for the City of Ann Arbor;
Whereas, The Michigan Public Act 621 of 1978, as amended, provides that the City shall not incur expenditures in excess of the amounts appropriated;
Whereas, The City's auditors, Abraham & Gaffney, P.C., have suggested the City monitor expenditures against the adopted budget on a periodic basis and appropriate budget amendments be adopted by Council as needed;
Whereas, The City's management have monitored revenues and expenditures and have forecasted revenues and expenditures against the adopted budget;
Whereas, The forecasted expenditures are in excess of the City's adopted budget for some units in the General Fund, and certain other funds in total as listed below;
Whereas, The recommended appropriation will require a combination of an increased revenue budget, and the use of General Fund Balance; and
Whereas, The FY 2012 Budget Resolution authorized the City Administrator to transfer funds between services units within the designated service areas;
RESOLVED, That Council amend the General Fund revenue and expenditure budgets for the FY 2012 as indicated below, and that the remaining source of funding for the additional expenditures be use of prior years fund balance;
GENERAL FUND REVENUES |
CITY ADMINISTRATOR |
|
Clerk Services |
$ 165,000 |
SAFETY SERVICES |
|
Fire |
105,000 |
TOTAL GENERAL FUND REVENUES |
$ 270,000 |
|
|
GENERAL FUND EXPENDITURES |
CITY ADMINISTRATOR |
|
City Administrator |
$ 30,000 |
Clerk Services |
165,000 |
Human Resources |
60,000 |
NON-DEPARTMENTAL |
621,461 |
SAFETY SERVICES |
|
Fire |
105,000 |
Police |
250,000 |
PUBLIC SERVICES |
|
Field Services |
120,000 |
TOTAL GENERAL FUND EXPENDITURES |
$ 1,351,461 |
|
|
RESOLVED, That the following other funds' revenue and expenditure budgets for FY 2012 be amended as follows, and that the remaining source of funding for these expenditures be use of prior years fund balance:
REVENUES |
Fund |
Fund Name |
Amount |
0035 |
GENERAL DEBT SERVICE FUND |
$2,758,100 |
|
|
|
EXPENDITURES |
Fund |
Fund Name |
Amount |
0035 |
GENERAL DEBT SERVICE FUND |
$2,787,700 |
0024 |
PARKS ACQUISITION MILLAGE |
48,400 |
|
|
|
Submitted by: Financial and Administrative Services
Date: June 18, 2012
ATTACHMENT
City of Ann Arbor
Proposed Fiscal Year 2012 Budgeted Amendments
General Fund Revenues
Service Area/Unit |
Reasons |
Impact |
City Administrator: |
|
|
City Clerk Services |
Reimbursement for two elections |
$ 165,000 |
Safety Services: |
|
|
Fire Services |
Fire inspections |
105,000 |
|
|
|
Total |
|
$ 270,000 |
General Fund Expenditures
Service Area/Unit |
Reasons |
Impact |
City Administrator: |
|
|
City Administrator |
City Administrator moving expenses not budgeted |
$ 30,000 |
City Clerk Services |
Two unbudgeted elections |
165,000 |
Human Resources |
AFSCME President position was not eliminated on 12/31/2011, as planned in adopted budget |
60,000 |
|
|
|
Non-departmental |
Transfer to cover Court Facilities Fund shortfall |
45,000 |
|
Golf Fund subsidy higher than budgeted |
131,761 |
|
Tax refunds higher than budgeted |
444,700 |
|
|
|
Safety Services: |
|
|
Fire Services |
Equipment repairs and purchases |
105,000 |
Police Services |
Severances greater than budgeted |
250,000 |
|
|
|
Public Services: |
|
|
Field Services |
Higher than anticipated electricity costs for street lighting |
120,000 |
|
|
|
Total |
|
$ 1,351,461 |
Non-General Funds Revenues
Fund |
Reasons |
Impact |
General Debt Service Fund |
Refund 2003 MTF bonds - proceeds, transfer in, and bond issuance costs |
$ 2,758,100 |
|
|
|
Total Non-General Funds |
|
$ 2,758,100 |
Non-General Funds Expenditures
Fund |
Reasons |
Impact |
General Debt Service Fund |
Payment to bond escrow agent to refund 2003 MTF bonds, and bond issuance costs |
$ 2,758,100 |
|
Tax refunds higher than budgeted |
29,600 |
|
|
|
Parks Acquisition Millage |
Tax refunds higher than budgeted |
48,400 |
|
|
|
Total Non-General Funds |
|
$ 2,836,100 |