AGENDA #4b

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            Kenneth C. Pennoyer, Business Management Director

 

SUBJECT:       Year-End Budget Amendment for 2007-2008

 

DATE:             June 25, 2008

 

The attached year-end budget amendments primarily reflects technical accounting and budget adjustments or transfers for the General Fund that do not affect the overall current revenue and expenditure estimates for the funds as presented in the Manager's Recommended Budget for 2007-08.  The amendment this year provides for recognition of certain one-time revenues and expenses resulting in minor budget adjustments.  It also recognizes the additional $325,000 in federal Transit operating grant.

 

Below is a brief description of the adjustments by fund.

 

General Fund

 

In the General Fund, the attached amendment would:

• Formally appropriate $15,000 for legal fees related to settlement of a Housing lawsuit.
• Allocate $2,800 for raises in the Attorney’s office, not budgeted with other employees.
• Increase appropriations in the Finance Department by $40,000 to reflect additional expenditures for tax collection with Durham County related to the settlement of a multi-year tax dispute and for temporary salaries during the transition of the department.  The additional costs would be funded from additional property tax revenue received in the current year from the tax settlement.
• Appropriate a transfer of $21,000 to the Vehicle Maintenance Fund for proceeds from insurance claims for damage to Town vehicles to cover the cost of repairs.
• On September 10, 2007, an ordinance was approved by Council to budget Project Turnaround in the Grant Fund, including the transfer of positions and revenue sources from the General Fund.  That amendment budgeted Project Turnaround revenues in the Grant Fund but failed to reduce Juvenile Turnaround revenues budgeted in the General Fund for $46,000.
• Due to a change in the withholding formula/frequency, some of the funds collected for the prior year’s employee medical, life and disability insurance coverage were not paid until the current fiscal year, but the funds were not encumbered and became part of the fund balance at the end of FY07. This amendment would appropriate $12,353 for the amount not encumbered and not carried forward to the current fiscal year.
• The Town has historically provided support for the arts through a contribution to the Chapel Hill Public Arts Commission, which is budgeted as an agency contribution in the Non-Departmental division of the General Fund.  The position of Art Director was incorporated into the Town directly as a division of the Manager’s office, and the new director will begin work in June.  A budget amendment of $3,500 is needed to transfer the funding from Non-Departmental to the Manager’s budget to cover the position in the current year. 
• On April 28, 2008, the Council decided to allocate any remaining funds in the Council’s contingency to the NC Botanical Garden to aid in the purchase of open space land.  The balance remaining is $29,816, and a budget amendment will transfer the budget from Council’s Contingency to Contributions.
• Transfer to Grants Fund –  We have expenditures in excess of funding for the SAFER grant due to per-person spending caps that are part of the grant.  The Town’s raise and the payment of overtime caused some firemen funded by the grant to exceed the cap.  A transfer to the SAFER grant of $10,000 may be made from state funding for fire protection received in the current fiscal year over the budgeted amount.
• The May 19, 2008 budget amendment to accept a Federal Highway Administration Section 104(f) grant requires a transfer from the General Fund that was not included as part of that amendment. There are funds available in the Planning Department through lapsed salaries to make the transfer of $16,991.
• Continued funding has not been determined for Project Turnaround, the alternative sentencing program conducted by the Police Department in conjunction with the State and Orange County.  Police permits sold in the current year exceed budget by $20,000, and we would set aside that additional revenue as a transfer to the grant fund to provide potential funding for continuation of Project Turnaround pending budget decisions by the State and County.
• In the current year, the reorganization between the Communications and Public Affairs office and the Manager’s office has resulted in $17,000 in one-time additional costs.
• The unprecedented increase in fuel prices in the current year has resulted in the need to redistribute the available fuel budget to accommodate the unavoidable cost overruns among departments.  Most of the cost overruns have been absorbed by departments through delayed hiring or other austerity measures, but with special events costs already accommodated, a transfer of $15,000 to Police for fuel is required.
• To record receipt and appropriate the use of a $500 donation for youth league baseball awarded by Chevy Youth Sports.

Grants Fund

 

• To budget a transfer of $10,000 from the General Fund to cover SAFER grant expenditures in excess of the grant’s salary caps.

 

Public Safety Bond Fund

 

• To recognize residual revenues received and authorize expenditure of the remaining $4,202 on public safety buildings.

 

Vehicle Maintenance Fund

 

• To appropriate $21,000 for repairs to Town vehicles following accidents, to be funded by a transfer from the General fund of insurance claims received during the year.

 

Vehicle Replacement Fund

 

• To appropriate an accelerated loan repayment related to the 2005 vehicle replacement program.  Vehicle replacement purchases were delayed in 2005 due to budget changes made in conjunction with Budget Review Advisory Committee, although the loans for that year had already been secured.  $274,334 of the loan proceeds has been applied to pay off the principal of the debt instead and must be budgeted as debt service.

 

Transportation Fund

 

• To appropriate additional federal funding received for capital maintenance over the amount budgeted for the current fiscal year.  The additional $325,000 in Section 5307 funding will replace bus transmissions and perform other similar capital maintenance.

 

RECOMMENDATION

That the Council enact the attached year-end budget amendment [2008-06-25/O-1], [2008-06-25/O-2] for 2007-08.