BUDGET WORKING PAPER

TO: W. Calvin Horton, Town Manager

FROM: Gregg Jarvies, Interim Police Chief

DATE: March 28, 2000

RE: Follow-up from Budget Work Session

Two issues required clarification from the Police Department’s budget work session with the Council.

The department’s FY 2000-2001 costs for the vehicle replacement program to replace vehicles in the Police Department will be $255,255. The department’s FY 2000-2001 costs for the computer replacement program to replace computers in the Police Department will be $7,305. These funds will be transferred from the General Fund to internal service funds for making lease-purchase payments on vehicle and computer replacements. Below is a brief description and summary of the internal service funds and use of replacement charges.

Vehicle Replacement Fund

In the 1998-99 budget, an internal service fund called the Vehicle Replacement Fund was established to account for the replacement of vehicles for the General Fund departments which are purchased through vehicle installment contracts for three and five-year periods.

Under the vehicle replacement program, the costs for replacing vehicles for each department are shown in each department’s budget as a line item “vehicle replacement charges.” This line item reflects charges by the Vehicle Replacement Fund for lease-purchase payments on installment contracts executed each year for the purchase of vehicles in each department. The capital costs of the vehicles and the actual lease-purchase payments are reflected in the Vehicle Replacement Fund.

The vehicle replacement charges from each department in the General Fund reflects amounts that are transferred to the Vehicle Replacement Fund as the source of funding for making the lease-purchase payments on the vehicle installment contracts. Proposed vehicle replacement charges of $255,255 for the Police Department budget for next year reflect accumulated costs for on-going payments for police vehicle purchases last fiscal (1998-99), the current budget year (1999-2000) and for next year’s budget.

Computer Replacement Fund

An additional internal service fund was established this year to account for the replacement of desk-top computers in the General Fund on a three-year cycle. This fund functions in the same way as the Vehicle Replacement Fund. Charges are made by this fund to each department in the General Fund that reflect that department’s cost of lease-purchase contracts for the replacement of computers.

Computer replacement charges of $7,305 in the Police Department reflect the lease-purchase costs in 2000-2001 of computers purchased last year for the Department. No additional desk-top computers are scheduled for replacement in the Police Department next year.