HomeMy WebLinkAbout8.3 Mod 04-05 ArticleXIIICITY CLERK
File # [155U-010
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 20, 2005
SUBJECT: 2004-2005 Budget Modification with Regard to Article XIII B of the
State Constitution
Prepared by: Carole Perry, Administrative Services Director and
Lisa Hisatomi, Administrative Analyst II
ATTACHMENTS: None
RECOMMENDATION/y Authorize appropriations to Reserves, any revenues in excess of
budgeted expenditures as of June 30, 2005, as outlined below.
FINANCIAL STATEMENT: This action will provide appropriations to Reserves in the amount of
any revenues received that are in excess of expenditures. This action
will not change the amounts authorized for expenditure. Actual
amounts appropriated to Reserves in each Fund will be identified
after the books are closed and all accruals recorded.
DESCRIPTION: This action requests authorization to "appropriate" all revenues received in the
current Fiscal Year 2004-2005 that are in excess of expenditures. The actual amounts involved will be
determined following the close of Fiscal Year 2004-2005.
Each year the City Council takes this action to protect the ability to utilize these reserves in future years,
without the risk of exceeding the State mandated Appropriations Limit. The State Constitution establishes
a limit on the amount of annual appropriations that can legally be made from "Proceeds of Taxes."
Although the City is currently well below the maximum Appropriations Limit, this action will protect
future expenditures from Reserves.
Under State Law certain funds can be excluded from the calculation of the total "appropriations" which
will be subject to the Limit. The law specifically excludes funds that have been "appropriated" to
Reserves in a prior fiscal year. When the Reserve Funds are eventually used, they are not subject to the
Appropriations Limit in the year utilized, since they were previously "appropriated" under the Limit
authorized in a prior year. In other words, if the City Council appropriated $500,000 to Reserves in Fiscal
Year 2004-2005 and the funds were used on a capital project in Fiscal Year 2006-2007, this expenditure
would not be subject to the Limit.
At the time of the adoption of the Fiscal Year 2004-2005 budget, the City Council directed Staff to
allocate an estimated year-end surplus of $251,713 to Reserves. The Reserves were earmarked for
Economic Uncertainty.
As part of the development of the Fiscal Year 2005-2006 Preliminary Budget, Staff has revised the
revenue and expenditure estimates for Fiscal Year 2004-2005. Those revised estimates project that the
COPIES TO:
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ITEM NO.
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HABudgetWgenda Statements\ExcessRevtoResemAGENDASTMT04-05.DOC
City's 2004-2005 year-end surplus will be approximately $3.0 million. Excluding the carry-over of
$764,439 in Capital Improvement Projects (ClP's), the $280,000 reserve established for Box Culvert
Maintenance and the $251,713 previously allocated to reserves by the City Council, the remaining
General Fund surplus is projccted at $1,658,931. This amount is higher than originally anticipated in the
Mid-Year report presented to City Council, primarily due to higher than expected revenues from sales
taxes, building pemllts and interest eanrings.
The Fiscal Year 2005-2006 Budget includes the known revenue reductions by the State of California. In
addition, the City has a number of projects in progress that will require additional contributions fÌom the
General Fund in the future. If the Fiscal Year 2004-2005 surplus exceeds Staff's estimate, Staff would
recommend that the additional amounts be allocated to address these projects, as delineated in the chart
below.
RECOMMENDED YEAR-END SURPLUS ALLOCATION
Previously
Authorized Recommended
Additions / Additions /
(Reductions) to (Reductions) Projected Ending
Reserves In to Reserves in Balance as of June
PROJECT FY2004/2005 FY2004/2005 30.2005
Economic Uncertain~ $251,713 $ 0 $251,713
Capital Project Carryovers $ 0 $ 764 439 $764,439
Future Restricted Projects $ 0 $ 1,658,931 $1,658,931
Box Culvert Maintenance $ 0 $ 280 000 $280,000
TOTALS: $251,713 $2,703.370 $2.955.083
Staff recommends that the City Council authorize the appropriation of an excess rcvenues to Reserves in
conformance with this report.
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