HomeMy WebLinkAbout4.02 Budget Modification 08-09}~~\
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CITY CLERK
File # ^ 3^ 3^ D^-Q~
AGENDA STATEMENT
LITY COUNCIL MEETING DATE: June 23, 2009
SUBJECT: 2008-2009 Budget Modification with Regard to Article XIII B of the
State Constitution
Prepared by: Paul S. Rankin, Administrative Services Director ~~-
ATTACHMENTS: None
RECOMMENDATION: Authorize as Appropriations to Reserves any revenues in excess of
DESCRIPTION: This action requests authorization to "appropriate" all revenues received in the
current Fiscal Year 2008-2009 in excess of expenditures. The actual amounts involved will be determined
following the close of the Fiscal Year 2008-2009 financial records.
budgeted expenditures as of June 30, 2009.
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FINANCIAL STATEM 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.
Each year the City Council takes this action to establish the future ability to utilize any reserves derived
from taxes, without the need to determine whether the expenditure of reserves are subject to 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." 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 rp for 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 2006-2007 and the funds
were used on a capital project in Fiscal Year 2009-2010, the expenditure of those funds would not be
subject to the Limit.
What is unique about the current year is that unlike past fiscal years increases in reserves are not
anticipated. The City has had to use reserves to address current year expenditures including those in the
General Fund. As part of the development of the Fiscal Year 2009-2010 Preliminary Budget, Staff has
revised the revenue and expenditure estimates for the year. The revised estimates project that the City's
Fiscal Year 2008-2009 existing reserves for all funds will decrease by $187,708. Some funds will have
funds collected in excess of the projected expenditures. The General Fund Reserves are projected to have
an $823,000 decrease due to the need to utilize reserves to accommodate revenue shortfalls as previously
presented to the City Council.
Staff recommends that the City Council authorize as appropriations to reserves any revenues in excess of
budgeted expenditures as of June 30, 2009.
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