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Home My WebLink About12- Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Barbara Pachon Subject: Mid-Year Budget Director of Finance Amendments Fiscal Year 1999-2000 Dept: Finance t ^ r e r f Date: 3/20/00 OR, � i f Y A` Synopsis of Previous Council Action: 7/6199 Resolution 1999-167 approving and adopting the Final Budget for FY 1999-2000 2/23/00 FY 1999-00 Mid-Year Budget Report referred to full Council by Ways & Means Committee. 3/6/00 FY 1999-00 Mid-Year Budget Report received and filed by Mayor and Common Council Recommended motion: That the Director of Finance be authorized to amend the FY 1999-00 Budget as outlined in the attached staff report. / Z" Signature Contact person: Barbara Pachon, Director of Finance Phone: 5242 Supporting data attached: staff report Ward: FUNDING REQUIREMENTS: Amount: N/A Source: (Acct. No (Acct. Description) Finance: Council Notes: 31aol I OL STAFF REPORT Introduction The FY 1999-00 Mid-Year Budget Analysis report was presented to the Ways and Means Committee on February 23, 2000. Outlined in the accompanying staff report were a number of issues that were brought to the forefront during the Mid-Year Budget Review process. The purpose of this staff report is to address the budgetary impact of those issues and present recommendations in one consolidated report. These adjustments do not change the ending fund balances projected in the Mid-Year report. The recommendations were factored into the Mid-Year Report estimates; the recommendations below are to formally amend the budget to match the assumptions made during the Mid-Year review process. The issues in this report are organized by department. Fleet Division Fuel Charges The Fleet Division indicated in their Mid-Year Budget submittal that they would exceed their fuel budget by approximately $300,000. According to the Director of Public Services, the average price of unleaded fuel at Mid-Year 1999-00 was $1.12, which is approximately 31% higher than the average price for FY 1998-99. Based on industry analyst information, Fleet predicts that the average price of fuel could increase up to another 20% by the end of the fiscal year. Based on Fleet's estimates, it is recommended that the Fleet line item for fuel (635-341-5113) be increased by $330,000. Because Fleet is an internal service department, the increase in fuel charges is charged directly back to the user departments. Departments with large fleets, such as the Police Department and the Refuse Division will be most impacted. $115,000 of the $300,000 will come from the Refuse Fund. Savings in Refuse Fund's debt service line item will be transferred to the fuel line item. The use of these savings for increased fuel costs was already factored into the Mid-Year report. Similarly, the Animal Control Fund fuel budget will be increased by $6,000 and the Sewer Fund fuel budget will be increased by $4,000. Animal Control is utilizing salary savings to offset this increase and the Sewer Fund is utilizing savings in the materials and supplies line item. The Police department is the General Fund department most impacted by increasing fuel costs. They will utilize $114,000 in salary savings to offset their anticipated fuel costs. The following General Fund Departments will also utilize salary savings to offset increased fuel costs (as was assumed in the Mid-Year report expenditure analysis): Development Services ($11,000); Fire ($17,000); Facilities Management ($4,000); Code Compliance ($4,000); Parks & Recreation ($11,000); and Public Services ($14,000). It is projected that the General Fund will still meet the budgeted vacancy factor overall after these amendments are approved. 1 Garage Charges: It appears that the Police Department will be over budget on garage charges by approximately $90,000. It is recommended that the Police Department budget be amended and salary savings be utilized to offset the increased garage maintenance charges. Use of salary savings to offset increased fuel costs was factored into the Mid- Year Report. Fire Department Based on past year's history, and the first six months of this fiscal year, it appears that the Fire Department will be over budget by approximately $255,100. The biggest factor contributing to this overage is the high rate of overtime usage. Based on discussions with the Fire Department, it is estimated that the Fire Department will be over their overtime budget by approximately $578,000. This assumes that the usage rate for the second half will be slightly lower (as it has been in prior years). Also, according the Fire Department, $115,000 of the overtime in the first of half of FY 99-00 was attributed to the mutual aid response to the Willow Fire in the Apple Valley area this past fall. The Fire Department does have some vacancies and savings in other areas that will offset this overage of $578,000 by $322,900. Therefore a net increase to the Fire Department budget of $255,100 is anticipated at this time. This estimate was factored into the Mid-Year Report. Police Department In order to track grant expenditures more consistently, all Police Department positions funded by grant funds will be moved into the Police Department's General Fund budget. A corresponding credit will also be budgeted to reflect the amount of the expenditure to be transferred to the grants. This is an accounting change only, there is no net impact to the General Fund or the Police Department's budget. Mayor's Office The Mayor's Office reorganized in August of 1999 and as part of the reorganization included $13,500 for a part-time typist clerk position. The Mayor's Office has been using a temporary agency to fill this position so funds budgeted in part-time salaries need to be moved to the contractual line item since we are paying through an agency, and not paying an employee through payroll. This is an accounting/classification change and there is no net impact to the General Fund. Code Compliance During the FY 1999-00 budget preparation process, Code Compliance was allocated $731,700 in CDBG funding for demolitions. At that time Code Compliance and EDA agreed to let EDA administer $200,000 of the $731,700 and did not include this $200,000 in the Code Compliance's FY 1999-00 budget. Since that time, Code Compliance staff and EDA have determined that $100,000 of the $200,000 should be administered directly by Code Compliance. Additionally, at the 10/18/99 Council meeting, the Mayor and Common Council reallocated an additional $200,000 for Code Compliance demolitions. 2 Combined, these two decisions will increase Code Compliance's demolition budget by $300,000. The budget will also be amended to reflect the $300,000 to be received in revenue reimbursement from EDA, so the net impact to the General Fund is zero. Code Compliance does not anticipate that they will expend all of these funds this fiscal year and will request to carry them over to the next fiscal year. Refuse Fund The Refuse Division utilizes the services of part-time interns to work on recycling projects. $15,000 was included in the Refuse Division's professional contractual budget line item for this expense. However, funds for interns are more appropriately classified as part-time salaries, therefore the $15,000 should be moved to this line item. Additionally, Refuse has identified some grant funds that intern time can be charged to, so a credit in the amount of $15,000 will also be budgeted to reflect this. This is an accounting/classification change that will have no net impact to the Refuse Fund. Sewer Line Maintenance Fund The Sewer Line Maintenance Division utilizes the services of part-time interns to work on special projects. $5,000 was included in the Sewer Line Maintenance Division's professional contractual budget line item for this expense. However, funds for interns are more appropriately classified as part-time salaries, therefore the $5,000 should be moved to this line item. This is an accounting/classification change that will have no net impact to the Sewer Line Maintenance Fund. CATV Per Diem Employees As part of their budget reduction plan during the FY 1999-2000 budget process, CATV eliminated a number of part-time positions and one full time position and decided to contract with per diem employees as needed on special projects. CAN staff now anticipates that they will have more revenue generating contracts than expected and will need to increase their per-diem budget accordingly to accommodate these contracts. $12,000 in salary savings from a vacant position will be transferred to the per-diem line item to cover the cost of per-diem employees for the year. Programming Equipment CAN also purchased $5,300 in equipment required to facilitate the splitting of programming on Channel 3. The equipment was paid out of savings in the CATV materials and supplies line item. These items are more appropriately classified as capital outlay. This is an accounting/classification change only, the expenditure was factored into the Mid-Year budget projections. Recommendation That the Mayor and Common Council authorize the Director of Finance to amend the FY 1999-2000 budget as outlined in the staff report. 3