Background

The Fiscal Year 2017 budget was last amended on September 5, 2017 and included fiscal year-end projections.  Projections for the budget are based on conservative and reasonable estimates of how the year will end. These estimates do not include year-end accruals and adjustments necessary for reporting, because the budget and accounting are operated on slightly different approaches. The budget is appropriated on a cash basis, while the annual accounting report requires a modified accrual basis to be in compliance with the Government Accounting Standards Boards and Generally Accepted Accounting Principles. As a result of these differences there is sometimes a need for a final adjustment to the budget.

Since the projections amendment was completed, staff has prepared the unaudited fiscal year-end actuals and determined a final budget amendment is necessary for two funds - the  Employee Benefits Fund and the Photo Traffic Signal Enforcement Fund. In both instances these funds will end the year better than expected. As a result of better performance, these funds will need a final budget amendment to recognize both higher revenues and higher expenditures.

The Employee Benefits fund is ending the year better than expected with a projected ending fund balance $107,467 higher than anticipated in the FY17 current budget. The increase in fund balance is driven by higher than anticipated revenues from contributions, as well as miscellaneous revenues received from a stop-loss reimbursement. The increase in expenditures in this fund is driven by a large claimant that triggered the stop loss reimbursement. 

The Photo Traffic Signal Enforcement fund is ending the year better than expected with higher revenues and transfers out. This fund is required to maintain a zero fund balance since net proceeds are split evenly between the state and the City. The City’s portion of the net revenues are used to support traffic safety improvements. 

Employee Benefits Fund

The net impact of revenue and expenditure results in the Employee Benefit Fund ending the year better than expected by $107,467. This is higher than presented in the approved budget as a result of higher revenues.

Revenues

The revenues in the Employee Benefits Fund are anticipated to be $658,809 higher than budgeted. This is the result of higher than anticipated revenues from contributions, miscellaneous revenue from a stop loss reimbursement, and interest income.

Expenditures

The expenditures in the Employee Benefits Fund are anticipated to end the year higher than expected by $551,342. This is primarily a result of a large claimant that triggered the stop loss reimbursement.

Photo Traffic Signal Enforcement Fund

The net impact of revenues over operating expenditure results in the Photo Traffic Signal Enforcement Fund ending the year better than expected. This is higher than presented in the approved budget as a result of higher revenues and less operating expenditures.

Revenues

The revenues in the Photo Traffic Signal Enforcement Fund are anticipated to be $417,707 higher than budgeted. This is the result of higher revenues received later in the fiscal year. 

Expenditures

The expenditures in the Photo Traffic Signal Enforcement Fund are anticipated to end the year lower than expected by $139,651. This is primarily a result of lower operations and maintenance cost.  As a result, the transfers out to the State and City will be $746,553.

This fund is required to maintain a zero fund balance since net proceeds are split evenly between the state and the City. The City’s portion of the net revenues are used to support traffic safety improvements. 

Recommendation

On December 7, 2017, staff reviewed the proposed year-end changes with the City Council Finance/Audit committee, which supported the action.   Therefore, staff recommends approval of Ordinance No. 2123 amending the FY17 budget.