HomeMy WebLinkAboutCity Council Resolution 15-006 - Amending Annual Budget for FY 201415 to Adjust Revenue and Expenditure Appropriations RESOLUTION NO. 15-006
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
AMENDING THE ANNUAL BUDGET FOR FISCAL YEAR 2014/15
TO ADJUST REVENUE AND EXPENDITURE APPROPRIATIONS TO REVISED LEVELS
WHEREAS, the City of Saratoga's FY 2014/15 Operating and Capital Budget revenues and
expenditures were reviewed at mid-year and projected through year-end to determine estimated activity
for the fiscal year,and;
WHEREAS, it was determined that estimated revenues and expenditures would exceed
budgeted revenues and expenditures in several funds and;
WHEREAS, it was determined that this would result in actuals exceeding budget, and;
WHEREAS, the City Council desires to adopt revenue, expenditure, transfers, and/or use of
fund balance appropriations at the revised projection levels to reflect accurate planning levels,and;
WHEREAS, it is necessary to amend the City of Saratoga's FY 2014/15 budget to adjust
revenue and expenditure appropriations where necessary to be in alignment with the revised projections;
NOW THEREFORE,BE IT RESOLVED,that the City Council of the City of Saratoga hereby
amends the Fiscal Year 2014/15 Operating and Capital Budgets as described in the Council's Mid-Year
Budget Status Report brought to Council on February 18, 2015;
AND BE IT FURTHER RESOLVED,that the Finance and Administrative Services Director is
directed to record these changes into the City's accounting records in accordance with appropriate
accounting practices.
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga City
Council held on the 181 day of February,2015 by the following vote:
AYES: Mayor Howard A. Miller, Vice Mayor Manny Cappello, Council Member
Emily Lo, Mary-Lynne Bernald, Rishi Kumar
NOES: None
ABSENT: None
ABSTAIN: None 1
/ V
WowardMiller,6i
Mayor
TEST:
DATE: (G 1
Wt 1 Bothelio, City Clerk
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SARATOGA CITY COUNCIL
MEETING DATE: February 18,2015
DEPARTMENT: Finance &Administrative Services
PREPARED BY: Mary Furey
SUBJECT: FY 2014/15 Mid-Year Budget Status Report and Budget Adjustment Resolution
RECOMMENDED ACTION:
Review the FY 2014/15 budget status report and proposed budget adjustments, and adopt the attached
resolution approving the City's FY 2014/15 mid-year budget amendments.
REPORT SUMMARY:
General Fund Revenues
After a mid-year assessment, conservative projections indicate that General Fund revenues will
significantly exceed budget—most notably with an additional $460,000 of Property Tax revenues. This
increase is partly attributable to an unexpected ERAF allocation of$210,000, but also from higher than
anticipated assessed valuation growth, leading to a $150,000 increase in Secured Property Tax and a
$100,000 increase in Supplemental Property Tax receipts. A number of other General Fund revenue
categories will also exceed budget expectations, however only these three Property Tax revenue
increases are individually substantial enough to request a budget adjustment.
DataQuick, a leading property data firm, issued a January 2015 report which supported the perception of
a very strong housing market in Santa Clara County— however, information also suggests that housing
prices are flattening. They noted that countywide home buying activity increased in December after a
several month stall, which may be attributable to sales prices averaging lower than they had been earlier
in 2014. Their data shows the number of home sold increased by 14.1 percent from the prior December,
and that average sale prices increased by nearly 10 percent from a year ago — leading to overall higher
assessed values and tax revenues. However, while they noted that "December 2014 was the 33rd
consecutive month with a year-over-year gain in the median sale price, they also noted that "those
annual increases slipped from double-digit increase to single-digit in the last two months of 2014."
This countywide year-over-year gain trend will be watched closely as it indicates the pace of assessed
valuation growth. Even though Saratoga's sales prices did not align with countywide results, (November
2014 housing sales were quite strong (19) with a 13.4% price increase from a year ago, while
December's sales (18) prices decreased by 3.08%), the countywide perception will impact Saratoga's
housing market. DataQuick's anticipated surge in sales during the spring and summer months will
contribute to higher Document Transfer Tax and Supplemental Property Tax revenues, while the
anticipated trend toward sales price flattening will hinder assessment value growth, thereby suggesting a
conservative Secured Property Tax growth factor should be used for future year projections.
Other General Fund revenues are fairly close to budget, with some revenues coming in slightly higher,
and others slightly lower than budgeted. While adjustments impact budget projections, overall total
revenues are expected to remain steady but growing slowly into the near future.
General Fund Expenditures
Due to staffing turnover during FY 2014/15 (five positions), and the time required for position
assessment and rehiring, Salary&Benefit expenditures will fall below budget this fiscal year. However,
with the limited number of City staff, all positions are critical to maintain service levels — hence
temporary staff hires, consultants, and/or contract service firms are utilized to support workload and
mitigate impacts. This in turn increases temporary staff and contract costs, and as a result, salary savings
will be offset by higher operational costs.
The remainder of operating expenditures for items such as supplies and materials, fees, consultant
services, contract services, utilities and such, are for the most part in line with budget. Operational
program savings will help to balance out any areas where there are overages. The remaining expenses,
for Public Safety services, grant awards, and Internal Service Fund support charges are, by the nature of
what they are,very predictable and hence remain in line with budgeted allocations. Overall,the budget is
in line with expectations, and there are no mid-year expenditure budget adjustments requests for the
General Fund.
Other Funds
The remaining funds, such as all the Landscape and Lighting District Funds, Internal Service Funds, and
the Capital Project Funds operate within restricted financial resources,therefore financial activity is more
structured and workload does not fluctuate significantly with changes in the economy. These other
revenues and expenditures are determined at budget adoption, are more limited in nature, and as a result,
financial activity generally follows along a planned path. As a result, the mid-year budget update report
is primarily focused on General Fund activity.
Budget adjustments for these other funds occur occasionally, most often from unknown factors at the
time budget is prepared and adopted. This year however, there are a few budget adjustment requests for
corrections, three in the Equipment Replacement Fund, and one in the Streets Capital Program Budget
Fund.
Equipment Replacement Fund
The prior year FY 2013/14 budget included funding for the replacement of a mower and a sod
cutter. While staff began the purchase process during the fiscal year, the purchases were delayed
by bid errors and resulted in the purchase finalizing after the 2013/14 fiscal year closed. As the
delay was not communicated, funding was not carried forward into the FY 2014/15 budget. The
unspent dedicated funding is available for the purchase as last year's unspent funds fall into the
Equipment Replacement Fund's fund balance. The third correction is for the purchase of a
Bomag asphalt roller. The budget listed the purchase at $25,000 in the budget document
however, the replacement cost was $40,000.
Budget adjustments are requested to increase expenditure appropriations in the amount of
$11,196 for the mower, $7,847 for the sod cutter, and $15,000 for the asphalt roller. Funding is
available in the Equipment Replacement Fund's fund balance.
Streets Capital Program Budget Fund
In the Capital Program Funds,unspent budget appropriations are considered"carryforward"funds for use
in the following year's expenditure budget, until the capital project is either completed or closed out.
One project's carryforward funding was missed and not included in the budget presented and approved
by Council. Therefore, a budget adjustment is requested to increase expenditure appropriations for this
project, the TDA grant-funded Saratoga Avenue Sidewalks project, in the amount of $66,123 for the
unprogrammed carryforward funds.
The following schedule identifies all of the requested budget adjustments with item name, account
number, and amount:
REQUESTED BUDGET'ADJUSTMENTS
Adopted Proposed Adjusted
GENERAL FUND Budget Increase Budget
Revenues
Secured Property Taxes 111.8101.41111 5,850,000 150,000 6,000,000
Supplemental 111.8101.41115 80,000 100,000 180,000
ERAF III 111.8101.41116 - 210,000 210,000
EQUIPMENT REPLACEMENT FUND
Expenditures
Mower 631.5203.77211 - 11,196 11,196
Sod Cutter 631.5203.77211 - 7,847 7,847
Asphalt Roller 631.5203.77212 25,000 15,000 40,000
STREET CAPITAL IMPROVEMENT PROGRAM FUND
Expenditures
Saratoga Ave Sidewalk Carryforward 431.9142-005.81161 - 66,123 66,123
TOTAL Requested Budget Adjustments 560,166
FISCAL IMPACTS:
Upon Council approval,the proposed revenue and expenditure budget appropriations will be amended.
ATTACHMENTS:
Attachment A—Resolution