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FROM: DIRECTOR OF FINANCE AND INFORMATION TECHNOLOGY
DATE: OCTOBER 3, 2006
SUBJECT: FY05-06 YEAR-END BUDGET ADJUSTMENTS
Staff Coordinator: Kathryn Downs, Deputy Director of Finance and Information Technology
Adopt Resolution No. 2006- , amending Resolution 2005-53, the budget appropriation for FY05-06, to increase budgeted appropriations in the General fund, Measure A Capital fund and Bikeways fund.
This is an annually recurring staff report (with accompanying resolution) for the sole purpose of ensuring budgetary compliance for FY05-06, which ended on June 30, 2006. Staff anticipates that the excess of revenues over budget and additional expenditure savings for FY05-06 will significantly offset the additional budget requests contained herein. Therefore, the Schedule of Estimated General Fund Reserves as of June 30, 2007 has not been reduced.
Chapter 3.32 of Title 3 of the Rancho Palos Verdes Municipal Code sets forth guidelines related to the City’s budget administration. Section 3.32.070 of the Code requires that all expenditures in excess of a program/function’s budgeted allocation must be approved by supplemental appropriation by the City Council. While compiling the FY05-06 expenditures for the City, it was determined that four programs within the General fund and the Measure A Capital fund exceeded the amount budgeted. Therefore, a supplemental appropriation in each of these programs will be necessary to satisfy budgetary compliance. A discussion of the requested adjustments to the programs follows.
City Manager Program – General Liability Insurance
The City’s general liability insurance expenditure includes two components: 1) the calculated premium; and 2) a retrospective calculation based on actual incurred losses. The calculated premium for FY05-06 was about $17,000 more than expected. The retrospective calculation varies from year to year, and is difficult to predict. For FY04-05, the City received $6,623 based on the retrospective calculation; however, for FY05-06, the City was required to pay $184,713. The FY05-06 retrospective payment was a result of the City incurring overall losses totaling $7.7 million since the last retrospective calculation. The $7.7 million loss figure includes $6 million for the Ho family settlement related to a 2002 traffic accident. To ensure budgetary compliance for the general liability insurance expenditure, Staff requests a budget adjustment of $200,103 for the City Manager program.
City Attorney program expenditures of $1,112,520 exceeded the budgeted amount of $1,000,000 by $112,520. The City Council directed the City Attorney to prepare extensive written reports describing the legal strategies employed by the JPIA attorneys defending the Monks case; prepare detailed reports on case law that may affect the case; respond to questions raised by the City Council and interested outside attorneys regarding other possible legal strategies that could be employed in the Monks case; evaluate these other possible strategies; work closely with the JPIA attorneys on the case; and provide regular reports to the City Council on the status of the case. Our costs for these special services in April, May and June alone were over $100,000. Staff requests a budget adjustment of $112,520 to ensure budgetary compliance in this program.
Geo-technical consultant services are used to review the need for privately initiated geo-technical project reports. The actual cost of geologic services varies each year depending upon the level of activity that occurs. The FY05-06 expenditure budget for Geo-technical Services was $228,100. Actual expenditures were $244,778. The City collects fee revenue that primarily offsets the expenditures. The FY05-06 budget for Geo-technical fee revenue was $228,100, and actual fee revenue was $219,600. Staff requests an expenditure budget adjustment in the amount of $16,678 to accommodate the additional geo-technical activity.
Operating Transfer Out For Point Vicente Interpretive Center (PVIC)
The FY05-06 budget included Measure A Capital funding of $141,563 for the PVIC expansion project completed in FY05-06. The actual Measure A Capital funding available for the project was $151,563. The additional Measure A Capital funding partially offset a use of the Capital Improvement Projects (CIP) fund balance for the project. Staff requests a budget adjustment to facilitate the additional $10,000 of restricted revenue that was available for the project.
Return Of Grant Revenue For Ineligible Project Expenditures
During FY04-05, the City received $24,887 of grant revenue from the Transportation Development Act Article 3 fund for use in the FY05-06 Residential Overlay project. Only $24,554 of project expenditures is eligible for funding. During FY05-06, the City returned $333 of grant revenue in excess of eligible expenditures, plus $40 of accumulated interest earnings to Los Angeles County. The total $373 disbursement was not budgeted in FY05-06; therefore, Staff requests a budget adjustment to ensure budgetary compliance.
As stated previously, Staff anticipates that the excess of revenues over budget and additional expenditure savings for FY05-06 will significantly offset the additional budget requests contained herein. Therefore, the Schedule of Estimated General Fund Reserves as of June 30, 2007 has not been reduced. Finance Staff has taken the initiative to ensure that these additional budget requests did not increase the appropriations continued to FY06-07.
RESOLUTION NO. 2006 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
WHEREAS, Section 3.32 of the Rancho Palos Verdes Municipal Code provides that all expenditures in excess of budgeted allocations must be by supplemental appropriation of the City Council: and
WHEREAS, on May 31, 2005, the City Council of the City of Rancho Palos Verdes adopted Resolution 2005-53, approving a spending plan and authorizing a budget appropriation for FY05-06: and
WHEREAS, certain programs included in the FY05-06 budget will have expenditures in excess of the adjusted budget; and
WHEREAS, the City Council desires that the FY05-06 budget be increased for each of these programs to assure budgetary compliance.
BE IT, THEREFORE, RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES:
The following adjustments be made to the FY05-06 budget:
Increase the General fund budget as follows:
Increase the Measure A Capital fund budget as follows:
Increase the Bikeways fund budget as follows:
PASSED, APPROVED, AND ADOPTED THE 3rd DAY OF OCTOBER 2006.
State of California )
I, CAROLYNN PETRU, City Clerk of The City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2006- was duly and regularly passed and adopted by the said City Council at regular meeting thereof held on October 3, 2006.