BACKGROUND:
Each year City staff prepares and proposes a budget amendment to bring forward the funds encumbered at the end of the previous fiscal year. Approval of these FY2009 encumbrances (purchase orders) makes the funds available for expenditure in the current fiscal year, FY2010.
Impact on budget
The specific amounts per account, department, and vendor are described in Exhibit "A" of the attached ordinance. The overall impact is shown in the table below:
| Fund | Adopted Budget | Encumbrances | Amended Budget | | General | $26,803,045 | $819,033 | $27,622,078 | | Utility | $12,823,368 | $245,731 | $13,069,099 | | Sanitation | $2,887,655 | $14,122 | $2,901,777 |
Impact on financial position
The proposed budget amendment would increase authorized expenditures, which would in turn reduce fund balances when the expenditures occur. If all encumbrances were converted into expenditures, the impact on fund balance would be as follows:
| Fund | 9/30/09 Balance | Encumbrances | Revised Balance | | General | $4,262,067 | $819,033 | $3,443,034 | | Utility | $2,812,204 | $245,731 | $2,556,473 | | Sanitation | $754,130 | $14,122 | $740,008 |
This potentially reduces the balances in the General and Utility Funds below their stated minimum levels. Fund balance minimums are 2/12 of annual operating expenditures for the General Fund ($4,467,174) and 3/12 for the Utility Fund ($3,205,842). This means no other drawdowns of fund balance should occur until the balances are well above the minimum amounts.
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