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05. Resolution 4671 - Calling for Public Hearing - Budget AmendmentsCity of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 REPORT TO: FROM: SUBJECT: MEETING DATE: Mayor Boharski and City Council Members Amy Robertson, Finance Director Chris Kukulski, City Manager Resolution calling for a public hearing to amend the fiscal 2002 budget. November 19. 2001 BACKGROUND: There are eight areas of the budget which need amendments and require a public hearing prior to council action on a resolution. This resolution is calling for that public hearing. There will be an additional resolution for the December 3" meeting to appropriate the necessary funds. Attached you will find a summary of each requested budget amendment. RECOMMENDATION: Adoption of this resolution. FISCAL EFFECTS: $3,955,315 increased budget authority ALTERNATIVES: As suggested by Council. Amy H. Robertson Chris A. Kukulski Finance Director City Manager Report compiled: November 14, 2001 Attachment: explanatory page $49,169 General fund appropriation for loans to 34 salaried employees to allow them to transition to a bi-weekly payroll. The change over to a bi-weekly payroll will cause a shortfall of 88 hours per employee. These loans to employees are not salary and will not be taxed or appear on the w-2. The employee has the option of making monthly payments or having it deducted from their severance check whenever they depart City employment. The payroll department will track these loans. Budget authority is needed to write these checks. They will appear on the check approval list for the December 3 d meeting and be issued December 10' (assuming Council approval) on the P. These funds will come from the General Fund reserves. 2. Retirement of the City Attorney with a severance package that continues to pay him until year end necessitates a budget amendment to allow hiring a new City Attorney. We need an appropriation for 5 months salary and also an appropriation for increased wages for the interim City Attorney. Additionally, we need budget authority to pay out $20,600 in accrued vacation and sick leave to the City Attorney. These funds will come from the General Fund cash carryover with the money for the vacation and sick leave payoff coming from the reserve for compensated absences. 3. The changes in the City Attorney budget require an increased appropriation for the retirement fund to pay the city's share of PERS. The funds will reduce the cash carryover amount in the budget. 4. The changes in the City Attorney budget require an increased appropriation for the Health Insurance fund to pay the health insurance premium for the new City Attorney while continuing to pay the retired attorney's insurance per his severance package. The funds will reduce the cash carryover amount in the budget. 5. The General Fund fire budget needs an appropriation to pay for a piece of equipment which initially was going to be provided by the County. The City's request for reimbursement for the Burlington Northern hazmat call out was going to be traded for the equipment along with the City providing use of the equipment to the County. This was an inappropriate accounting procedure which our auditors informed the County they could not do. We have received a check for the County for the hazmat reimbursement in the amount of $3200, we will purchase the equipment which is currently on site and we will bill the County for future use of this service. The equipment is a port -a -count respiratory fit test unit, retailing for $7,995 which we will purchase as a demo for $6,500. The difference of $3,300 will come from General Fund cash carryover. 6. We need an additional $3,500 budget authority in the SID 343 debt service fund to make the interest payment due this year. Our estimates were too low in the original budget. The cash is available from our assessments to the property owners. The project for Hwy 93 North water main at Main & Idaho has not yet been closed out by MDOT. We currently have invoices totaling $135,600 to be paid to the State. We have a commitment from the State for the SRF loan program to draw down the remaining $100,000. There may still be an additional claim and so we are requesting budget authority for $140,000 to complete this project. The additional $40,000 will be paid out of replacement reserves in the Water Fund. 8. The final amendment is to create a capital project fund for the swimming pool construction. It will be fund 4190 and will have an appropriation for $3.7 million for construction costs, engineering and bond issue costs. The revenue budget will show proceeds of bonds. The bonds should be issued close to the time construction commences in the Spring. General Fund budget status: We have a line item in the General Fund for $50,000 for a contingency. We anticipate that half of that amount will be part of a personnel settlement in January. Additionally, we have need to make budget transfers to cover some shortfalls. Current line item overdrafts which may need a budget transfer are (1) $1,600 in costs for an outside attorney for the Master Plan, (2)$6,600 current over budget of Fire overtime, (3) $6,777 over budget for contract labor for hydrant testing Fire department, (4) $1,850 unanticipated retirement in Street Department ( a similar amount in fund 2500 Special Street Maintenance). Some of these short falls may be absorbed by the department budgets, some will not. An additional contingency is still pending regarding holiday pay and the police contract. I intend to give you an update on the fiscal position of the funds after the 15th of January. A revenue update at this time looks really bad because we have not received any tax revenue. We will receive the November tax collections December and January 15'h. We have received the first of four Entitlement checks for $435,691. It includes the 3% cola which we did not include in the original budget. We have not received either of our State Personal Property Reimbursements. Our liquor licenses are received in June. We did receive about $30,000 from the State for liquor and beer apportionment and $15,000 in County Motor vehicle revenue in July. This will be the last time we receive those revenues (replaced by the entitlement). We did not anticipate those funds for this year. Court fines are at 33% at the end of October. Recreation revenues are seasonal. In total, the revenue budget shows we are at 21 %, normal would be 33%, however, timing of the taxes and reimbursements makes any comparison difficult. Other impacts to our revenue include declining interest rates, currently 3.5%. A year ago the rate was 6.7%. RESOLUTION NO. 4671 A RESOLUTION CALLING FOR A PUBLIC HEARING TO AMEND THE ANNUAL APPROPRIATIONS OF THE CITY OF KALISPELL, MONTANA, AS SET FORTH IN THE 2001-2002 BUDGET ADOPTED BY THE CITY COUNCIL. WHEREAS, in the budget adopted by the City of Kalispell for the 2001-2002 fiscal year, certain detailed and itemized estimates of expenditures have proven inaccurate in the operation of said Funds for the 2001-2002 fiscal year. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: Section I. On the 3rd day of December, 2001 at 7:00 o'clock P.M., in the Council Chambers, City Hall, 312 1st Avenue East, Kalispell, Montana, the City Council of the City of Kalispell shall hold Public Hearings on the following amendments to the 2001-2002 fiscal budget: 1. Increasing the appropriations and expenditures for the loans to City Employees impacted by the change to a biweekly payroll. Salaried Employees will receive a loan equivalent to 88 hours of pay to be repaid when the employee retires or sooner if they choose. Amount $49,169 for line item 1000-400-410830-790. 2. Increasing the appropriations and expenditures for the City Attorney Budget. Salary line item 110 increase of $30,000 to fund the interim attorney and five months of the new attorney. An increase of $20,600 for line item 112 for severance pay for the City Attorney -accrued vacation and sick leave. 3. Increasing the appropriations and expenditures for the Retirement Fund line item for the City Attorney office for $3,226 to pay for the City contribution for PERS on the attorney's severance package and the additional retirement for 5 months of a new attorney. 4. Increasing the appropriations and expenditures for the Health Insurance Fund in the amount of $2,320 for an additional 5 months of expenditures for a new attorney. 5. Increasing the appropriations and expenditures for the Fire Department budget for equipment, line item 940, by $6,500. Increase to pay for the Port -a -Count fit test unit which the County intended to pay for and donate in lieu of reimbursing the City for personnel expenditures. Our auditors prefer this accounting and the County will reimburse the City for hazardous materials response. 6. Increasing the appropriations and expenditures for debt service for Fund 3643, SID 343 Sunnyview Lane, in the amount of $3,500 for interest expense underbudgeted in the 2002 budget. Line item 620. 7. Increasing the appropriations and expenditures for the Water Fund in the amount of $140,000 for costs associated with the replacement of the water lines at Main and Idaho. MDOT has not yet closed out the project. We failed to carry over this budget from last year. Primarily funded through an SRF Loan. 5210-447-430552- 950. 8. Increasing the appropriations and expenditures for the newly created Pool Capital Project Fund in the amount of $3.7 million as approved by the voters. Amending line item 4190-437-460445-950, Construction in Progress, and the revenue account for proceeds of bonds. SECTION II. That notice of the passage of this resolution shall be published pursuant to Section 7-1- 4127, MCA. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 19TH DAY OF NOVEMBER, 2001. Wm. E. Boharski Mayor ►04003*6 Theresa White City Clerk