HomeMy WebLinkAbout8.2 Budget Modification 2005-2006
CITY CLERK
File # DcaJ[3]~-[Z]~
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 13, 2006
SUBJECT
2005-2006 Budget Modification with Regard to ArtIcle XTTl B ofthc
State Conshtuhon
Prepared hv Fred Marsh, Finance Manager and Lisa Hisatomi,
4dminislralive Analvst II
ATTACHMENTS
Nonc
RECOMMENDATION
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A.uthoTIze as appropriations to Reserves any revcnucs in excess of
budgeted expenditures as of Junc 30, 2006, as outlined below
FINANCIAL STATEMENT
This action will provide appropriations to Reserves m the amount of
any revenues receIved that are in cxcess of expemhtures_ This action
will not change the amounts authorized for expenditure. Actual
amounts appropriated to Reserves in each Fund will be ident1 fied
after the books are closed and all accruals recorded.
DESCRIPTION This action requests authorization to "appropnate" all revenucs received in the
current hscal Year 2005-2000 that are in excess of expenditures_ The actual amounts involved will be
detenlllned following the close of Fiscal Year 2005-200(\
Each year the City Council takes this action to protect the ability to utilize these reserves 111 future years,
WIthout the risk of exceeding the State mandated Appropriations Limit. The State Constitution establishes
a limit on the amount of annual appropriations that can legally be made from "Proceeds of Taxes."
Although the City is currently well below the maxImum Appropriations LimIt, thIS action will protect
filture expenditures from Reserves.
Under State Law eertam funds can he excluded from the ealculatHln of the total "appropriations" which
wlll he suhJect to the Limit. The law specifically excludes funds that have been "appropriated" to
Reserves in a prior fiscal year When the Reserve Funds arc eventually used, they arc not subject to the
Appropriations LImit 111 the year ulihzed, since they were prevlOusly "appropriated" under the Limit
authoTIzed in a prior ycar In other words, if the City Council appropriated $500,000 to Reserves in Fiscal
Year 2005-2006 and the funds were used on a capital project in Fiscal Year 2006-2007, this expendIture
would not be subject to the Limit.
As part of the development of the Fiscal Year 2006-2007 Prehmmary Budget, Staff has rev1sed the
revenue and expenditure estimatcs for Fiscal Year 2005-2000. Those rcvised estImates project that the
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COPIES TO;
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ITEM NO.
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City's 2005-2006 year-end surplus to be approximately $3.8 million. Excluding the cany-over of
$822,744 in CapItal hnproveffient ProJects the rcmaining General Fund surplus is projected at $2,812,064
Stall recommends that the City Council authonze the appropriation of all excess revenues to Rcserves in
eonfonnallce with tl1lS report.
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