HomeMy WebLinkAboutItem 4.03 Budget Mod 07-08
CITY CLERK
File # D[2][2JLQJ-~~
SUBJECT:
2007-2008 Budget Modification with Regard to Article XIII B of the
State Constitution
Prepared by: Paul S. Rankin, Administrative Services Director
ATTACHMENTS: ~ne
RECOMMENDATION: Authorize as appropriations to Reserves any revenues in excess of
~ budgeted expenditures as of June 30, 2008, as outlined below.
FINANCIAL STATEMENT: This action will provide appropriations to Reserves in the amount of
any revenues received that are in excess of expenditures. This action
will not change the amounts authorized for expenditure. Actual
amounts appropriated to Reserves in each Fund will be identified
after the books are closed and all accruals recorded.
DESCRIPTION: This action requests authorization to "appropriate" all revenues received in the
current Fiscal Year 2007-2008 that are in excess of expenditures. The actual amounts involved will be
determined following the close of the Fiscal Year 2007-2008 financial records.
Each year the City Council takes this action to protect the ability to utilize these reserves in future years,
without the need to determine whether the expenditure of reserves are subject to 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."
Under State Law certain funds can be excluded from the calculation of the total "appropriations" which
will be subject to the Limit. The law specifically excludes funds that have been "appropriated" to
Reserves in a prior fiscal year.
When the Reserve Funds are eventually used, they are not subject to the Appropriations Limit in the year
utilized, since they were previously "appropriated" under the Limit authorized in a prior year. In other
words, if the City Council appropriated $500,000 to Reserves in Fiscal Year 2006-2007 and the funds
were used on a capital project in Fiscal Year 2007-2008, the expenditure of those funds would not be
subject to the Limit.
As part of the development of the Fiscal Year 2008-2009 Preliminary Budget, Staff has revised the
revenue and expenditure estimates for Fiscal Year 2007-2008. Those revised estimates project that the
City's 2007-2008 year-end surplus will be approximately $3.4 million.
Staff recommends that the City Council authorize the appropriation of all excess revenues to Reserves in
conformance with this report.
H: \Budget\Agenda Statements\2008 _Action _ Approp _ Rsve _ Agenda.DOC
ITEM NO.
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