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CMR:365:05 Page 1 of 2
TO: HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE: SEPTEMBER 20, 2005 CMR: 365:05
SUBJECT: REQUEST TO PRELIMINARILY APPROVE 2004-05
REAPPROPRIATIONS REQUESTS
RECOMMENDATION
Staff recommends that the Finance Committee preliminarily approve the 2004-05
reappropriations (Attachment 1).
BACKGROUND
As a part of the typical year-end process, department staff work with the Administrative Services
Department (ASD) to review outstanding financial obligations as of year-end. In the course of
regular operations, these items span two fiscal years in the processing—planning in one fiscal
year and actual payment in the next. This necessitates carrying forward both encumbered and
budgeted amounts. Council approves these carry-forward items in the year-end closing ordinance
once the accounting books are closed. Staff utilizes the reappropriation process if base funding in
the following fiscal year cannot accommodate the expense.
In 1995, the Fiscal Procedures Chapter of the Municipal Code (Chapter 2.28) was amended to
implement mission driven budgeting and the 2-year budget process (CMR:212:95;
CMR:155:95). Section 2.28.090 governing reappropriations was amended to allow Council to
preliminarily authorize reappropriations of non-capital appropriations at the beginning of the
fiscal year with final authorization to be made at the time of adoption of the budget closing
ordinance. The purpose of this was to ease difficulties experienced by the departments caused by
the late final approval of the reappropriations where the reappropriation was justified and
sufficient funds from the prior year are clearly available. Preliminary approval allows the
department to continue with normal operations and spend the funds as of the Council’s
preliminary approval date rather than the year-end ordinance approval date.
DISCUSSION
With the implementation of SAP, there is an opportunity to take advantage of system efficiencies
by allowing the system to automatically post the previous year’s reappropriations with the other
encumbered carry-forwards as of the beginning of the new fiscal year. As noted above, the
Municipal Code allows the “preliminary” approval of reappropriations, as long as final approval
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is included with the normal year-end closing ordinance. The preliminary reappropriation action
allows for an early review of uncommitted funds in a just-concluded fiscal year for possible
carry-forward into the next. Attachment 1 identifies those reappropriation requests that ASD
recommends for preliminary approval. Final approval will be requested by Council after the
books are closed.
RESOURCE IMPACT
Staff has determined that sufficient uncommitted budgeted funds do exist to allow for the
preliminary approval of the attached 2004-05 reappropriations list (Attachment 1). General Fund
proposed reappropriations total $267,000, along with $525,000 in the Internal Service Fund, and
$94,322 within a housing Special Revenue Fund. For comparative purposes, Council approved a
similar General Fund operating amount ($444,322) in 2003-04.
POLICY IMPLICATIONS
This recommendation is consistent with adopted Council policy.
ENVIRONMENTAL REVIEW
The action recommended is not a project for the purposes of the California Environmental
Quality Act.
PREPARED BY:
MARY DIVINSKI
Senior Financial Analyst
DEPARTMENT HEAD APPROVAL:
CARL YEATS
Director, Administrative Services
CITY MANAGER APPROVAL:
EMILY HARRISON
Assistant City Manager
ATTACHMENT
Attachment 1: 2004-05 Reappropriations List