Item 3: Resolution 4922 Adopting a Supplemental Budget

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing and Action: Resolution 4922 Adopting a Supplemental Budget; Making Appropriations for the City of Eugene for the Fiscal Year Beginning July 1, 2007, and Ending June 30, 2008 Meeting Date: December 10, 2007 Agenda Item Number: 3 Department: Central Services Staff Contact: Kitty Murdoch www.eugene-or.gov Contact Telephone Number: 682-5860 ISSUE STATEMENT City Council approval of the first Supplemental Budget for FY08 is requested. Oregon Local Budget Law (ORS 294.480) allows for supplemental budgets for "an occurrence...which had not been ascertained at the time of the preparation of a budget for the current year..." Supplemental Budget #1 consists of $12.9 million in proposed changes to the FY08 Adopted Budget. A brief description of the proposed transactions is provided in Attachment A. This supplemental budget does not authorize any increased property tax levy. BACKGROUND The Supplemental Budget that occurs in December of a fiscal year is usually the largest because of audit adjustments to budgeted Beginning Working Capital and the reappropriation of funds from the prior fiscal year for program initiatives or projects begun, but not completed, in that year. Supplemental Budgets also recognize new revenue and authorize other unanticipated changes in legal appropriations. For this Supplemental Budget, the proposed changes fall into the following categories: Transactions Related to Beginning Working Capital Isler & Company, LLC, the City's external auditor, has completed its audit of FY07 transactions. Based on the audited FY07 revenues and expenditures, staff determined the FY08 Actual Beginning Working Capital for all funds. The FY08 Actual Beginning Working Capital was then reconciled with the Beginning Working Capital estimates in the FY08 Budget, and the difference between the Budgeted and Actual Beginning Working Capital is the audit adjustment being recognized on this Supplemental Budget. In most cases, that adjustment increases Beginning Working Capital; that is, in the prior year the fund received more revenue than was expected and/or expended less than was budgeted. These transactions are noted in Attachment A. In most funds the transactions increase Balance Available or Reserve, but in some cases Department Operating or Capital expenditures are affected. The Police Interoperability Grant amount of $2,786,870 has been removed from the Beginning Working Capital and the Reserve for Encumbrance. The remaining grant authority and revenues are recognized on this supplemental budget as intergovernmental revenue and additional Police appropriation since the F:\CMO\2007 Council Agendas\M071210\S0712103.doc