Item 3: PH and Action: FY10 Supplemental Budget #1

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing and Action: Resolution 4993 Adopting a Supplemental Budget; Making Appropriations for the City of Eugene for the Fiscal Year Beginning July 1, 2009, and Ending June 30, 2010 Meeting Date: December 14, 2009 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 FY10 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 $27.6 million in proposed changes to the FY10 Adopted Budget. Brief descriptions of the proposed transactions are provided in Attachment A. This supplemental budget does not authorize any increased property tax levy and has been advertised in compliance with Oregon statute. 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: Carryover from the Previous Fiscal Year Transactions Related to Beginning Working Capital Isler & Company, LLC, the City's external auditor, has completed its audit of FY09 transactions. Based on the audited FY09 revenues and expenditures, staff determined the FY10 Actual Beginning Working Capital for all funds. The FY10 Actual Beginning Working Capital was then compared with the Beginning Working Capital estimates in the FY10 Budget, and the difference between the Budgeted and Actual Beginning Working Capital is the audit adjustment (sometimes called the Marginal Beginning Working Capital adjustment or MBWC) being recognized on this Supplemental Budget. If the adjustment is an increase to Beginning Working Capital; that is, in the prior year the fund received more revenue than was expected and/or expended less than was budgeted, then the offsetting adjustment in most funds is an increase to Balance Available or Reserve, but in some cases Department Operating or Capital revenues and expenditures are affected. Likewise, if the adjustment is a decrease to the Beginning Working Capital estimate, then most usually Balance Available or Reserves are reduced. Z:\CMO\2009 Council Agendas\M091214\S0912143.doc