Item 3: Adoption of Resolution 5019 Adopting a Supplemental Budget

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing and Possible Action: Adoption of Resolution 5019 Adopting a Supplemental Budget; Making Appropriations for the City of Eugene for the Fiscal Year Beginning July 1, 2010, and Ending June 30, 2011 Meeting Date: December 13, 2010 Agenda Item Number: 3 Department: Central Services Staff Contact: Mia Cariaga www.eugene-or.gov Contact Telephone Number: 541-682-5408 ISSUE STATEMENT The council approval of the first Supplemental Budget (SB1) for FY11 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..." This Supplemental Budget (SB) 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. Transactions Related to Beginning Working Capital Isler & Company, LLC, the City's external auditor, has completed its FY10 audit and this Supplemental Budget reflects Marginal Beginning Working Capital (MBWC) information. The MBWC is the difference between the estimated and audited actual FY10 revenues and expenditures. This adjustment is recognized on SB1 and is the largest component of the transactions included in the budget request . General Fund Main Sub-Fund Update The council received an update on the General Fund financial status recently. The City Manager’s recommendations for use of MBWC in the General Fund take into consideration an anticipated deficit in the General Fund due to revenue shortfalls particularly in the area of property taxes. An updated six year General Fund forecast will be presented at a Budget Committee meeting in early 2011. General Fund Main Sub-Fund Transactions on SB1 After taking into account the reconciliation of the prior year encumbrance reserve, there is $6,205,732 available to be appropriated or put into reserves in the General Fund on SB1. From that amount, the City Manager is recommending $578,411 be reappropriated for FY11. The City Manager is recommending that the remaining $4,327,321 be placed into reserves; $1 million to be placed into a reserve for property tax appeals and $3,327,321 to be placed in the Reserve for Revenue Z:\CMO\2010 Council Agendas\M101213\S1012133.doc