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Item 6DCITY OF MEMORANDUM SOUTHLAKE May 26, 2020 To: Shana Yelverton, City Manager From: Sharen Jackson, Chief Financial Officer Subject: Ordinance No. 1230, 1St Reading, Approving and adopting the revised Annual Budget for Fiscal Year 2020. Action Requested: Approval of Ordinance 1230, adopting the revised Annual Budget for Fiscal Year 2020. Background Information: The purpose of this item is to seek City Council consideration and adoption of the revised Fiscal Year 2020 annual budget. As discussed at the May 19 City Council meeting, the City's adopted budget must be revised to incorporate adjustments to revenue projections and to acknowledge changes to planned expenditures. Please note that staff continues to adjust projections as information becomes available, so it is possible that there may be changes to the budget amendment between first and second reading. Staff has examined each fund within the City budget to determine what changes need to be made. The FY 2020 budget was developed pre-COVID 19 and as a result of the economic impact there are various revenue streams that require adjustments to reduce revenue projections ($8.5 million): • Sales Tax (General, SPDC, CCPD, CEDC) • Hotel Tax • Fines (General Fund) • Charges for Services (CEDC) • Other utility charges -late fees (Utility Fund) • Interest Income (operating) As discussed on May 19th, staff took several budget stabilization measures to reduce cost and minimize the spread of COVID-19. The proposed budget adjustment includes a reduction of operating expenditures of $1.3 million and reduction of fund transfers for projects and master plan implementation. Financial Considerations: The purposed budget adjustments address the COVID-19 financial impact to revenue projections and planned projects. Strategic Link: F1: Adhere to financial management principles and budget Citizen Input/ Board Review: Public hearing scheduled for June 16th Legal Review: N/A Alternatives: Deny or direct staff to modify revised budget figures for FY 2020 Supporting Documents: Ordinance No. 1230 Fiscal Year 2020 Revised Budget (Exhibit A) Staff Recommendation: Approval of Ordinance No. 1230 ORDINANCE NO. 1230 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, REVISING THE BUDGET FIGURES FOR FISCAL YEAR 2020, BEGINNING OCTOBER 1, 2019,.AND TERMINATING SEPTEMBER 30, 2020, AND MAKING APPROPRIATIONS FOR EACH DEPARTMENT, PROJECT AND ACCOUNT; REPEALING CONFLICTING ORDINANCES; PROVIDING A SAVINGS AND SEVERABILITY CLAUSE; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City Manager has prepared a revision of certain figures in the 2020 budget which was approved by City Council with Ordinance No. 1224 on September 17, 2019 and submitted same to the City Council; and, WHEREAS, a copy of said amendment is attached hereto as Exhibit "A" and incorporated herein for all purposes; and WHEREAS, the City Council has studied the Budget Amendment and has determined that the Budget Amendment attached hereto is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: Section 1. That all of the above premises are found to be true and correct and are incorporated into the body of this Ordinance as if copied in their entirety. Section 2. That the revised figures, prepared and submitted by the City Manager for the 2020 budget, be, and the same are hereby, in all things, approved and appropriated, and any necessary transfers between accounts and departments are hereby authorized, approved, and appropriated. Section 3. That the Budget Amendment attached hereto as Exhibit "A" and incorporated herein for all purposes is adopted for the Fiscal Year beginning October 1, 2019 and ending September 30, 2020; and there is hereby appropriated from the funds indicated such projects, operations, activities, purchases and other expenditures as proposed in the Budget. Section 4. That the City Manager has determined that there are necessary revenue and expenditure adjustments to those estimated in the 2020 approved budget. Section 5. That any and all ordinances, resolutions, rules, regulations, policies or provisions in conflict with the provisions of this Ordinance are hereby repealed and rescinded to the extent of conflict herewith. Section 6. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereto any person or circumstances is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this Ordinance; and the City Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. Section 7. That the necessity of adopting and approving a proposed budget for the next fiscal year as required by the laws of the State of Texas requires that this Ordinance shall take effect immediately from and after its passage, and it is accordingly so ordained. PASSED AND APPROVED on first reading this day of , 2020. Laura Hill, Mayor ATTEST: Amy Shelley City Secretary PASSED AND APPROVED ON second reading this day of 2020. Laura Hill, Mayor Amy Shelley City Secretary City Attorney Date: Adopted: Effective: Exhibit A GENERALFUND 2020 Revised Budget 2020 Original Adopted 2020 Revised Budget $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Ad Valorem Taxes $25,285,331 $25,285,331 ($0) 0.0% Sales Tax 15,000,000 11,924,500 (3,075,500) -20.5% Franchise Taxes 2,976,885 2,976,885 0 0.0% Fines 1,209,000 920;0001 (289,000) -23.9% Charges for Services 1,193,751 1,183,751 (10,000) -0.8% Permits/Fees 1,772,400 1,272,400 0 0.0% Miscellaneous 348,000 348,000'; 0 0.0% Interest Income 400.000 230,000' 17( 0.000) -42.5% Total Revenues $48,185,367 $44,640;867 ($3,544,500) -7.4% EXPENDITURES City Secretary $527,181 $527,181 $0 0.0% Human Resources 866,157 $854;147' (12,010) -1.4% City Manager 1,034,611 1,030,346 (4,265) -0.4% Information Technology 2,858,866 2,835;874' (22,992) -0.8% Communications 486,472 477;656 (8,816) -1.8% Support Services 1.781.845 1.781,845 ! 0 0.0% General Gov. Total $7,555,132 $7,507,049 ($48,083) -0.6% Finance 1,555,758 1,527,280 (28,478) -1.8% Municipal Court 783,514 772;601 (10,913) -1.4% Teen Court 169.891 169.891 (0) 0.0% Finance Total $2,509.163 2 469J7 ($39,391) -1.6% Fire 9,582,184 9,463,7171 (118,467) -1.2% Police 7,444,294 7,301,705' (142,589) -1.9% Public Safety Support 1.424.540 1.424 540: 0 0.0% Public Safety Total $18.451.018 $18.189;962' ($261,056) -1.4% Streets/Drainage 1,537,964 1,537;964 0 0.0% Facility Maintenance 1,669,954 1,669,954 0 0.0% Public Works Admin 1.638.718 1.638,718' 0 0.0% Public Works Total $4,846.636 846636' $_0 0.0% Building Inspections 1,197,284 1,160,554 (36,730) -3.1% Planning 1.096.605 1.096,605 0 0.0% Planning and Dev Total $2,293.889 2 257 159' ($36,730) -1.6% Economic Development 154.872 154,872 + 0 0.0% Economic Dev. Total $154,872 $154,872 $_0 0.0% Community Services 1,383,507 1,362;391'1 (21,116) -1.5% Parks and Recreation 3,881,877 3,864,638 (17,239) -0.4% Library Services 811.072 793,062 1( 8.010) -2.2% Community Svcs. Total $6,076.456 6 020 091 ($56,365) -0.9% Total Expenditures $41,887,166 $41,445,541 ($441,625) -1.1% Net Revenues $Sf 29$241 $ 2'; (83.102.8751 Lease Proceeds $0 $0: $0 Transfers In 2,089,357 2,089,357' (0) Transfers Out ($8.050.000) ($5,550,000) 2.500.000 Total Other Sources (Uses) (55.960.643) ($3.460643k $� Beginning Fund Balance $10,132,202 $10,132;2021 Residual Equity Transfer $0 $0 Ending Fund Balance $10.469.760' Fund balance percentage 25.00% 23.81% GENERAL FUND Strategic Initiative Fund 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Interest 50,000 35000' 1( 5,000) -30.0% Total Revenues $50,000 $35,000 ($15,000) 0.0% EXPENDITURES Infrastructure Maintenance $0 $0 $0 0.0% Community Enhancement 175,000 175,000 0 0.0% Technology Infrastructure 0 0 0 0.0% Capital Acquisition 48,598 4U98 ' 0 0.0% Total Expenditures $223,598 $223,59$' $0 0.0% Net Revenues Transfer from other funds $5,750,000 $4,250,000 (1,500,000) Transfer to other funds (7,200,000) ' (4.450.000)' 2,750,000 ($1.450.0001 1 Total Other Sources/(Uses) Beginning Fund Balance $4,218,873 $4,218,873 Ending Fund Balance $25252M =302n GENERAL FUND Facility Maintenance 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Interest 100,000 700003( 0,000) -30O% Total Revenues $100,000 $70,000 ($30,000) 0.0% EXPENDITURES Operations $2,500 $2,500 $0 0.0% Capital 0 0 ; 0 0.0% Total Expenditures $2,500 $2,500 $0 0.0% Net Revenues $977 MUM Transfer from other funds $1,500,000 $0 (1,500,000) Transfer to other funds L$-01 LUO 0 Total Other Sources/(Uses) IL5QQM f,0 ($1.500.000) Beginning Fund Balance $6,669,356 $6,669,356 Ending Fund Balance 25S Sf, GENERAL FUND Economic Investment Fund 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Interest 30,000 'I 21,0009( ,000) -30.0% Total Revenues $30,000 $21,000 ($9,000) 0.0% EXPENDITURES Operations $0 $100,000 $100,000 999999900.0% Capital 0 ', 0 0 0.0% Total Expenditures $0 $100,000 $100,000 499999950.0% Net Revenues $aa&m ; ; Transfer from other funds $150,000 $150,000 0 Transfer to other funds L$-01 M', 0 Total Other Sources/(Uses) $1501M (111 Q Beginning Fund Balance $2,419,211 $2,419,211 Ending Fund Balance 5� ilj $2490,211 i GENERAL FUND Technology Infrastructure and Security Fund 2020 Revised Budget 2020 2020 $ Increase/ Original Revised (Decrease) % Increase/ Adopted Amended Adopted -Decrease REVENUES Miscellaneous 420,000 420,000 0 0.0% Interest 52.500 X000 1( 4,500) -27.6% Total Revenues $472,500 $458,000 ($14,500) 0.0% EXPENDITURES Cutomer Enhancements 21,338 21,338: 0 0.0% Information Security 0 0 0 0.0% Business Contunity 441,500 441,500 0 0.0% Security Equipment and Infrastructure 712,000 232,000' (480,000) -67.4% Technology Infrastructure 1.290,305 490 30580( 0,000) -62.0% Total Expenditures $2,465,143 $1,185,143 ($1,280,000) -51.9% Net Revenues ($1.992.6431 97?f 7.13)' Transfer from other funds $3,500,000 $2,250,000 ` (1,250,000) Transfer to other funds 0 f G Total Other Sources/(Uses) 41.250.000) Beginning Fund Balance $3,080,873 $3,080,873 Ending Fund Balance4__�t4p i0' SPECIAL REVENUE FUND Hotel Occupancy 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Taxes $1,385,283 $671,862 ($713,421) -51.5% Interest 20,000 14.4005( 600) -28.0% Total Revenues $1,405,283 $686,262 ($719,021) -51.2% EXPENDITURES Personnel $201,185 $201,185 $0 0.0% Operations 627,189 567,189 (60,000) -M% Capital 0 0 0 0.0% Total Expenditures $828,374 $768,374 ($60,000) -7.2% Net Revenues $ ($659.0211 Transfer to other funds ($467,004) ($56 212 410,792 Total Other Sources/(Uses) ($467,004) Beginning Fund Balance $1,614,250 $1,614,250 Ending Fund Balance V.4MM UTILITY FUND 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Miscellaneous $124,500 $124,500 $0 0.0% Interest Income 228,000 163,000 (65,000) -28.5% Water Sales -residential 15,573,702 15,573,702 0 0.0% Water Sales -commercial 4,392,583 4,392,583 0 0.0% Sewer Sales 7,900,000 7,900,000 0 0.0% Sanitation Sales 1,970,000 1,970,000 0 0.0% Other utility charges 456,800 311,800 14( 5,000) -31.7% Total Revenues $30,645,585 $30,435,585 ($210,000) -0.7% EXPENSES Debt Service 4,307,673 4,307,673 0 0.0% Utility Billing 607,701 607,701 0 0.0% Water 13,605,710 13,568,490' (37,220) -0.3% Wastewater 6,325,592 6,301,959' (23,633) -0.4% Sanitation 1,674,996 1,674,996 0 0.0% Total Expenses $26,521,672 $26,460,819 ($60,853) -0.2% Net Revenues�6& i i9z1 Transfers In $0 $0 Transfers Out (1,225,823) (1.225,823) Total Other Sources (Uses) ($1.225.8231 ($1.225.8231 Beginning working capital $8,061,535 $8,061,535' Ending fund balance X10.959.625 $10.810.478 No. of days working capital 151 149 TIF OPERATING FUND 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Ad Valorem $9,387,095 $9,387,095 ($0) 0.0% Interest Income $9,000 $9,000: $00 0.0% Total Revenues $9,396,095 $9,396,095 ($0) 0.0% EXPENDITURES Personnel $274,320 $274,320 $0 0.0% Operations $7,161,584 $7,641,584 480,000 6.7% Capital $55,000 $55,000 0 0.0% Total Expenditures $7,490,904 $7,970,904: $480,000 6.4% Net Revenues $1,905 191 1 43519 480 001 Transfers Out -General Fund 0 0 Transfers Out -Debt Service 0 0 Total Other Sources (Uses) $_Q $Q I Beginning Fund Balance $2,687,079 $2,687,079' Prior period adjustment Ending Fund Balance 4 2 270 4 112 2 CRIME CONTROL DISTRICT FUND 2020 Revised Budget 2020 2020 $ Increase/ Original Revised (Decrease) % Increase/ Adopted Amended I Adopted -Decrease REVENUES Sales Tax $1,881,000 $1,408,601'- ($472,399) -25.1% Miscellaneous Income $0 $0; $0 0.0% Interest Income $95,000 $%500 ($28,500) -30.0% Total Revenues $1,976,000 $1,475,101', ($500,899) -25.3% EXPENDITURES Personnel $1,161,249 $1,161,249 $0 0.0% Operations $232,503 $232,5031 0 0.0% Capital $510,419 $510,419 0 0.0% Total Expenditures $1,904,171 $1,904,171 $0 0,0% Net RevenuesZ_1..829+ 0 Transfers In -SPDC $0 $0 Transfer out -Crime Control CIP ($400,000) ($400,000) 0 Transfers Out -General Fund7( 9 040)7( 9.040) 0 X479.0 601Q Total Other Sources (Uses) ($479.0401 Beginning Fund Balance $4,209,042 $4,029,621'; Ending Fund Balance $3,801,_$31 SPDC - OPERATING FUND Parks/Recreation 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Sales Tax $7,650,000 $5,788,859 ($1,861,141) -24.3% Rental Income 153,824 153,824 0 0.0% Interest 145,000 145.000 0 0.0% Total Revenues $7,948,824 1 $6,087,683 i ($1,861,141) -23.4% EXPENDITURES Personnel $230,184 $230,184 $0 0.0% Operations $1,273,980 $1,273,980 0 0.0% Capital $67,200 $67,200 0 0.0% Total Expenditures $1,571,364 $1,571,364 $0 0.0% Net Revenues 77 4 4 51 ` 1 ($1.861.1411 Transfers Out (7,136,222) (7,136,222) $0 Proceeds from C.O. Sale 0 0 Total Other Sources (Uses) ($7.136.222) t$7.136.222i' Beginning Fund Balance $9,517,283 $9,5'i17,283 Ending Fund Balance 8 758 521 : $6,897 380 CEDC - OPERATING FUND Parks/Recreation 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Sales Tax $5,650,340 $4,263,741 ($1,386,599) -24.5% Charges for Services 2,524,105 2,358,337 (165,768) -6.6% Interest 140,000 98,000 (42,000) -30.0% Total Revenues $8,314,445 $6,720,078 ($1,594,367) -19.2% EXPENDITURES Personnel $2,447,207 $2,408,407 ($38,800) -1.6% Operations $1,856,463 $1,856,463 0 0.0% Capital $00 $0 0 0.0% Total Expenditures $4,303,670 $4,264,870 ($38,800) -0.9% Net Revenues $4,010,7752 4 24$ ($1.555.567) Transfers Out (332,578) (332,578) $0 Transfer out -Replacement Fund (160,000) (160,000) $0 Transfer Debt Service (2,429,906) (2,429,906) $0 Total Other Sources (Uses) ($2.922.484) l$2922.484Y' 00 Beginning Fund Balance $6,816,942 $6,816,942' Ending Fund Balance $7,905,233349 ' Public Art 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Miscellaneous $0 $0 ; $0 0.0% Interest Income $8,500 $6375 ($2,125) -25.0% Total Revenues $8,500 $6,375 ($2,125) EXPENDITURES Operations $69,000 $69,000 $0 0.0% Capital L $_0 0 0.0% Total Expenditures $69,000 $69,000 $0 0.0% Net Revenues Oif� Cf t2.St25 Oi< Transfers In -Hotel 210,792 0 i (210,792) Transfers Out -(100,000) 100 000 > 0 Total Other Sources (Uses) i $0 Beginning Fund Balance $531,766 $531,766 0 Oi Ending Fund Balance �I VEHICLE REPLACEMENT 2020 Revised Budget 2020 Original Adopted 2020 Revised Amended $ Increase/ (Decrease) Adopted % Increase/ -Decrease REVENUES Miscellaneous $75,000 $75,000: $0 0.0% Interest Income $90,500 S90,500 $00 0.0% Total Revenues $165,500 $165,500 $0 EXPENDITURES Capital3 291 000 $3,291,000 0 0.0% Total Expenditures $3,291,000 $3,291,000" $0 0.0% Net Revenues ($3.125.5001 1$3.125.5001 $00 Transfers In -General Fund 2,000,000 1,000,000 (1,000,000) Transfers Out -Debt Service 0 0 0 Total Other Sources (Uses) =Qami}1 QQQ SQ Beginning Fund Balance $6,783,206 $6,783,206 Ending Fund Balance $5657- w 7