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Item 8CLlty 01 NOUMaKe, A exas MEMORANDUM TO: Shana Yelverton, City Manager FROM: Sharen Elam., Director of Finance SUBJECT: Ordinance No. 889 -A, 1 St Reading, Amending Ordinance No. 889 amending Fiscal Year 2005 -06 Annual Budget. Action Requested: City Council consideration of Ordinance No„ 889 -A to amend the FY 2005 -06 Annual Budget Background Information: Ordinance No. 889 -A is presented to the Council to reflect the proposed changes to the Adopted FY 2005 -06 Annual Budget. The amendments to the General Fund budget reflect an increase of $940,000 to revenue, $507,024 in expenditures, Revenue had the following amendments: • Sales tax revenue reflects a proposed increase of $750,000 due to the significant increase in sales tax collections for the first six months of the fiscal year. • Fines reflect a proposed increase of $190,000 due to multiple reasons, First, the increase in citations and warrants cleared for the first half of the fiscal year and second, due to the change in posting cash bonds (timing issue). Total proposed increase in revenue for fiscal year 2005 -06 is $940,000. Expenditures had the following amendments: • Support Services department request reflect a proposed increase of $205,448. $32,448 is required for the construction and maintenance of the wireless pilot program implemented this fiscal year. The remaining $173,000 is requested for the first phase of implementation of the IT Study currently underway. There are key areas that are deemed necessary to immediately begin addressing this fiscal year: o Integrated Foundational Systems: The consulting team that we hired to conduct the IT Alignment Study is nearing the completion of a draft report of their recommendations. Based on the IT Alignment Steering Committee weekly meetings with the consulting team and their preliminary recommendations, it is March 29, 2006 very evident that they will recommend some wide ranging recommendations to improve process effectiveness and efficiency through the use of new technology solutions to support key City functional areas (e.g., finance, accounting, fixed assets, utility billing, human resources, fleet management, etc,), that are missing key functionality, make reporting difficult if not impossible and are driven by manual business processes, In order to get a head start on defining the organization's requirements, identifying and evaluating vendors, evaluating various software solutions and selecting the appropriate software to meet the city's needs, the IT Alignment Steering Committee is recommending that we make a $98,000 mid -year amendment to the General Fund to begin that process. o It is also the IT Alignment Steering Committee recommendation that the City retain the necessary technical expertise to assist the City in process development and solution selection by assisting in defining the City's process requirements, identifying and evaluating various software vendors and products, writing the RFP and assisting with final selection of the most appropriate software solutions for a number of our work processes including; financial management, accounting, fixed assets, utility billing, human resources and fleet management. Additional technical expertise is needed because it is likely that the appropriate software solution is will be, not one enterprise wide solution, but a number of "best of breed" software products that can be interfaced with one another. o The City does not currently have on staff the expertise to perform this solution selection function, nor does the IT staff have sufficient time to do all of the required tasks, The City of Frisco recently went through a software selection process very similar to this one that took 14 months. The City of Southlake cannot wait that long for a solution to our technology needs in the areas identified because of the enormous loss in efficiency and productivity currently being experienced due to the lack of functional or non - existent systems. a Immediate Process Improvements: There are two additional projects that are process specific that the IT Alignment Steering Committee suggests funding solution selection and implementation with a mid -year budget amendment. The first project would include the development of a new process for the Development Review Committee, The amount of development that is currently occurring in the City is beginning to overwhelm our current resources. F'oIlowing the decline of development in the Iate 1990's the staff of the Planning Department and other positions associated with the development process were March 29, 2006 reduced. Now that development activity is increasing, we believe that the additional work load can be handled by implementing a technological solution. It is estimated that the amount of time involved in the Development Review Process can be reduced by as much as 15% saving the City $10,187 annually. The other area where substantial time savings can be made with the implementation of a technological solution is in the on -line purchase order processing. Currently, the purchase order process is an entirely manual process costing time and funds that could be spent far more productively. It is estimated that with the appropriate technological solution, whether with existing software or new software would result in $43,873 saving and allow those resources to be applied to higher priority issues. The total mid -year budget adjustment for these two projects would be $75,000. Finance Department request reflect a proposed increase of $22,576 to outsource the payroll processing. The current process is extremely inefficient where there is triple entry of the same data between individual departments and finance. This was also an area of high importance from the IT Study. Public Safety Support request reflect a proposed increase of $39,000, $29,000 of the request is to address the need for a promotional process within the Department of Public Safety. The department currently has $11,000 budgeted for this process and needs an additional $29,000 to hire an outside firm to create and conduct the promotional process~ The remaining the $10,000 is requested to match the Pre - Disaster Mitigation Grant funds from the Federal Emergency Management Agency. The city was notified on September 26, 2005 that we were awarded $30,000 in federal funds, which is 75% cost of the total project cost of'$40,000 leaving 25% or $10,000 from local funds. Streets /drainage department request reflect a proposed increase of $220,000 for underground utilities at the Shops of Southlake site. Early this year, Council directed staff to proceed with the project. This is the formal process to fund the project previously discussed. • Economic Development department request reflect a proposed increase of $20,000 for city branding. Leadership Southlake presented the city branding concept at the March 21, 2006 City Council meeting. Based on the reaction from the presentation, staff wanted to earmark funds to begin the process if City Council chooses to proceed with the concept. Currently, we have $6,000 in the budget for the redesign of the city's logo and if the amendment is approved this will bring the total budget to begin the process to $26,000, March 29, 2006 Total proposed increase in expenditures for fiscal year 2005 -06 is $507,024. Fund integrity will be maintained, as the proposed amendments reflect the general fund balance at 32.65% ($7,993,528). This is above the adopted Fund Balance Policy, which states minimum balance of 15% and an optimum balance of 25 %. During the upcoming budget process for FY 2006 -07 staff will recommend a transfer to the Strategic Initiative Fund from the General Fund of any excess balance over 25 %. The amendments to the Utility Fund budget reflect an increase of $500,000 to revenue, $223,813 in expenditures, Revenue had the following amendments: • Water sales - residential and Water sales - commercial reflects a proposed increase of $300,000 and $200,000, respectively due to the drought we experienced over the last several months. Total proposed increase in revenue for the fiscal year 2005 -06 is $500,000 Expenses had the following amendments: • Water department proposed an increase of $223,813 to purchase additional transponders for the auto read system. The City uses an electronic water meter reading system and has been in the process of changing the platform, We have reached a point in the process where the first generation transponders (early 1990's) are failing at an extremely high rate which makes the process of reading meters very labor intensive with large numbers of meters having to be read manually, Staff has analyzed the cost of replacing the old meter transponders over various periods of time and determined that a twenty -four month replacement program is in the City's best interest. The total cost of the program is $859,303, To continue with replacement program the cost is $223,813 which will purchase about 1,600 transponders ranging from $116 to $4,460 each. Failure to continue with the program will increase the time required to read the meters and potentially negatively impact the revenue for the utility fund. Fund integrity will be maintained, as the proposed amendments reflect the utility fund ending the fiscal year with 70 days of working capital which is within the city's goal of 65 days. The amendments to the Park Dedication Fund budget reflect an increase of $62,500 in expenditures. Expenditures had the following amendments: March 29, 2006 On March 21, 2006, City Council approved the amendment to Schriekei, Rollins, and Associates, Inc. contract for to include the conceptual planning and schematic design for Bicentennial Park (east) for an amount not to exceed $62,500, This is the formal process to fund the amendment. Fund integrity will be maintained, as the proposed amendment reflects the fund to end the fiscal year with $105,935 in fund balance. The amendments to the Vehicle Replacement Fund budget reflect an increase of $26,100 in expenditures, Expenditures had the following amendments: Public works management study included a recommendation to hire a Fleet Coordinator. The position will assists in managing, planning and coordinating fleet maintenance for the City. The position would be funded by the vehicle replacement fund which would require a budget amendment of $26,100 for salary and benefits for half the year. The position would have an estimated annual impact of $55,000 for fiscal year 200607 to the vehicle replacement fund. Fund integrity will be maintained, as the proposed amendment reflects the fund to end the fiscal year with $2,312,775 in fund balance. The amendments to the SPDC- Capital improvement Budget reflect an increase of $103,625 in expenditures. Expenditures had the following amendments: $37,825 requested to address asbestos abatement for Bob .Tones Nature Center building. Park and Board approved this item on February 16, 2006 and SPDC approved this item on March 21, 2006. The remaining balance of the request of $65,800 is the funding for the design, engineering and construction of the Loop Road parking lot to Bob Tones Park. On February 21, 2006, City Council approved an amendment to Dunkin, Sims, Stoffels, Inc. to include the design and engineering of the Loop Road parking lot improvements at Bob Tones Park for an amount not to exceed $5,800. The construction of the Loop Road parking lot resulted in an increase of $60,000 to the project cost. Financial March 29, 2006 Considerations: Outlined above Citizen Input/ Board Review: None required Legal Review: None required Alternatives: Approve, deny or modify Supporting Documents: Ordinance No. 889 -A Amended Budget (Attachment A) Staff Recommendation: Approve Ordinance No. 889 -A ORDINANCE NO. 889-A AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, REVISING THE BUDGET FIGURES FOR FISCAL YEAR 2005 -06 BEGINNING OCTOBER 1, 2005, AND TERMINATING SEPTEMBER 30, 2006, 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 2005 -06 budget which was approved by City Council with Ordinance No. 889 on September 20, 2005, 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 2005 -06 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, 2005, and ending September 30, 2006; 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 revenues available for appropriation in excess of those estimated in the 2005 -06 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. 2006. PASSED AND APPROVED on first reading this day of , Andy Wambsganss, Mayor ATTEST: Lori Farwell, City Secretary 2006. PASSED AND APPROVED ON second reading this day of Andy Warnbsganss, Mayor ATTEST: Lori Farwell, City Secretary APPROVED AS TO FORM: City Attorney Date: Adopted: Effective: GENERA. FUND 2005 -06 Budget Amendment Attachment A ADOPTED AMENDED Budget Budget Increase/ REVENUES FY 2005 -06 FY 2005 -06 (Decrease Ad Valorem Taxes $12,131,944 $12,131,944 - Sales Tax 6,707,650 7,457,650 750,000 Franchise Fees 2,093,641 2,093,641 - Fines 710,000 900,000 190,000 Charges for Services 616,300 616,300 - Permits/Fees 1,274,660 1,274,660 - Miscellaneous 405,482 405,482 Interest Income 175.000 175.000 Total Revenues $24,114,677 $25,054,677 940,000 EXPENDITURES City Secretary $324,334 $324,334 - Human Resources 363,365 363,365 - City Manager 594,050 594,050 - Support Services 3.227.807 3.433.255 205.448 General Government Total 4,509,556 4,715,004 205.448 Finance 864,607 887,183 22,576 Municipal Court 477,319 477,319 Municipal Court -Teen Court 75.268 75.268 Finance Total 1,417,194 1,439,770 22.576 Fire 3,405,240 3,405,240 - Police 5,189,349 5,189,349 - Public Safety Support 1,481,083 1,520,083 39,000 Building 863.750 863.750 Public Safety Total 10,939,422 10,978,422 39.000 Streets/Drainage 1,665,072 1,885,072 220,000 Public Works Administration 883.240 883.240 - Public Works Total 2,5 2,768,312 220.000 Planning 656383 656.383 - Planning Total 656,383 656,383 - Economic Development 336.399 356.399 20.000 Economic Development Total 33_ 6 399 356,399 20.000 Community Services 465,100 465,100 - Parks and Recreation 2,665,134 2,665,134 Library Services 435.292 435.292 Community Services Total 3,565,526 3,565,526 Total Expenditures 523,972,792 $24,479 _ , 507.024 Excess (deficiency) of Revenue over Expenditures $141.885 $574.861 432,976 OTHER FINANCING SOURCES AND .USES/ Proceeds from lease /CO (net) $0 $0 - Transfer In- Other Funds 0 0 - Transfer To -Other Funds (3.160.000) 3.160.000 - Total Other Sources /(Uses) ($3,160,000) ($3,160,000) - Excess (deficiency) of Revenues /other sources over Exp. ($3.018.115) ($2.585.139) FUND BALANCE OCT 1 $9,186,774 $10,578,667 Change in reserved fund balance $0 $0 ENDING FUND BALANCE $6.168.659 $7.993.528 fund balance percentage 25.73% 32.65% UTILITY FUND 2005 -06 Budget .Amendment Attachment A ADOPTED AMENDED Budget Budget Increase/ REVENUES FY 2005 -06 FY 2005 -06 fDecreasel Water Sales - residential $8,300,000 $8,600,000 300,000 Water Sales - commercial 2,600,000 2,800,000 200,000 Sewer Sales 3,500,000 3,500,000 - Sanitation Sales 940,000 940,000 - Other utility charges 273,000 273,000 - Miscellaneous 75,000 75,000 - Interest Income 65.000 65.000 - Total Revenues 515,753,000 $16,253,000 500,000 EXPENSES Water $7,689,367 $7,913,180 223,813 Utility Billing 285,640 285,640 - Sewer 1,444,966 1,444,966 - Sanitation 705,000 705,000 - Debt Service 5 ,958.268 5958168 - Total Expenses $16,083,241 $16,307,054 223,813 Excess (deficiency) of Revenue over Expenses ( 5330.241 1 (154_054 276,187 OTHER FINANCING SOURCES AND (U SES Transfer In -Other Funds 50 $0 Developer Contributions $50,000 $50,000 Transfer Out -Other Funds 0 0 Total Other Sources /(Uses) $50,000 $50,000 Excess (deficiency) of Revenues and other sources over Expenses ($280.241 ($4.054 PARK DEDICATION FUND 2005 -06 Budget Amendment Attachment A ADOPTED AMENDED Budget Budget Increase/ REVENUES FY 2005 -06 FY 2005 -06 Decrease Permits/Fees $ 60,000 $ 60,000 $ - Miscellaneous - - Interest 6.600 6,600 - Total Revenues $ 66,600 $ 66,600 $ - EXPENDITURES Parks and Recreation $ - $ - $ - Park Improvements 505,000 567,500 62,500 Land - - Total Expenditures $ 505,000 $ 567,500 $ 62,500 Net Revenues $ (438,400) $ 500,900 $ 62,500 Bond proceeds - - - Transfer to other funds - - Total Other Sources /(Uses) $ - $ - $ - Beginning Fund Balance $ 545,252 $ 606,838 61,586 Ending Fund Balance S 106.852 $ 105.938 $ LI4) VEHICLE REPLACEMENT FUND 2005 -06 Budget Amendment Attachment A ADOPTED AMENDED Budget Budget Increase/ REVENUES FY 2005 -06 FY 2005 -06 Decrease Miscellaneous $ 48,000 $ 48,000 $ - Interest Income 25,000 25,000 - Total Revenues $ 73,000 $ 73,000 $ - EXPENDITURES Personnel $ - $ 26, 100 $ 26,100 Capital 282,500 282,500 - Total Expenditures $ 282,500 $ 308,600 $ 26,100 Net Revenues (209,500) (235,600) (26,100.00) Transfers In- General Fund - - - Transfers Out -Debt Service - - Total Other Sources (Uses) - Beginning Fund Balance $ 2,548,375 $ 2,548,375 $ - Ending Fund Balance $ 2,338,875 $ 2,312,775 $ (26 Bob Jeha.Pmk Oavdopmont :. Estimated Acluaf as f P7olecicc.l = 7Ymwos 6admate W Complela Total :. , :'. Pnoposod budoft Adopted !Adapted Adapted Adopted - 5 10,094 $ 10,000 Spe_al PtoJam02-C3 FY300SW0 - FY 2000!07 FY 2007100 FY 2oi;J;i FY 2604110 carry Fonxard BU!anca '. 5 1- 128.682 10,422: 5 $ 1.128.882 .14,642? 5 240.057 S 165.057 5 18.057 5 (55.943) Imereat eaminpn S 1.200 5 300 s 1500 ':s 75,000 S 25.000 S SO.= s 25.000 5 50,000 Opt, Pund Trnnerer $ 8DO.000 S 793.655 S 8,344 5 800,600 Namre Cantor imprcvomants 's :i3(I,a6Q :: s Gram Prooeetle :: 5 5 ,• S - ` -5 S 110.679 s - i]eOauPRNASalohla0 �'- S - S 117.500 S 117500 'b 200,1300. : S 700.000 5 200.000 S 100.000 S 200.000 Bomd Noceadn 5 - 5 �_ � S - X4,500;000 S 5 UCO.O,BQ 8 ",500.000 T,,.el Praceeda 5 53700 S 117.800 5 171.500 :5 4,775,000 S 125,000 5 2.750.000 5 125,000 5 2750,000 Totd Ava3ebla Punch '; 5 1- 102.562 $ 117,500 5 1300.382 '.iS 4,769,842:: S 365.057 S 2- 915.057 S 144.057 S 2084.057 Bob Jeha.Pmk Oavdopmont 5` <:_'! : =30,SM 5 S 181.000 $30,908 S 30905 Nalora Canlarlmpewamerm S 10 - 5 - 5 10,094 $ 10,000 Spe_al PtoJam02-C3 s ' s - 5 9,564 S 9,584 Sbvdel Pmj.c3 c3-04 S 10,422: 5 - S .16,422 5 Oop Palk 53li,aa0;'. s - s 30,060 s 30.000 me - hn,p Pond. 20D. 000 5 - S 235,060 5 235,000 park PMp.nyporohnaa.Evans $ 8DO.000 S 793.655 S 8,344 5 800,600 Namre Cantor imprcvomants 's :i3(I,a6Q :: s - s 86.606 5 66.606 S 116070_ S 110.679 pr.p ... MldCNap Funda It) 5 1,800,000 -.: RoYnland AANk5rMn Perk CevetapmanI 91 &oAJopen Palk Oevolapmem(PadJnp ln77 t3) liberty Pnrkat Shehonwoed {4V 'S 476,000:: Land Adulation p1 5: ::2,500,909 Lezrukan Fnu7y 1 S.': i x;412.000 TW lmp,mmeata (N. of FM 1700) S 11'1;180,' BlcentnnnEal woof Fphmd llalda and roods ;Iii S' - :- .I 33D,000;': f0rkwacdl5.Ixr. Unaer Pan; 101 5 :81.906' Coker HAWBike TIae ;7d) $ Aahacmeabalamenl for Bap Jonoa Namre Center Buldmp 0csign an anglneednp at7he Loop Road pnrLpp 10l.50ii Jonaa Farn.1 Pmperiy 0welapment 1717 5 70,009`: NoGa corns Park lmPrwementa ll2i '5 :187,000. Kos:a Park lmprovemenm [731 $ 82,000i' Community 5eMcea Ot5xo (74) 5 : : : : : : :. :'BQ9.09Q : : In-bno Harkey REak Shoda Gwe:mO(45y S .270,900 Chesapeake Palk lmomvemam3 ;16) $ ::148,000 i1 Bob Jon" Palk N.Ith Playground Covar(17) $ '90,0 A"Mure May Rubbamod Sudnca(16) :5 : : : - IOab Jones - North Pmypround Rubberized Surfadnp (101 !Skala Patk(20) 5 77.000 EM%BicYde Dip 111 ^ �� S :72.0{1.0.',: -__ _ ----------- _____ Bherfann;d Earl Oranege ]mprwmm�ah (Y>2) S 35,OOQ ........ ____...»» » ».....__.._.__ EI- ema-al Waal Dnonapn Relaft.n Pond (237 S :5270,006. Ramadan Comer S0) _____________ Tdtat Project Ex�dlltrres PmjeclRnervO (45(- axrludas JAaS:hinp Fundahand AcgviaRlsn7 Total Proceed. Lea. Total CommUments S 783.658 S 585,906 S 1.285,548 S 14,842 S 206.060 $ 400.009 5 290,000 s 400.0991 5 S 1.330.909 s 61 000 s 70 000 s 37,625 5 27fl 966 S 200.000 S 2.500,000 S 200.000 S 1,704,000 96,000 - 55,360 ? S 165,057 S 19,067 S (55,943) S 954,647 Mid-par amendment 5 70.009 S 181.000 5..».._. (100 •-------------- -- ------- -- s 800.ODO s 270.900 s 148.909 5 90.090 s 90.000 5 78.tl99 S 77 -006 5 27fl 966 S 200.000 S 2.500,000 S 200.000 S 1,704,000 96,000 - 55,360 ? S 165,057 S 19,067 S (55,943) S 954,647 Mid-par amendment