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Item 7B Memo1l 1 I • : \ � 1l March 18, 2011 TO: Billy Campbell, City Manager FROM: Sharen Elam, Director of Finance Ext. 1713 SUBJECT: Ordinance No. 830 -A, 2 °d Reading, Amending Ordinance No. 830, amending FY 2002 -03 Annual Budget. Action Requested: City Council consideration of Ordinance No. 830 -A to amend the FY 2002- 03 Annual Budget. Background Information: Ordinance No. 830 -A is presented to the Council to reflect the proposed budget amendments to the Adopted FY 2002 -03 Annual Budget. The proposed amendments to the budget represent an increase in expenditures of $223,607, $55,000 in General Fund and Park Dedication Fund, respectively and a decrease in expenditures of $151,147 in Southlake Park Development Corporation (SPDC) budget. "Exhibits A, B and U are the attachments to the ordinance that illustrate how the proposed amendments fit into the respective budgets. The General Fund budget amendments to the departments are as follows: Division 102, Human Resources: Reflects a proposed increase of $22,000, due to the HR consultant hired after the resignation of the previous HR Director and ongoing personnel investigations. This request would require any on -going future cost. Division 105, Support Services: Reflects a proposed increase of $5,828. Recently, city staff advertised for proposals for audiovisual services. Based on the proposals received, city staff is recommending hiring an AV technician. The current budget for AV taping is $32,500; we have depleted $19,200. Assuming current spending continues through July, this would allow time for approval of position, advertisement during June, interview and hiring process during July. By the end of July, we would discontinue using TenStar's services; we are anticipating having $5,416 of budgeted funds remaining from TenStar's contract. Three month's salary and benefits for the AV technician would be $11,244. After using the savings of $5,416 the additional cost of hiring the technician would be $5,828. The AV technician's salary and benefits for FY 2003 -04 is anticipated to be around $45,000, an increase of $12,500 above the current budget for audiovisual services of $32,500. Division 106, Finance: does not reflect a dollar change. The adopted budget included $25,000 for a multi -year financial plan. Staff is asking for the funds to be re- appropriated for budget /multi -year software. The software package includes multi -year capabilities. The city will have multi- year budgets by detail line items. Currently, finance prepares a 3 year outlook each year but the outlook does not include line item detail. The approval of this request would have a $10,000 recurring cost for next budget year. Division 146, Public Works Administration: Reflects a proposed increase of $10,000 due to a required and unanticipated traffic study in Timarron subdivision to explore the cause of cut - through traffic which had impacted the safety of the residence. There is not any recurring cost associated with this request. Division 150, Planning Development: does not reflect a dollar change. However, a future increase might be necessary due to a potential amendment to the current 2025 consultant's contract. The potential amendment to the contract would be $25,000 but we have $10,000 available from other areas, therefore; we would potentially in the future request a budget amendment of $15,000. Division 161/162, Community Services/Parks and Recreation: Reflects a proposed increase of $166,147. The majority of the increase $151,147 is due to staff s recommendation of transferring the park maintenance workers from SPDC operating fund back to the General Fund retroactive as of April I st . If you will recall, staff discussed in detail the importance of removing the workers from SPDC's budget. The worker's were transferred from the General Fund to the SPDC in fiscal year 2000 -01 in an effort of maintaining the tax rate of .422. The intention was to transition the worker's back into the General Fund as soon as possible but due to budget restraints that was not an option previously. Funds are now available for the transition; also in an effort of complying with our bond convent of maintaining a certain level of reserve in the SPDC fund balance the time has come to transition the worker's back to the General Fund. If this amendment is approved the 2003- 04 General Fund budget impact would be an increase in expenditures of around $314,113. The remaining increase of $16,000 is related to roof repairs for the Community Service Building, Lodge Building, and Restroom/Concession Building in Bicentennial Park. These buildings are in immediate need of substantial roof repairs. The Community Services Building houses the offices of the Parks and Recreation staff members, and the roof on these building leaks in several locations, requiring strategically locating plastic buckets to catch the water in order to avoid damage to floors, computers, and copiers. Because this is a modular building with a flat roof, it requires the installation of a poly material over the entire structure. The Lodge Building and Restrooin/Concession building has numerous shingles that have been torn off. While these costs may be covered in whole or in part by insurance as a result of the recent storms, it is quite possible that insurance may determine that because of pre - existing conditions that the repairs fall outside the scope of coverage. As such, staff is requesting the necessary funds to repair the buildings in the event insurance does not cover the repairs. Staff will not make any repairs until the final determination by our insurance carrier. The roof repairs would be a one time cost without any associated recurring cost. Division 164, Library Services: Reflects net increases of $15,050 for this fiscal year only; there are not any future cost associated with this budget amendment. $10,000 of the request will be used for resource materials. Staff is completing the ordering for the $30,000 grant from the Hudson Foundation. The breakdown on this funding has been dedicated to print and reference materials. Staff has identified needs for additional audiovisual materials to develop the collection. These items are in high demand, according to circulation statistics our current AN materials circulate over 100% (in April 153 %) of the time. The long term results of this high circulation rate is that 1) these materials will be in need of replacement much sooner; 2) there are al lot of items that are not available to patrons; and 3) in the long run, patrons become dissatisfied with Library Services. This funding will develop the overall collection by targeting resources to a long term need and items that are high in demand. The remaining increase of $5,050 will be used to purchase additional checkpoint security tags for resource materials. The tags are placed on all books for the purposes of security, risk management, and inventory. The Library has processed 4,681 books over the last two months, and this mostly completed the initial baseline collection. Currently, on the 3r floor, there are 5,000 books from the Grapevine Library that have not been entered into the system. Staff would like to process as many of these books over the summer as possible, and this budget amendment would allow staff to continue moving forward on the book processing push. If you will recall, the adopted budget did not include a pay increase for the Directors. The attached proposed amended budget includes a 2% pay increase for Directors effective July 1, 2003 which will cost the City approximately $3,500 for the remainder of the fiscal year and approximately $14,000 annually for future years. Also, the City has experienced a tremendous increase in insurance premiums and we are anticipating an additional 20 %+ increase for the 2003 -04 year. We are recommending paying all employees with dependent family medical insurance an additional $50 per month effective July 1, 2003 to assist with the growing increase in insurance premiums. This benefit will cost the City an additional $12,750 for the remainder of the fiscal year and an additional $51,000 for all future years. The Park Dedication Fund budget amendment is as follows: If you recall in November 2002, City Council approved the funding of $55,000 for repairs to the entry drive at Bicentennial Park. The original proposal was to fund the repairs through Bicentennial "Coke" Fund. It is staffs recommendation to transfer the funding of this project to the Park Dedication fund. The SPDC budget amendment is as follows: As discussed above, this amendment would be a decrease of $151,147 to SPDC's operating budget. If this amendment is approved the 2003 -04 budget impact would be a reduction to SPDC's budget of about $314,113. Financial Considerations: The proposed amendment increases expenditures. It is expected that revenues will continue to come in at or slightly above budget estimates. It is anticipated that this plan will allow fund integrity to be maintained, as the expenditure adjustments reflect the general fund balance at 28.6% ($5,549,383), exceeding the requirements of our fund policy. The excess fund balance will assist with balancing the FY 2003 -04 and future budgets. If you recall during the FY 2002 -03 budget process that staff discussed the importance of focusing on the 3 year outlook. Citizen Input/ Board Review: Public Hearing, 2n reading scheduled for June 3, 2003. Legal Review: N/A Alternatives: The alternative is not to amend the budget and forgo the proposed revisions or modify /reduce proposed budget revisions. Supporting Documents: Ordinance No. 830 -A and Exhibit A, B and C Staff Recommendation: Approval of Ordinance No. 830 -A by the City Council.