ADMINISTRATION - Joe Huss, Finance Director
Title
AMEND 2020 GENERAL FUND BUDGET & AUTHORIZE TRANSFER OF UNRESTRICTED RESERVES TO CAPITAL
Background
As part of the 2020 budget process, appropriations were made that were consistent with the best information available at the time of budget adoption in December 2019. As the COVID-19 pandemic struck in mid-March and 2020 unfolded, there are certain areas wherein circumstances have led the need to implement budget amendments for 2020. These adjustments are associated with the unanticipated pandemic and the need to adjust personnel costs, particularly in the City Clerk Division for costs associated with conducting three elections and in the Public Safety and Public Works departments for response to the pandemic.
With the exception of budget additions to the Information Technology and Communications Divisions, the budget amendments required only a reallocation of appropriated funds within departments to accomplish the budget amendments. This was due mostly to the cost containment measures put in place at the outset of the COVID-19 pandemic, especially with the containment measures of not filling new or vacant positions.
The resolution also authorizes the re-appropriation of unrestricted General Fund reserves to the Capital Equipment Fund. Annually, once the accounting books are closed for the prior year and the City’s annual financial audit is complete, Council will authorize the transfer of available unrestricted reserves to certain programs. Initially for 2020, Council authorized the transfer of over $2,000,000 in unrestricted General Fund reserves to the Capital Equipment Fund for the purchase of equipment in 2020. However, as the year unfolded, Council directed that certain capital purchases be cut for 2020. With this direction, the need for funding of 2020 capital purchases was reduced to $1,700,000.
Recommendation
Approve the following resolution.
Body
WHEREAS, Sound budgeting principles promote appropriating necessary funds required to accomplish approved objectives; and
WHEREAS, Sound budgeting principles also promote providing for contingencies and unforeseen emergencies so as to not prevent objectives from being met; and
WHEREAS, Appropriations were made in 2020 sufficient for anticipated activity; and
WHEREAS, actual activity and evolving priorities have exceeded what was originally anticipated resulting in expenditures exceeding budgeted appropriations in certain divisions within the General Fund; and
WHEREAS, the COVID-19 pandemic hit Minnesota in March, 2020; and
WHEREAS, the State of Minnesota took action to mitigate the spread of the pandemic, including the closure of certain businesses and activities; and
WHEREAS, the effect of these business closures and general effect of the pandemic in slowing the economy resulted in revenue shortfalls in Blaine; and
WHEREAS, Blaine took immediate action to contain costs and reduce expenditures in its General Fund; and
WHEREAS, these cost containment measures made funds available for reallocation from certain City operational activities to other activities directly impacted by the City’s efforts to mitigate the spread of COVID-19; and
WHEREAS, the federal government passed the CARES Act that provided over $5 million for Blaine in 2020; and
WHEREAS, contingency funds are on-hand and available for use in 2020;
NOW THEREFORE BE IT RESOLVED that the City Council of Blaine amends the 2020 General Fund Budget, and authorizes the City Manager to implement these amendments in the budget as follows:
• REVENUE: Increase Transfers-In from Special Revenue Funds, 101.00.000.000-3912, in the amount of $2,714,400
• EXPENDITURES:
• Administration Department, City Clerk-Elections Division
o Reallocate $20,000 - from Professional Service 101.20.230.232-4301 to Part-time Wages, 101.20.230.232-4103
• Administration Department, Communications Division
o $10,000 - Overtime Wages, 101.20.290.291-4102
• Finance Department, Information Technology Division
o $40,000 - Contractual maintenance 101.30.330.331-4343
• Public Safety/Police Department,
o Reallocate $140,000 from the Patrol Division
§ -$130,000 - Salaries, benefits, 101.40.460.462-41XX; and
§ -$10,000 - Other contractual services, 101.40.460.462-4399
To:
o Emergency Preparedness Division
§ $25,000 - Salaries, benefits, 101.40.430.431-41XX
§ $10,000 - Other contractual services, 101.40.430.431-4399
o Administrative Services Division
§ $55,000 - Salaries, benefits, 101.40.460.461-41XX
o Special Operations Division
§ $50,000 - Salaries, benefits, 101.40.460.463-41XX
• Public Safety Department, Community Standards Division
o Reallocate $20,000 from Fire Inspections
§ -$20,000 - Salaries, benefits, 101.40.490.492-41XX
To:
o Community Standards Administration
§ $5,000 - Salaries, benefits, 101.40.490.491-41XX
o Community Standards Neighborhood Services
§ $10,000 - Salaries, benefits, 101.40.490.493-41XX
o Community Standards Housing Services
§ $5,000 - Salaries, benefits, 101.40.490.494-41XX
• Public Works Department
o Reallocate $25,000 - from Parks Maintenance, Other contractual services, 101.50.530.534-4399 to Forestry, Other contractual services, 101.50.530.535-4399
• Public Services Department, Recreation Division
o Reallocate $19,000 from Recreation Facilities
§ -$9,000 - Lexington Athletic Complex Part-time Wages, 101.60.600.602.6077-4103
§ -$10,000 - Lexington Athletic Complex Contractual services, 101.60.600.602.6077-4399
To:
o Recreation Administration
§ $9,000 - Salaries, benefits, 101.60.600.601-41XX
§ $10,000 - Other contractual services, 101.60.600.601-4399
• Community Development Department
o Reallocate $25,000 from:
§ Planning Division, Salaries, benefits, 101.70.700.701-41XX
To:
§ Building Inspections Division, Salaries, benefits, 101.70.760.761-41XX
BE IT FURTHER RESOLVED that the City Council of Blaine amends the 2020 General Fund Budget for the transfer of unrestricted reserves to the Capital Equipment Fund and authorizes the transfer of such funds as follows:
• For Transfer of Available Unrestricted Reserves
o $1,700,000 - Operating transfer 101.00.000.000-4914 to Equipment Fund (410.00.000-3911)
PASSED by the City Council this 7th day of December, 2020.