TITLE
HOLD a public hearing and consider an ordinance amending the FY 2017 Annual Budget and Plan of Municipal Services of the City of Killeen for the termination of the Fleet Funding Program.
SUMMARY
AGENDA ITEM
FY 2017 Fleet Funding Program Termination Budget Amendment
ORIGINATING DEPARTMENT
City Manager / Finance
BACKGROUND INFORMATION
On January 26, 2016, the City Council approved the establishment of an internal service fund and a Fleet Funding Program (FFP). The FFP consists of two components: fleet replacement for the purchase of fleet, and fleet operations for the maintenance of fleet. The goal of the FFP is to ensure that adequate funds are available to purchase and maintain City vehicles. A total of $5,500,000 was transferred into the internal service fund to start the program.
After the FFP was established, the outlook on the City’s financial health changed significantly. The strategy is now shifting to focus on the City’s current financial condition. Part of the financial recovery process is to address immediate budget shortfalls. The newly adopted FFP is intensifying the strain on the operating funds.
DISCUSSION/CONCLUSION
The recommendation is to terminate the FFP and return the remaining funds to the original source on a pro-rata basis. Fleet Operations (e.g. technicians) will remain in the internal service fund and will be supported by the operational funds that receive services from the department. Since the General Fund did not make a contribution towards the FFP in FY 2017, a total of $643,777 will be left in the internal service fund to cover the General Fund’s contribution towards fleet operations. That leaves an estimated balance of $1,377,665 to be returned to the original source.
At the inception of the FFP, Solid Waste contributed $1,700,000, Water & Sewer contributed $2,800,000, and $1,000,000 was contributed from the 2014 Certificates of Obligation bond proceeds. Reducing the initial contribution made by the respecti...
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