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 transfer of unallocated Solid Waste funds to the General Fund.
SUMMARY
AGENDA ITEM
FY 2017 Solid Waste and General Fund 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, the Fleet Replacement Program 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 and the Fleet Replacement Program was terminated. The estimated $1,377,665 remaining balance that was contributed towards the purchase of fleet was distributed on a pro-rata basis back to the original funding source.
DISCUSSION/CONCLUSION
The Solid Waste Fund received $491,826 of the $1,377,665 remaining balance. Since the Fleet Replacement Program was terminated, the Solid Waste Fund will also recognize a $1,517,515 reduction in expenses for FY 2017. The reduction in expenses represents Solid Waste’s contribution towards the Fleet Replacement Program. The total economic benefit for Solid Waste due to the termination of the Fleet Replacement Program is $2,009,341 ($491,826 returned contribution + $1,517,515 expense reduction).
The Solid Waste Fund has a FY 2017 budgeted operating surplus of $432,725 and a projected ending fund balance of $4.1miillion or 24.7%. These operating results do not take into consideration the economic benefit derived from the closure of the Fleet Replacement Program that adds to the referenced budgeted surplus and fund balance.
Given the operating results above, the recommendation is to make a one-time transfer of the unallocated funds from the closure of the Fleet Replacement Program from Solid Waste to the General Fund. The recommended amount of the one-time transfer is $1,677,216. This leaves $332,125 ($2,009,341 - $1,677,216) for the purchase of two waste disposal trucks that were scheduled to be purchased as part of the Fleet Replacement Program. The transfer will cover the budgeted $1.4 million shortfall in the General Fund and increase the projected ending unassigned fund balance from $14.7 million or 18.7% to $16.3 million or 20.9%.
FISCAL IMPACT
The budget amendment will allow for the transfer of funds from the Solid Waste Fund to the General Fund. The following budget changes will be made:
|
Revenues |
|
Account Number |
Description |
Budget |
Change |
Amended |
|
010-0000-371.10-00 |
Transfer from Solid Waste |
$2,977,174 |
$1,677,216 |
$4,654,390 |
|
Total Revenues |
$2,977,174 |
$1,677,216 |
$4,654,390 |
|
Expenses |
|
Account Number |
Description |
Budget |
Change |
Amended |
|
540-3460-439.44-13 |
FFP Equipment/Vehicle |
$1,320,000 |
($910,509) |
$409,491 |
|
540-3465-439.44-13 |
FFP Equipment/Vehicle |
$880,000 |
($607,006) |
$272,994 |
|
540-9595-439.95-01 |
Transfer to General Fund |
$0 |
$1,677,216 |
$1,677,216 |
|
Total Expenses |
|
$2,200,000 |
$159,701 |
$2,359,701 |
RECOMMENDATION
Staff recommends that City Council approve the ordinance allowing a one-time transfer of unallocated Solid Waste funds to the General Fund.