Discussion:
Similar to the past couple of years, staff is requesting budget amendments for significant budget variances. This still will leave several other line item variances (positive and negative) but acknowledges the significant deviations on a formal level and creates transparency.
The City will continue to inform the City Council of budget variances through it’s monthly financial reporting to City Council and individual City Council actions with budget implications such as acceptance of grants, contractual agreements and capital project approvals. However, this action provides all budget amendments made during the year in one council action, which is more transparent and easier to follow.
City budget policy states “The City staff will monitor revenues and expenditures to adhere to their budgeted amounts. Monthly reports comparing budget with revenues and expenditures will be prepared. Line items within a division may be over spent as long as the total division budgets is not over spent”. With the approval of this budget amendment, we do not anticipate any division total will exceed their 2022 budget appropriation.
Proposed budget amendments include:
1) Implementation of part-time compensation study (Council Approved 4/19/2022)
2) Rental Housing & Code Enforcement Software (Council Approved 6/07/2022)
3) Utilities inflationary increases (New proposed amendment). As discussed throughout the year, in monthly financial and budget presentations, we have seen significant cost increases related to Electric and Natural Gas. Electric costs are tracking approximately 30% above budgeted amounts and Natural Gas approximately 40% above budgeted amounts. For the year, General Fund expenses remain within budget allocations in total, but this budget amendment formally recognizes the impact of the increases from these two utilities.
4) Motor fuel inflationary increases (New proposed amendment). Similar to utilities, as discussed throughout the year, in monthly financial and budget presentations, we have seen significant cost increases related to motor fuel. Motor fuel costs are tracking approximately 40% above budgeted amounts. For the year, General Fund expenses remain within budget allocations in total, but this budget amendment formally recognizes the impact on operations from the increase of motor fuels.
5) Credit card processing fees (New proposed amendment). Credit card companies charge a processing fee, typically around three percent of each transaction (different depending on the type of credit card). As a direct relationship to permit revenue exceeding budget expectations, credit card fees have also exceeded the appropriated budget. These fees are offset by building permit revenue.