Staff is requesting budget amendments to reflect changes since the 2024 budget was adopted.  The amendments acknowledge the significant deviations on a formal level and creates transparency.

Staff will continue to inform the City Council of budget variances through it’s monthly financial reporting and individual City Council actions with budget implications such as acceptance of grants, contractual agreements and capital project approvals.  However, this action provides budget amendments made in the 1st half of the year into an easy to follow single action item, allowing for greater transparency.

Proposed budget amendments include:

1) County Prosecution Costs - Paid from Court Fine Revenues (New proposed amendment)

Court fine revenue has been dedicated towards paying prosecution costs, which previously the city would net court fine revenue with prosecution costs for accounting purposes.  Based on auditor recommendation the City will be separating court fine revenue and prosecution expense.  There is no net impact on overall cost, as expenditures and revenues will be adjusted by the same amount, but will be more transparent for financial reporting purposes.

2) ERP Software Implementation Cost (New proposed amendment)

The City budgeted for the one-time implementation cost of new Oracle Cloud ERP software that would be replacing software used for various applications including human resources, payroll, general ledger, workflows, budgeting and financial reporting.  Shakopee is one of many member cities of the LOGIS consortium that has planned for the migration to the new software.  Shakopee's implementation will not occur in 2024 as originally expected.  This amendment transfers the budgeted funds to the Technology IS fund to allow the funds to be carried forward to 2025.

3) Two Additional Full-time Firefighter Positions (City Council Approved May 7, 2024). 

4) Public Works Union Contract (City Council Approved March 6, 2024)

5) Police Sergeants Union Contract (City Council Approved June 4, 2024)

6) Patrol Union Contract (City Council Approved June 4, 2024)

Budget amendments #3 to #6 are adjustments impacting personnel costs.  These have all been approved with previous City Council actions.  The amounts are funded through (1) $200k of Assigned 12/31/2023 Fund Balance for Public Safety (2) $230k of vacancy savings from open positions (3) $256,500 of budgeted unallocated/contingency funds.