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Home My WebLink AboutT11-23 Ordinance No. T11-23 AN ORDINANCE AMENDING THE 2022 BUDGET BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS: Section 1. That the 2022 budget of the City of Elgin adopted in lieu of an appropriation ordinance be and is hereby amended in accordance with the schedule which is attached hereto and made a part hereof by reference. Section 2. That this ordinance shall be in full force and effect from and after its passage. 7t David J. Kap , Ma or Presented: April 26, 2023 Passed: April 26, 2023 Omnibus Vote: Yeas: 9 Nays: 0 Recorded: April 26, 2023 Published: April 26, 2023 -- A st: Kimberly Dewis, Jerk i e • -F .... IWO 77 Property Tax $27,476,740 $27,800,000 $27,800,000 Police Pension 8,352,200 8,453,930 8,453,930 Fire Pension 6,277,690 6,353,730 6,353,730 Sales Taxes 39,183,070 34,520,000 34,520,000 Income Tax 18,705,860 13,289,000 13,289,000 Telecommunications Tax 1,492,470 1,350,000 1,350,000 Beverage Tax 1,728,390 1,400,000 1,400,000 Natural Gas Tax 3,356,700 2,000,000 2,000,000 Electricity Tax 4,261,510 4,400,000 4,400,000 Local Motor Fuel Tax 1,640,530 1,800,000 1,800,000 Refuse Fee 7,428,450 7,385,780 7,385,780 Ambulance Services 71836,100 6,300,000 6,335,000 Licenses, Permits& Fines 5,167,980 3,457,360 3,457,360 Charges for Services 2,923,110 2,698,790 2,722,440 Transfers In 7,213,030 7,454,550 7,454,550 Use of Reserves 0 0 702,610 All Other 11,126,650 6,323,560 6,966,730 7Mayorandouncil $266,630 $275,930 $275930 284,760 286,660 291,090 City Manager 1,232,930 1,592,750 1,793,560 Economic Development 502,580 596,600 596,600 Legal 1,202,700 1,331,100 1,333,900 Boards/Commissions 544,420 687,340 617,010 Non-Departmental 11,307,630 12,057,270 12,421,550 Finance 2,535,410 2,546,200 2,609,700 Human Resources 842,130 1,164,450 1,250,550 Information Technology Systems 1,826,220 1,743,840 1,743,840 Purchasing 362,530 372,170 374,000 Neighborhood Services 3,558,270 3,713,420 3,717,060 Community Development 1,329,000 1,420,420 1,414,780 Police 49,776,570 50,237,980 50,403,840 Fire 30,036,930 30,848,510 30,987,760 Building Maintenance 3,237,150 3,304,590 3,304,590 Public Works 19,276,960 20,426,120 20,874,020 311 Call Center 888,260 950,620 950,620 City of Elgin' I- 2022 Budget Consolidated • PT 10 .. r Revenue, 1,718,130 1,542,500 1,542,500 Expenditures 509,340 1,542,500 1,542,500 AmerIcan Rescue Funds(221) Revenue 5,664,760� 19,505,640 19,505,640 Expenditures 5,533,650 19,505,640 _ 19,505,640 .. i . Revenue 543,690 1,158,250 1,415,680 Expenditures 543,690 1,158,250 1,415,680 77 Revenue 653,010 239,000 716,390 Expenditures 653,010 239,000 716,390 Revenue 4,908,470 4,178,500 5,802,960 Expenditures 1,708,530 7,175,320 8,799,780 Revenue 118,970 101,000 101,000 Expenditures 0 101,000 101,000 Revenue 996,610 1,100,000 1,100,000 Expenditures 721,830 1,100,000 1,100,000 Elgin Riverboat(275) Revenue 11,222,380 17,239,110 18,852,560 Expenditures 7,397,960 17,239,110 18,852,560 Revenue 9,066,380 9,385,430 9,385,430 Expenditures 8,844,090 9,385,430 9,385,430 Motor Fuel Tax(290) Revenue 6,936,800 9,780,000 9,987,330 Expenditures 6,332,370 9,780,000 9,987,330 Operatinggemetery Revenue 665,780 602,270 602,270 Expenditures 597,090 602,270 602,270 �. Revenue 11,318,940 9,738,170 9,885,250 Expenditures 9,271,570 9,738,170 9,885,250 Revenue 1,116,300 1,1293 Wo 1.,i29,300 Expenditures 4?9,9[:0 1,129,300 300 Revenue 2,901,140 3,051,300 3,057,300 Expenditures 3,033,090 3,051,300 3,051,300 Revenue 4,000 0 294,500 Expenditures 43,540 0 294,500 Revenue 4,350 0 387,990 Expenditures 700 0 _ 387,990 Revenue 110,220 6,644,360 10,462,960 Expenditures 0 6,644,360 _ 10,462,960 R 5,253,240 0 8,589,890 Expenditures 340,720 0 8,589,890 R(,v w m e 500,380 160,000 160,100 [xper)dlture 77,000 160,000 160,100 Revenue 4 700 100,000 145,230 Expenditures 109,020 100,000 145,230 Revenue 6,818,650 5,902,500 6,240,940 Expenditures 2,043,630 5,902,500 6,240,940 Revenue 35,898,140 32,434,240 39,851,450 Expenditures 36,864,610 34,906,640 42,323,850 Revenue 451,980 1,000,000 1,031,000 Expenditures 196,640 1,000,000 1,031,000 ,. siwer . . Revenue 223,380 207,600 237,040 Expenditures 17,620 207,600 237,040 d i Revenue 4,674,260 3,616,730 4,385,830 Expenditures 4,004,290 3,810,350 4,579,450 Revenue 5,706,190 5,239,380 6,463,680 Expenditures 4,966,160 5,239,380 6,463,680 Revenue 4,484,240 5,363,380 5,997,210 Expenditures 5,377,080 5,363,380 5,997,210 alum Revenue 13,287,060 13,964,260 13,964,260 Expenditures 12,470,090 13,126,380 13,126,380 Cemetery Perpetual Care(520) ____... Revenue 44,840 22,990 22,990 Expenditures 24,920 22,990 22,990 Retiree medical insurance(636) Revenue 917,300 3,764,500 3,764,500 Expenditures 2,205,640 2,049,820 2,049,820 00 Revenue (10,791,380)1 22,352,640 22,352,640 Expenditures 13,165,060 12,078,010 12,078,010 Fire Pension(711) Revenue (11,483,070) 16,465,520 16,465,520 Fxpenditures 10,064,290 9,339,180 9,339,180 All , REPORT TO MAYOR & MEMBERS OF CITY COUNCIL ELGIN THE CITY IN THE SUBURBS' AGENDA ITEM: K MEETING DATE: April 12, 2023 ITEM: Amendments to the 2022 Budget Consistent with the Illinois Municipal Budget Law (No Cost) OBJECTIVE: Provide budget amendments to reflect actual financial activity undertaken within the 2022 Budget. RECOMMENDATION: Adopt the proposed amendments to the 2022 Budget. The city's annual budgets are prepared using revenue estimates and expenditure recommenda- tions. This inherently speculative nature of budgeting makes it impossible to predict with com- plete accuracy the funding levels necessary for the coming fiscal year. The Illinois Municipal Budget Law requires the approval of year-end adjustments that reflect the actual financial and programmatic changes approved by the city council during the budget year. By amending the city budget in a retroactive fashion, the adjusted budget can reflect the actual funding requirements needed by the city. Amendments are required if the actual revenue or expenditure exceeds what was budgeted for the fiscal year. Under budget items are not normally amended. The most sig- nificant amendments have been previously reported to the city council. BACKGROUND Budget amendments are brought before the city council each year for consideration as required by the Illinois Municipal Budget Law. These adjustments are necessary to implement city council decisions made during the year and to reflect actual financial and programmatic changes that have occurred. While much of this information has been previously reported to the city council, this memorandum is designed to provide supplemental information regarding the proposed amendments to the 2022 Budget. OPERATIONAL ANALYSIS The annual budget must be adopted by the city council before the beginning of the fiscal year. The speculative nature of budgeting makes it impossible to predict with complete accuracy the 1 funding levels necessary at the fiscal year's inception. Because the budget is prepared using rev- enue estimates and expenditure recommendations, it must be amended to reflect the actual fi- nancial activity undertaken during the year. By amending the city budget in a retroactive fashion, the adjusted budget can reflect the actual funding requirements needed by the city. Amendments are required if the actual revenue or ex- penditure exceeds what was budgeted for the fiscal year. For example, if a fund cost center ex- pends over its budgeted amount, it is amended. When it comes in under budget, it is normally not amended. The city adopts budgets for seven fund types and each is reviewed and considered for budget amendments: • General Fund • Special Revenue Funds • Debt Service Fund • Capital Improvement Funds • Enterprise Funds • Internal Service Funds • Trust and Agency Funds Amendments to the 2022 Budget The following chart identifies the recommended amendments to the 2022 Budget.These amend- ments reflect the budget adjustments made throughout the course of the year. The analysis pro- vided for the adjustments in each fund type is not intended to be exhaustive, but rather to illu- minate the major components of the required adjustments. General Fund GENERAL FUND Original Amended Budget Budget Adjustment Note Total Revenues $134,986,700 $136,391,130 $1,404,430 1 Expenditures by department: Mayor and Council 275,930 275,930 0 City Clerk 286,660 291,090 4,430 Office of the City Manager 1,592,750 1,793,560 200,810 2 311 Center 950,620 950,620 0 Economic Development 596,600 596,600 0 Legal 1,331,100 1,333,900 2,800 Boards/Commissions 687,340 617,010 (70,330) 3 Finance 2,546,200 2,609,700 63,500 4 Human Resources 1,164,450 1,250,550 86,100 5 Information Technology Systems 1,743,840 1,743,840 0 2 Purchasing 372,170 374,000 1,830 Neighborhood Services 3,713,420 3,717,060 3,640 Community Development 1,420,420 1,414,780 (5,640) Police 50,237,980 50,403,840 165,860 6 Fire 30,848,510 30,987,760 139,250 7 Building Maintenance 3,304,590 3,304,590 0 Public Works 20,426,120 20,874,020 447,900 8 Non-Departmental 4,057,270 3,921,550 (135,720) 9 Financing Transfers 1 8/000/000 1 8/500/000 1 500,000 10 Total Expenditures $133,555,970 1 $134,960,400 $1,404,430 Most budget adjustments are transacted within the General Fund. It should be noted that many of the budget adjustment requests involve expenditure line items within the same division and department. In these instances, the department's total budget allocation remains unchanged. Explanations for all departmental adjustments totaling more than $15,000 are provided below. 1. Revenue adjustments were made in the amount of$1,404,430. Adjustments totaling $505,900 were made to reflect the use of escrow funds. Funds are placed in escrow accounts when they are designated for future expenditures and require a budget adjustment so the funds can be spent. Most significantly, escrowed transportation impact fees, in the amount of$426,500, were used to fund design en- gineering expenditures for the U.S. Route 20 and Reinking Road roundabout improve- ment project.Additional examples of escrow funds include funds set aside for sanitary sewer review by engineering firms, funds for police department programs and public safety impact fees. The remainder of the adjustments are the result of purchase orders rolled from 2021. The need to roll purchase orders is the result of two circumstances. The first situation relates to projects approved by the city council, late in the year, after the next year's budget has been prepared, necessitating this type of budget adjustment. In addition, projects are occasionally estimated to be completed in the current year, but delays in completing the projects requires that a budget adjustment be made to carry the pro- ject over to the next fiscal year. 2. The budget was increased to recognize the transfer of funding, for a staff position, from the Boards and Commissions Budget. A corresponding decrease is reflected in the amended budget for that department. In addition, contractual services were in- creased by a transfer from the non-departmental budget to provide funding for stra- tegic planning services. 3. The budget was decreased for the transfer of a staff position to the office of the city manager budget. A corresponding increase is reflected in the amended budget for that department. 3 4. The finance budget was increased utilizing contingency funds, originally budgeted in the non-departmental budget, to provide funding for increased postage costs. In ad- dition, contractual services were increased for ambulance billing services. A corre- sponding revenue adjustment was made for this increase. 5. The human resources budget was increased utilizing contingency funds, originally budgeted in the non-departmental budget, to provide funding for executive recruit- ment services. 6. The police department budget was increased for the acceptance of the Edward Byrne Memorial Justice Assistance Grant which provided for cameras for the department's real time information center. Increases to expenditure budgets were also made for the Kids United program which reflects the use of escrow funds set aside for this pro- gram and for training reimbursements from the Illinois Law Enforcement Training Board. Corresponding revenue adjustments were made for these grants. The remain- der of the adjustments are the result of purchase orders rolled from 2021. 7. The fire department budget was adjusted to reflect the purchase of a vehicle that was funded by a donation. A corresponding revenue adjustment was made for this dona- tion. In addition,the budget was increased utilizing contingency funds originally budg- eted in the non-departmental budget, to provide funding for emergency vehicle re- pairs and higher than planned for utility costs. 8. The public works budget was increased utilizing contingency funds, originally budg- eted in the non-departmental budget, to fund refuse services and parking deck re- pairs.The remainder of the adjustments are the result of purchase orders rolled from 2021. 9. The General Fund's "non-departmental" category includes expenditures that are not directly related to the operations of other departments and capital purchases. Exam- ples of costs charged to this category include employee programs, lobbyist fees, an allocation for property insurance and banking and agency fees. In addition, this cate- gory includes the General Fund's contingency account. Adjustments reducing the con- tingency line item are completed when transfers are processed to cover expenditures in other departments. In 2022,the budget was reduced by$500,000 to fund a financ- ing transfer to the fleet division (Internal Service Fund) to provide for the significant increase in vehicle fuel costs. Increases to this departmental budget include an increase to contractual services to reflect the use of transportation impact fees for the U.S. Route 20 Reinking Road roundabout improvement project.This item was also offset by a revenue adjustment. The remainder of the adjustments are the result of purchase orders rolled from 2021. The need to roll purchase orders is the result of two circumstances. The first situation mod, 4 relates to projects approved by the city council, late in the year, after the next year's budget has been prepared, necessitating this type of budget adjustment. In addition, projects are occasionally estimated to be completed in the current year, but delays in completing the projects requires that a budget adjustment be made to carry the pro- ject over to the next fiscal year. 10. Financing transfers were increased, from discretionary funds, to reflect the transfer of additional funding to the Equipment Replacement Fund for fuel purchases. Special Revenue Funds SPECIAL REVENUE FUNDS Original Adjusted Adjustment Notes Budget Budget Revenues $75,699,170 $80,026,310 $4,327,140 1 Expenditures $78,695,990 $83,023,130 $4,327,140 2 Special revenue funds are established to account for specific resources (other than expendable trusts or major capital projects)that are legally restricted to expenditures for specified purposes. 1. The budget for community development block grant revenue (CDBG) was increased by $257,427 to reflect 2022 grant year CDBG program revenue. Revenues within the Drug Asset Forfeiture fund were increased $477,389 to recognize the use of deferred revenues that had been assigned to future purchases. Central Area TIF revenue was increased $1,574,209 to reflect the use of fund reserves for an approved project that was not funded in the 2022 adopted budget.The remaining adjustments to the special revenue budgets were the result of rolling over purchase orders from the prior year to the current budget year. 2. CDBG budgeted expenditures were increased for the 2022 grant year approved pro- jects. The expenditure budgets within the Drug Asset Forfeiture funds were adjusted to account for police department equipment purchases. The expenditures for the Central Area TIF were increased to provide for roof repairs to city property that ex- ceeded budgeted expectations. Purchase order rollovers account for the remaining adjustments to the special revenue expenditure budgets. 5 Debt Service Fund DEBT SERVICE FUND Original Adjusted Adjustment Notes Budget Budget Revenues $3,051,300 $3,051,300 $0 Expenditures $3,051,300 $3,051,300 $0 The debt service fund accounts for the accumulation and payment of the principal and interest on long-term debt. Capital Improvement Funds CAPITAL IMPROVEMENT FUNDS Original Adjusted Adjustment Notes Budget Budget Revenues $12,806,860 $26,281,610 $13,474,750 1 Expenditures $12,806,860 $26,281,610 $13,474,750 1 Capital improvement funds are used to account for the acquisition and construction of major capital facilities and infrastructure other than those financed by enterprise funds. These projects normally span more than one year. In a given year, the budget may be much higher than what is actually spent due to changing work schedules that can delay a project into the following fiscal year. In these instances, the subsequent year's expenditures are greater than anticipated and require budget adjustments. 1. The adjustments to revenue and expenditures within the capital improvement funds are the result of rolling over purchase orders from the prior year to the current budget year. Projects, anticipated to be completed in 2021,were completed in 2022 requiring an adjustment to the budget. In addition, a budget adjustment was made as the result of the issuance of $13.4 million of general obligation bonds for infrastructure im- provements. i 6 Enterprise Funds ENTERPRISE FUNDS Original Adjusted Adjustment Notes Budget Budget Revenues $37,258,570 $45,505,320 $8,246,750 Expenditures $39,924,590 $48,171,340 $8,246,750 1 Enterprise funds account for operations that are financed and operated in a manner similar to private business where the intent is that the costs of providing goods or services to the general public be financed or recovered primarily through user charges. 1. Adjustments, within the utility fund, to revenue and expenditure budgets were made as a result of carrying over the outstanding balance of open purchase orders created in 2021. In addition, adjustments were made to revenue and expenditures in the Util- ity fund to recognize the receipt of a $4 million forgivable loan from the Illinois Envi- ronmental Protection Agency for lead service line replacements. Revenues and ex- penditures in the Golf fund were also increased due to a strong golfing season result- ing in increased green fees and a corresponding increase in expenditures. Internal Service Funds INTERNAL SERVICE FUNDS Original Adjusted Adjustment Notes Budget Budget Revenues $24,567,020 $26,425,150 $1,858,130 1 Expenditures $23,729,140 $25,587,270 $1,858,130 1 1 Internal service funds are used to account for the financing of goods or services provided by one department to other departments of the government unit, on a cost reimbursement basis. 1. Adjustments within the equipment replacement fund, to revenue and expendi- ture budgets, were made as a result of carrying over the outstanding balance of open purchase orders, for public works vehicles, created in 2021. In addition, the transfer from the general fund was increased and a corresponding increase was made in the budget for fuel expenditures. Rising fuel costs necessitated additional funding for this commodity. Revenues and expenditures in the Risk Management fund were also adjusted to provide funding for an increase in property insurance premiums and general liability claims that exceeded budgeted expectations. A 7 Trust and Agency Funds TRUST AND AGENCY FUNDS Original Adjusted Adjustment Notes Budget Budget Revenue $42,605,650 $42,605,650 $0 Expenditures $23,490,000 $23,490,000 $0 Fiduciary funds are used to account for assets held in a trustee or agency capacity for others and which cannot be used to support the City's own programs.These funds include the Police Pension fund, the Firefighters Pension fund and the Retiree Health Insurance Trust. INTERESTED PERSONS CONTACTED None. FINANCIAL ANALYSIS The budget amendments will adjust the 2022 adopted budget and better reflect the actual finan- cial transactions that occurred throughout the course of the year. Sufficient funding sources ex- isted at the time the adjustments were processed. BUDGET IMPACT FUND ACCOUNT PROJECT# AMOUNT AMOUNT BUDGETED AVAILABLE N/A N/A N/A N/A N/A LEGAL IMPACT None. ALTERNATIVES The City Council could choose not to amend the 2022 Budget; however, this would be incon- sistent with sound financial management practices. NEXT STEPS Amend the 2022 Budget. fit;; g! 8 Originators: Debra Nawrocki, Chief Financial Officer/Budget Officer Final Review: William A. Cogley, Corporation Counsel/Chief Development Officer Richard G. Kozal, City Manager ATTACHMENTS A. Adjusted 2022 Budget 9