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HomeMy WebLinkAbout133-02 RESOLUTIONRESOLUTION NO. 133-02 A RESOLUTION APPROVING A BUDGET ADJUSTMENT FOR THE COMMUNITY CODE ENFORCEMENT DIVISION REALLOCATING TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000 00) OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS PROVIDE HOUSING REHABILITATION SERVICES IN THE CBDG TARGET AREA; AND AMENDING THE ADMINISTRATIVE PROCEDURE TO AMEND THE BUDGET. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves a budget adjustment for the Community Code Enforcement Division reallocating Two Hundred Fifty Thousand Dollars ($250,000.00) of Community Development Block Grant (CDBG) funds provide housing rehabilitation services in the CBDG target area Section 2. That the Administrative Procedure to Amend the Budget is hereby amended by inserting the following at Budget Authority Level E In addition to the above, the Budget Office is authorized to process budget adjustments that reallocate existing funding within a federal grant program where the additional or changed appropriation is necessary to either comply with a change in use of the funding or in response to an unforeseen event. All related federal grant program requirements must be met. PASSED AND APPROVED this 3rd day of September, 2002. THER WOODRUFF, tty Clerk APPROVED: By Vii_'/ad DAN COODY, May • • o2 3 • NAME OF FILE: CROSS REFERENCE: Resolution No. 133-02 • 09/03/02 Resolution No. 133-02 09/03/02 Copy of the Budget Adjustment Form 08/14/02 Memo to Mayor Coody and City Council thru Hugh Earnest, Urban Development Director, from Yolanda Fields, CCE Director, regarding the budget adjustment 09/03/02 Staff Review Form 09/06/02 Memo to Yolanda Fields, Community Code Enforcement/Urban Development, from Heather Woodruff, City Clerk NOTES: fifty of Fayetteville, Arkansas Budget Adjustment Form • ga-s. /33 -oz Budget Year Department: Community Code Enforcement Division: Program: Housing Rehabilation 1 Date Requested Adjustment # q -o2 COPY roject or hem Requested: Reallocate funds from Projects for Victims of Family Violence. After reviewing with the agency, it was .determined that the agency was not ready to progress with the funded project. Project or Item Deleted: None. Reallocation of grant funds to better serve the community in the housing program lustification of this Increase: The funds need to be utilized at this time to help the community by increasing Housing program funding. Justification of this Decrease: PVFV is not ready to move forward on its project Account Name Salaries/Wages Office/Printing' Supplies Public Notification, Contract Services Habitat for Humanities Minor Equipment Account Name Projects for Victims of. Families Violarice increase Expense (Decrease Revenue) Account Number Project Number Amount 10,000.00 "1;000:00 500.00 230,500.00 5.000.00 3,000.00 Amount ease .E (250,000,00)_ 2180-4940-5100-00 -2180-4940-5200-00 218074.940-5301=00 2180-4940-5315-00 2180-4940-5390-39 2180-4940-5890-00 xpense (IncrAeccuntiNuvmebcue) 2180-4990-53907.27 Rcques By B g C' ordinator Approval Signatures Dcp • en! Direc or Ms) o Date $ - IJ•oy Date Date Type: A Project Number 91068-10 Budget Office Use OnIyi B c Dam of Approval . Posted to General Ledger _ ._.. . Posted to Project Accounting .,. _. Entered in Category Log c;..e r....,,• Rndod & Research / Yellow Copy: Requester E y .Yv • • XX AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW • STAFF REVIEW FORM • For the Fayetteville City Council meeting of September 3. 2002 FROM: Stephen Davis Name Budget & Research Admin Services Division Department ACTION REQUIRED: City Council consideration of a change in budget adjustment policy. • COST TO CITY: $N/A Cost of this Request Account Number Project Number N/A Category/Project Budget Category/Project Name Funds Used To Date Program Name N/A City-wide Remaining Balance Fund BiI reL Budgeted Item Budget Adjustment Attached Budget nager Administrative Services Director CONTRACT/GRANT/LEASE REVIEW: GRANTING AGENCY: Ac`h0.- / ager g/ Z/o,2. y� LiVt. 8 p Date j Internal ditor ate City Attorney Date ADA Coordinator ,. ,PV Purchasi6g Officer Date Grant Coordinator • Date Date STAFF RECOMMENDATION: Staff recommends City Council consider revision of the budget adjustment policy as a method to better empower staff to accomplish City-wide priorities. Divisi� He.•//C,I/"J TrDiYecto/rr^ cL- Date O--1 istrative Services Director Date 02-0 Date Cross Reference New Item: Yes No Prev Ord/Res #: Orig Contract Date: Orig Contract Number: H:\BUDGE7\Divisionw os & Letters\Budget & Research\budget adjustment policy amendment agenda request.wpd Idem 1 FAYETTEVIPLLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • TO: Mayor Coody and City Council THROUGH: Ted H. Webber, Administrative Services Directo FROM: Stephen Davis, Budget Manage REFERENCE: Budget Adjustment Policy Revision DATE- August 12, 2002 I Statement of Problem Community Development Division needs to move more than $20,000 from one program to another program for a different purpose than originally appropriated. Discussion Community Development Division has submitted a change in program to Housing & Urban Development (HUD) that moves federal funding from the Project for Victims of Family Violence to housing rehabilitation activities. HUD has approved the change in spending purpose. During 2002, HUD regulations changed to require grantee organizations such as the City of Fayetteville to have no more than 1.5 times the annual grant amount remaining on the HUD letter of credit. HUD has informed the City that while we are currently in compliance with the spending regulations, we (the City) need to continue drawingmoney down so that on the next test date (November 4) our letter of credit remaining balance is below the threshold of 1.5 times the annual grant amount. If the City is above the threshold we could face future penalties in the form of reduced federal funding for HUD funded activities. HUD notified the City of the new requirements in May, 2002. The City's Administrative Procedure to Amend the Budget has five levels of authority stipulated: Authority Level A — the Budget Manager is authorized to add up to $2,500 to any program or project, Authority Level B — the Administrative Services Director is authorized to add up to $15,000 to any program or project, Authority Level C — the Mayor is authorized to add up to $20,000 to any program or project, Authority Level D — City Council is authorized to amend the budget, Authority Level E — the authority level is administrative and the adjustment must meet one of several tests. Authority Level E tests are described below. The City's approved Administrative Procedure to Amend the Budget Authority Level E authorizes Staff to add more than $20,000 to a program when: 1) the additional expense is directly linked to revenues that increase, 2) the funding that is moved is for the same purpose as originally authorized by City Council or 3) the additional expense budget is part of a routine pay/fringe benefit adjustment for which City Council had previously authorized a salary contingency. All other budget adjustments that accumulate to $20,000 or more per program must be approved by City Council. The original budget authorization and subsequent budget amendments are Financial records of the City and as such are routinely audited by the City's independent auditor. The auditor looks for compliance with the City Council approved budget adjustment policy and compliance with state budgetary laws. To further illustrate the application of the "E" level budget adjustments described above three examples are provided: Example 1: Soccer Fee revenue above the budgeted amount is received and additional soccer participant registration expenses are incurred. Example 2: During 2002, City Administration reorganized the Building Safety Division and created a new division called Community Code Enforcement. Three employees were transferred from Building Safety Division to the new division. The budget was amended to reflect the new division. In excess of $119,000 was moved from Building Safety to Community Code Enforcement. This change in appropriation was viewed as Administrative because the new division preformed the same services as originally appropriated and there was no impact to fund balance. Example 3: During 2002, the Fire Department responded to the NIOSH report and implemented several changes. One of the results of the changes made was an increase in the total expenditure for Overtime. Money was moved from other accounts within the Fire Operations Program to fund the increased overtime. The increased overtime cost is in excess of $177,000. Requested Action City Council amend the Administrative Procedure to Amend the Budget to empower the Department Directors and Staff to better respond to changing issues in a morp timely manner. The proposed amendment would be in the "E" category and is as follows: In addition to the above, the Mayor is authorized to approve budget amendments that reallocate existing funding within a department and within a fund where the additional or changed appropriation is necessary to either comply with a change in use of the funding or in response to an unforeseen event. This change in authorization does not authorize the moving of appropriated funding between departments or funds without City Council approval or a previously authorized budget amendment in compliance with authority levels A through C. H:\BUDGE71Division Memos & Letters\Budget & Research\B_A Policy Revision 2002.doc • • CITY OF FAYETTEVILLE, ARKANSAS ADMINISTRATIVE PROCEDURES TO ADJUST THE APPROVED BUDGET Amended Policy PURPOSE: The procedures outlined in this section define, standardize, and set forth responsibilities for budget adjustments. DEFINITION AND EXPLANATION: A budget adjustment is a change in the authorized budget, either revenue or expense. A budget adjustment increases one expenditure item or capital project by a specific dollar amount and decreases the budget for one expenditure item or capital. project. An expenditure item or capital project can also be offset by a revenue increase or use of fund balance. Since a budget adjustment is a change in allocated funds, great care must be taken and only changes for good reason will be accepted. All Department Directors and Division Heads are mandated to stay within each operational program budget as adopted and to stay within the total budget for each capital project. Neither the Accounting or Purchasing Offices will process payments or purchase orders, which will cause a program or capital project to be over the annual budget amount. Each operational division is grouped into programs (i.e. Engineering - Administration, Engineering - Plans & Specifications, Engineering - Right -of -Way, etc.). Budget adjustments will be required in the following instances: 1) When the budgeted amount per operational program is exceeded (an offsetting adjustment must be made from another operational program or fund balance). 2) When the budgeted amount for a capital project is exceeded (an offsetting adjustment must be made from another capital project, another program, or fund balance). Any changes in the personnel services category must meet the City's policy for raises, promotions, and staff increases. TYPES OF BUDGET ADJUSTMENTS There are basically five (5) types of budget adjustments. These are: A. Adjustments between operational programs, between capital projects, or to an operational program, up to $2,500, may be approved by the responsible Department Director and the Budget Manager; B. Adjustments between operational programs, between capital projects, or to an operational program, for $2,501 to $15,000 may be approved by the Administrative Services Director; • • C. Adjustments between operational programs, between capital projects, or to an operational program, up to.$20.000 may be approved by the Mayor; D. Adjustments which exceed the Mayor's authority, may be approved by City Council or the appropriate governing body of the funding source; Example: The Advertising & Promotion Commission approves all expenditure activity within the Advertising & Promotion Fund. E. Administrative budget adjustments may be approved by the Mayor. Administrative budget adjustments generally do not have any impact on fund balance. Administrative budget adjustments are generally required because of additional revenue received in one fund. In addition to the above. the Mayor is authonzed to approve budget amendments that reallocate existing funding within a department and within a fund where the additional or changed appropnation is necessary to either comply with a change in use of the funding or in response to an unforeseen event. This change in authonzation does not authorize the moving of appropriated funding between departments or funds without City Council approval or a previously authonzed budget amendment in compliance with authonty levels A through C. Example- HMR taxes received by the Advertising and Promotion (A&P) Fund are required, by debt instrument, to be transferred to the Continuing Education Center (CEC) Fund. HMR tax revenue in excess of budget will create an over budget for the transfer category in the A&P Fund. Adjustments to a capital project or operational program are considered to be cumulative on an annual basis. Therefore, a single adjustment may meet the criteria for one type of adjustment, but fall into another type due to prior adjustments to the same operational program or capital project. The Budget Manager shall have the authority to make the final determination as to which type of adjustment is necessary. Significant adjustments to an operational program's total budget must be justified by modifying program objectives and performance measures. These items must be submitted with the budget adjustment and approved simultaneously. RESPONSIBILITIES AND PROCEDURES It is the responsibility of each Department Director or Division Head to prepare his/her adjustment whenever required, obtain all the required signatures, and return the form to the Budget Manager. Following review by the Budget Manager, the adjustment is either processed through the Budget & Research Office or returned to the Division Head requesting the adjustment for placement on a City Council agenda. It is the responsibility of the Mayor to present the adjustments to the City Council and advise them of any consequences. H:\BUDGEf\Division Memos & LettersiBudget & Research\Proposed Amendment - Administrative Procedures to Adjust the Budget.wpd • CITY OF FAYETTEVILLE, ARKANSAS ADMINISTRATIVE PROCEDURES TO ADJUST THE APPROVED BUDGET Current Policy PURPOSE: The procedures outlined in this section define, standardize, and set forth responsibilities for budget adjustments. DEFINITION AND EXPLANATION: A budget adjustment is a change in the authorized budget, either revenue or expense. A budget adjustment increases one expenditure item or capital project by a specific dollar amount and decreases the budget for one expenditure item or capital project. An expenditure item or capital project can also be offset by a revenue increase or use of fund balance. Since a budget adjustment is a change in allocated funds, great care must be taken and only changes for good reason will be accepted. All Department Directors and Division Heads are mandated to stay within each operational program budget as adopted and to stay within the total budget for each capital project. Neither the Accounting or Purchasing Offices will process payments or purchase orders, which will cause a program or capital project to be over the annual budget amount. Each operational division is grouped into programs (i.e. Engineering - Administration, Engineering - Plans & Specifications, Engineering - Right -of -Way, etc.). Budget adjustments will be required in the following instances: 1) When the budgeted amount per operational program is exceeded (an offsetting adjustment must be made from another operational program or fund balance). 2) When the budgeted amount for a capital project is exceeded (an offsetting adjustment must be made from another capital project, another program, or fund balance). Any changes in the personnel services category must meet the City's policy for raises, promotions, and staff increases. 1 • • • TYPES OF BUDGET ADJUSTMENTS There are basically five (5) types of budget adjustments. These are: A. Adjustments between operational programs, between capital projects, or to an operational program, up to $2,500, may be approved by the responsible Department Director and the Budget Manager; B. Adjustments between operational programs, between capital projects, or to an operational program, for $2,501 to $15,000 may be approved by the Administrative Services Director; C. Adjustments between operational programs, between capital projects, or to an operational program, up to $20.000 may be approved by the Mayor; D. Adjustments which exceed the Mayor's authority, may be approved by City Council or the appropriate governing body of the funding source; Example: The Advertising & Promotion Commission approves all expenditure activity within the Advertising & Promotion Fund. E. Administrative budget adjustments may be approved by the Mayor Administrative budget adjustments generally do not have any impact on fund balance. Administrative budget adjustments are generally required because of additional revenue received in one fund. Example: HMR taxes received by the Advertising and Promotion (A&P) Fund are required, by debt instrument, to be transferred to the Continuing Education Center (CEC) Fund. HMR tax revenue in excess of budget will create an over budget for the transfer category in the A&P Fund. Adjustments to a capital project or operational program are considered to be cumulative on an annual basis. Therefore, a single adjustment may meet the criteria for one type of adjustment, but fall into another type due to prior adjustments to the same operational program or capital project. The Budget Manager shall have the authority to make the final determination as to which type of adjustment is necessary. Significant adjustments to an operational program's total budget must be justified by modifying program objectives and performance measures. These items must be submitted with the budget adjustment and approved simultaneously. RESPONSIBILITIES AND PROCEDURES It is the responsibility of each Department Director or Division Head to prepare his/her adjustment whenever required, obtain all the required signatures, and return the form to the Budget Manager. Following review by the Budget Manager, the adjustment is either processed through the Budget & Research Office or returned to the Division Head requesting the adjustment for placement on a City Council agenda. It is the responsibility of the Mayor to present the adjustments to the City Council and advise them of any consequences. • FAYETTEMLLE THE CRY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • TO: Mayor Coody and City Council THROUGH: Hugh Eamest, Urban Development Director FROM: Yolanda Fields, CCE Director REFERENCE: Budget Adjustment DATE: August 14, 2002 Issue Approval of a budget adjustment and budget adjustment policy for the Community Development Division Discussion Community Development Division has submitted a change in program budget to Housing & Urban Development (HUD) that moves federal funding from the Project for Victims of Family Violence to housing rehabilitation activities. HUD has approved the change in spending purpose. During 2002, HUD regulations changed to require grantee organizations such as the City of Fayetteville to have no more than 1 5 times the annual grant amount remaining on the HUD letter of credit. HUD has informed the City that while we are currently in compliance with the spending regulations, we (the City) need to continue drawing money down so that on the next test date (November 4) our letter of credit remaining balance is below the threshold of 1.5 times the annual grant amount. If the City is above the threshold the City of Fayetteville could face future penalties in the form of reduced federal funding for HUD funded activities. HUD notified the City of the new requirements in May, 2002. The City's Administrative Procedure to Amend the Budget has five levels of authority stipulated: Authority Level A — the Budget Manager is authorized to add up to $2,500 to any program or project, Authonty Level B — the Administrative Services Director is authorized to add up to $15,000 to any program or project, Authority Level C — the Mayor is authorized to add up to $20,000 to any program or project, Authority Level D — City Council is authorized to amend the budget, Authority Level E — the authority level is alminis' atrve and the adjustment must meet one of several tests. Authority Level E tests are described below. The City's approved Administrative Procedure to Amend the Budget Authority Level E authorizes Staff to add more than $20,000 to a program when: I) the additional expense is directly linked to revenues that increase, or 2) the funding that is moved is for the same purpose as originally authonzed by City Council or 3) the additional expense budget is part of a routine • • pay/fringe benefit adjustment for which City Council had previously authorized a salary contingency All other budget adjustments that accumulate to $20,000 or more per program must be approved by City Council. The original budget authorization and subsequent budget amendments are financial records of the City and as such are routinely audited by the City's independent auditor. The auditor looks for compliance with the City Council approved budget adjustment policy and compliance with state budgetary laws. Requested Action City Council amend the Administrative Procedure to Amend the Budget for CDBG programs to empower the Department Director, Division Director and Staff to better respond to changing issues in a more timely manner. The proposed amendment would be in the "E" category and is as follows: In addition to the above, the Budget office is authorized to process budget amendments that reallocate existing funding within the CDBG programs where the additional or changed appropriation is necessary to either comply with a change in use of the funding or in response to an unforeseen event. All related HUD requirements must be met. • • • pay/fringe benefit adjustment for which City Council had previously authorized a salary contingency All other budget adjustments that accumulate to $20,000 or more per program must be approved by City Council. The original budget authorization and subsequent budget amendments are financial records of the City and as such are routinely audited by the City's independent auditor. The auditor looks for compliance with the City Council approved budget adjustment policy and compliance with state budgetary laws. Requested Action City Council amend the Administrative Procedure to Amend the Budget for CDBG programs to empower the Department Director, Division Director and Staff to better respond to changing issues in a more timely manner. The proposed amendment would be in the "E" category and is as follows: In addition to the above, the Budget office is authorized to process budget amendments that reallocate existing funding within a federal grant program where the additional or changed appropriation is necessary to either comply with a change in use of the funding or in response to an unforeseen event. All related federal grant program requirements must be met. 1 • • STAFF REVIEW FORM AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW For the Fayetteville City Council meeting of y/.3 FROM: Yolanda Fields Name Community Code Enforcement Urban Development Division Department ACTION REQUIRED: Approval of a budget adjustment and budget adjustment policy for the Community Development Section. COST TO CITY: None Cost of this Request Account Number Category/Project Category/Project Name Housing Rehab Funds Used To Date Program Name Comm. Dev. Project Number Remaining Balance Fund 0.. B''GET Budgeted Item Budget Adjustment Attached Badge Manager Administrative Services Director CONTRACT/GRANT/LEASE REVIEW: GRANTING AGENCY: ,9 WEL `/Accounting Ma City .ttorney Purchasing Officer fJ AZ Date r In Q.0 ernal/AUSitor DC t. ate ADA Coordinator 31/5(05— Date Date Date Grants Coordinator Date STAFF fo th I i 7 'D is�•OHea• 1, , Ai f •irector TION: Approval of a budget adjustment and budget adjustment policy ommunit Development Section. ... 11 . F.4 r s�/.40 Adm s rati Ser ices Director e g�ao�ov /Dane CZ-- Da iDa e 1 Cross Reference New Item: Yes Prey Ord/Res #: Orig Contract Date: e D • • FAYETTEVILLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Yolanda Fields, Community Code Enforcement/Urban Development From: Heather Woodruff, City Clerk Date: September 6, 2002 Please find attached a copy of Resolution No. 133-02. The original will be microfilmed and filed with the City Clerk. I am forwarding the Budget Adjustment Form to the Budget & Research Division. cc: Nancy Smith, Internal Audit Stephen Davis, Budget & Research 010 03 Update • Document Reference RES City q'licayetteville "Rex Maintenance Item Action Date Ref. Taken Brief Description 9032002 133 9/09/2002 13:53:42 COMMUNITY CODE ENFORCEMENT DIVISION Enter Keywords • File Reference # security Class Expiration Date Date for Cont/Referred: Name Referred to • • RES. 133-02 BUDGET ADJUSTMENT COMMUNITY CODE ENFORCEMENT REALLOCATING $250 000 00 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG FUNDS HOUSING REHABILITATION SERVICE CBDG TARGET AREA MICROFILM cmdl-Return Cmd8-Retention CmdS-Abstract Yes No Retention Type: _ **** Active **** Cmd4-Delete Cmd3-End Press 'ENTER' to Continue (c) 1986-1992 Munimetrix Systems Corp.