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Home My WebLink AboutResolution 4431, amending FY 13 budget for Fair Housing and MMIA Settlement Payments Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Kukulski, City Manager Anna Rosenberry, Administrative Services Director SUBJECT: Resolution No. 4431 - Amending Fiscal Year 2013 (FY13) General Fund Budget for Fair Housing and MMIA Settlement Payments. MEETING DATE: January 28, 2013 AGENDA ITEM TYPE: Action Item RECOMMENDATION: Resolution No. 4431 - Amending Fiscal Year 2013 (FY13) General Fund Budget for Fair Housing and MMIA Settlement Payments. SUGGESTED MOTION: Motion to approve Resolution No. 4431. BACKGROUND: Since the adoption of the FY2013 General Fund budget in late June, two items have arisen that require amendment of the appropriations budget. 1. Fair Housing Settlement - $150,000 2. MMIA Declaratory Action Settlement – $670,000 These amendments are necessary because they are significant amounts that were not specifically authorized in the original budget and, our method for funding the MMIA settlement payment potentially includes removing budget authority for three items that were originally approved but were ON HOLD until the settlement was final. We are not aware of any specific additional revenues that will offset the settlement expenditures; they will decrease our ending reserve balance in the General Fund. ______________________________________________________________________________ 1. On September 24, 2012 the Commission authorized the settlement of the lawsuit Fair Housing vs. City of Bozeman in the amount of $150,000. At the time of budget adoption, it was not anticipated that we would be settling the lawsuit and nothing was budgeted for this item. 2. On December 14, 2012, the Commission approved the settlement of the MMIA & GEM dispute (Montana Municipal Interlocal Authority and Government Entities Mutual, Inc. in Cause No. DA-120311 (First Judicial District Court.) During budget development and adoption for FY2013, the Commission reviewed and discussed financial plans in the event the City was required to pay the full $3 million judgment (see Commission Memo, June 11, 2012, “Fiscal Year 2013 (FY13) Budget Work Session– General Fund). On the attached 284 document (Settlement Option #3 – Revised) we have updated this previous financial information to illustrate how the approved $2 million settlement would affect the City’s current and future General Fund Reserves. Given current known circumstances, we can: • Remove the Budget Authority for PD Design Costs without impacting the current design contract. $250,000 Highly Recommend: • Funding the Lindley Park Restroom Replacement. $175,000 o This project is the refurbishment of a high-traffic park facility. Recommend that we spend the money and get underway with the project in FY13, releasing the budget hold on this project • Transfer Excess Money from the SID Revolving Fund, still leaving twice the statutory limit in the fund plus dollars for future anticipated SID projects. $613,000 Questions remain about: • Funding the Bogert Pool Maintenance/Design, $177,000 o This amount would not enable us to actually re-design the pool, and there are no immediate maintenance projects that could be completed for this amount. The attached resolution cuts this project from the FY13 budget. Staff is working on comprehensive recommendations on how to proceed with Bogert Pool in the FY14 budget UNRESOLVED ISSUES: Our plan for funding future settlement payments continues to rely on “FY13/FY14 Unspent Budget Authority and Revenues.” These amounts are not certain, are highly dependent on the methods used to develop the budgets, and won’t be known until roughly September 2013 and September 2014, respectively. ALTERNATIVES: Do not amend the budget at this time; or choose to fund/not fund the various elements described in this memo. The settlement payments have been made, as required. Amendment of the Approved Budget will provide staff with direction regarding the FY13 items that have been on hold, and the proposed transfer from the SID Revolving Fund. FISCAL EFFECTS: 1. The Settlement Amounts add to the authorized Appropriations and lower our estimated General Fund Reserve balance in FY13 by $820,000. 2. Cutting Budget Authority for the Police Department Design Costs and the Bogert Pool Maintenance/Design Project both lower authorized Appropriations and add to our estimated General Fund Reserve Balance by $427,000. 3. Transferring money from the SID Revolving Fund will increase estimated Revenues/Transfers in the General Fund and add to the estimated General Fund Reserve Balance in FY13 by $613,000. 4. Releasing the Budget Hold on the Lindley Park Restroom Project communicates to staff that the project should proceed – and has no change on the authorized appropriations. 285 The City’s estimated General Fund Reserve would remain above the minimum according to the described plan in FY13 (current year.) This amendment also seeks to adequately identify the reserve amounts that will be available in FY14 and FY15 for the remaining MMIA Settlement payments. However, it is noted that FY14 and FY15 reserve amounts will be highly dependent on the FY14 and FY15 Adopted General Fund budgets. Attachments: Resolution No. 4431 Settlement Option #3 – Revised 1 16 2013 Report compiled on: January 16, 2013 General Fund Reserve FY13 Budget FY14 Estimate FY15 Estimate Notes: Fiscal Year Ending Balance 5,578,416 6,501,416 6,327,294 From the FY13 Appropriation Resolution, plus FY12 Updated Ending Balance Amend: MMIA Settlement (667,000) (674,122) (672,660) Per Signed Settlement Amend: Fair Housing Settlement (150,000) FY13 Budget CUT - Capital - PD Design Costs 250,000 FY13 Budget CUT - Capital - Bogert Pool Maintenance/Design 177,000 FY13 Budget RELEASE - Capital - Lindley Park Restroom Replacement - SID Revolving Fund excess - TRANSFER 613,000 Would still leave 2x the statutory minimum in the fund, plus money for future road projects. FY13/14 Unspent Budget Authority and Revenues 700,000 500,000 Known each Sept following the Fiscal Year end. Adjusted Balance 6,501,416 6,327,294 5,654,634 Adopted Minimum 16.67%3,862,238 4,031,581 4,031,581 Difference for Adopted Budget Purposes 1,595,713 1,123,053 Indicates whether a Special Budget Hearing is likely needed to be needed 286 - 1 - COMMISSION RESOLUTION NO. 4431 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AMENDING FISCAL YEAR 2013 (FY13) GENERAL FUND BUDGET FOR FAIR HOUSING AND MONTANA MUNICIPAL INTERLOCAL AUTHORITY SETTLEMENT PAYMENTS. WHEREAS, the City Commission did, on the 25th day of June, 2012, after due and proper legal notice, conduct a public hearing on and adopt Resolution No. 4383 - APPROPRIATING FUNDS FOR VARIOUS BUDGET UNITS, AND FURTHER ESTIMATING REVENUE NECESSARY TO OPERATE AND MAINTAIN SERVICES OF MUNICIPAL GOVERNMENT FOR THE FISCAL YEAR ENDING JUNE 30, 2013; and WHEREAS, on September 24, 2012, the City Commission did authorize the settlement payment to Montana Fair Housing (Cause No. CV 09-90-BU-DLC); and WHEREAS, on December 12, 2012, the City Commission did authorize settlement payments to Montana Municipal Interlocal Authority and Government Entities Mutual, Inc (Cause No. DA- 120311); and WHEREAS, the City Commission did, on the 28th day of January, 2013, after due and proper legal notice, conduct a public hearing on the proposed budget amendments. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, to wit: Section 1 – Appropriation Additions The City Commission of the City of Bozeman, Montana, does hereby authorize additional expenditures for the Fiscal Year 2013 in the following funds and amounts: 287 - 2 - General Fund: Fair Housing Payment $150,000 FY13 MMIA Payment $670,000 GRAND TOTAL – Additional Appropriations $ 820,000 Section 2 – Appropriation Eliminations The City Commission of the City of Bozeman, Montana, does hereby remove authorization for expenditures for the Fiscal Year 2013 in the following funds and amounts: General Fund: Police & Court Design (partial decrease) $250,000 Bogert Pool Maintenance/ Design $177,000 GRAND TOTAL – Removed Appropriations $ 427,000 Section 3 – Revenues/Transfers The City Commission of the City of Bozeman, Montana does hereby estimate additional revenues/transfers for the various funds, as follows: General Fund: Transfer From SID Revolving Fund $613,000 GRAND TOTAL – Additional Revenues/Transfers $ 613,000 Section 4 Pursuant to Section 7-6-4030, M.C.A., this resolution, upon its passage, shall be in full force and effect on July 1, 2012. Section 5 That should it be found by any court of competent jurisdiction that any section, clause, portion, sentence, word, or phrase of this resolution is deemed to be contrary to any existing law or regulations, that in this instance, it is the intent of the City Commission of the City of Bozeman, Montana, that all other portions, sections, words, clauses, phrases, or paragraphs of this document shall remain in full force and effect. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 28th day of January, 2013. ________________________________________ SEAN BECKER Mayor 288 - 3 - ATTEST: _____________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ________________________________________ GREG SULLIVAN City Attorney 289 Settlement Option #3 ‐ Revised for Commission Comments and Updated Financial InformationGeneral Fund Reserve FY13 Budget FY14 Estimate FY15 EstimateNotes:Fiscal Year Ending Balance 5,578,416 6,501,416 6,327,294 From the FY13 Appropriation Resolution, plus FY12 Updated Ending BalanceAmend: MMIA Settlement (667,000) (674,122) (672,660) Per Signed SettlementAmend: Fair Housing Settlement (150,000) FY13 Budget CUT ‐ Capital ‐ PD Design Costs 250,000 FY13 Budget CUT ‐ Capital ‐ Bogert Pool Maintenance/Design 177,000 FY13 Budget RELEASE ‐ Capital ‐ Lindley Park Restroom Replacement‐ SID Revolving Fund excess ‐ TRANSFER 613,000 Would still leave 2x the statutory minimum in the fund, plus money for future road projects.FY13/14 Unspent Budget Authority and Revenues 700,000 500,000 Known each Sept following the Fiscal Year end.Adjusted Balance 6,501,416 6,327,294 5,654,634 Adopted Minimum 16.67% 3,862,238 4,031,581 4,031,581 Difference for Adopted Budget Purposes 1,595,713 1,123,053 Indicates whether a Special Budget Hearing is likely needed to be needed290