LEGISLATIVE ACTION ITEM
SPONSOR: Grover C. Robinson, IV, Mayor
SUBJECT:
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SUPPLEMENTAL BUDGET RESOLUTION NO. 2020-53 - FINAL AMENDMENT TO THE FISCAL YEAR 2020 BUDGET
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RECOMMENDATION:
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That City Council adopt Supplemental Budget Resolution No. 2020-53.
A RESOLUTION AUTHORIZING AND MAKING REVISIONS AND APPROPRIATIONS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2020; PROVIDING FOR AN EFFECTIVE DATE.
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HEARING REQUIRED: No Hearing Required
SUMMARY:
In order to maintain a balanced budget, supplemental budget resolutions need to be approved by City Council during the course of a fiscal year. In September 2020, City Council adopted Supplemental Budget Resolution No. 2019-39 amending the Fiscal Year 2020 Budget. However, at that time, the final revenues and expenditures were unknown. According to Florida Statute 166.241, the governing body of a municipality may, within up to 60 days following the end of the fiscal year, amend a budget for that year. The attached resolution includes final budget adjustments for Fiscal Year 2020 that require Council action.
General Fund related budget adjustments include increases and decreases in estimated revenue from various sources, which results in a net increase in estimated revenue of $147,079, despite the downturn anticipated from the COVID-19 pandemic.
The decrease in Other Grants and Aids within the Saenger Theatre is due to the lower than estimated revenues from the Saenger Facility Fee due to the COVID-19 pandemic. The transfer to the Stormwater Capital Projects Fund was decreased as a result of decreased revenues within the Stormwater Utility Fund. The transfers to the three Tax Increment Financing Districts have been adjusted based on the final valuation received from the Escambia County Property Appraiser.
Revenues within the Tree Planting Trust Fund, Park Purchases Fund, and the Housing Initiatives Fund have been adjusted in accordance with actual revenues received and will be offset with Fund Balance. These “Funds” are all included in the General Fund. However, they are budgeted and reflected as separate funds from a budget standpoint to provide transparency for each of these accounts.
The transfer from the Local Option Gasoline Tax Fund to the LOGT Debt Service Fund has been decreased and is offset by a combination of increased Interest Income, a reduction in the amount transferred to the LOGT Debt Service Fund, and an increase in appropriated Fund Balance.
Adjustments have been made to various revenue accounts within the three CRA Funds based on the actual amounts received.
Within the Stormwater Utility Fee Fund revenues have been adjusted based on actual revenues received and are offset with a reduction in Operating Expenses. The main reduction is the State Right of Way Maintenance. The City of Pensacola maintains various State Roads as part of an agreement with the State of Florida. One of the areas of maintenance is the General Daniel “Chappie” James Bridge (Three Mile Bridge). With the ongoing construction of the bridge, coupled with the damage caused by Hurricane Sally, the Bridge is no longer being maintained by the City, thus a reduction in revenue from the State.
Revenues within the Hospital Special Assessment Fund have been reduced based on actual revenues received and are offset with a reduction in Grants and Aids.
Net revenue of $1,753,451 has been reduced within the Section 8 Housing Assistance Fund based on a reduction in Federal Funding and are offset with a decrease in Operating Expenses.
Net revenue of $8,413 has been appropriated within the Law Enforcement Trust Fund based on receipts and will be placed into Fund Balance.
Revenue in the Natural Disaster Fund has been appropriated to address the Federal and State Funding resulting from the COVID-19 pandemic and Hurricane Sally. The additional amount appropriated in Operating Expenses will provide funding for the estimated expenses from these two events.
Revenues within the Golf Fund were greater than anticipated. The Golf Course was not required to shut down during the COVID-19 pandemic, thus increased play resulted as the ability to be socially distant was made possible at the Golf Course. The additional revenue will be placed into Fund Balance.
The revenues within the Inspection Services Fund have been more than anticipated and will be placed into Fund Balance.
The COVID-19 pandemic's impact had a drastic effect on the Recreation Fund, the Roger Scott Tennis Center Fund, and the Community Maritime Services Fund. Revenues in these three funds have decreased due to the cancellation of many activities and events. Additionally, to help businesses cope with the economic impacts of COVID-19, the City offered a commercial rent/lease deferral program to qualified lessees through June 30, 2020. Under the program, businesses were allowed to apply for deferrals on rent payments due in April, May, and June. Deferred payments are required to be paid in equal installments over a 12 month period or over the months remaining on the existing lease, whichever is the lesser period, commencing July 1, 2020, along with the rent/lease payment, which is also due on those dates. The Gulf Coast Tennis Group applied for and received approval for the deferral. Due to accounting guidelines, only 60 days of revenue can be accrued. Therefore the remaining $18,229 will be received during Fiscal Year 2021. At the end of Fiscal Year 2020 the City received a notice from the Emerald Coast Utilities Authority (ECUA) regarding the Community Maritime Park that, based on the average metered water consumption, the City would be assessed impact fees totaling $140,104.51 for the 12 month period from April 10, 2019 through April 8 2020. Staff noticed an increase in the monthly bills beginning in May 2019 and began the task of identifying any leaks, however none was found. Upon discussing with staff at ECUA it was discovered that at the time the monthly bills increased was when a new meter was installed. Therefore, there is a possibility that the meter may have different settings than the prior one, meaning the City may not have to pay this fee. However, since it is unknown at this time what the outcome of the investigation will be, $145,000 has been held in abeyance until a resolution is made. The reduction in revenues has been offset through a combination of decreased expenses and increases in appropriated Fund Balance.
Revenues from Interest Income were more than anticipated in the CRA Debt Service Fund. In total additional revenue in the amount of $86,680 will be placed into Debt Service Reserves (Fund Balance). Additionally, Principal Reserve will be reduced by $534,900 and will also be placed into Fund Balance.
Interest Income was less than anticipated in the LOGT Debt Service Fund. Additionally, due to the decline in LOGT revenue, a reduction of $17,972 has been made from the Transfer in from the Local Option Gasoline Tax Fund. The decrease will be offset with a reduction in Interest Expense as well as drawing from Debt Service Reserves (Fund Balance).
Local Option Sales Tax is projected to generate revenue less than the current estimated revenue by $698,991 due to the COVID-19 pandemic. This will be offset with an increase in Interest Income, Miscellaneous Revenue, and appropriated Fund Balance. The Local Option Sales Tax Plan is an eleven-year plan that will end on December 31, 2028. It is anticipated that once the COVID-19 pandemic has subsided, Sales Tax revenues should pick back up and, over the life of the LOST IV Series, should be at the estimated revenue amount.
Interest Income in the CRA Series 2017 and 2019 Project Funds has been recognized and has been offset with an increase in Capital Outlay.
Interest Income in the LOST Series 2017 Project Fund was greater than anticipated and has been offset with an increase in Reserves for Contingency.
Net estimated revenues within the Stormwater Capital Projects fund were increased for Interest Income and offset with a decrease in the Transfer In From the General Fund. Appropriations have been increased in Stormwater Vaults City-Wide to offset the increased revenue.
Within the Gas Utility Fund revenues have been adjusted based on actual amounts received and will be offset with a decrease in various line item accounts.
Revenues in both the Sanitation Fund and the Port Fund have been adjusted based on actual amounts received and will be placed into Fund Balance.
Revenues within the Airport Fund were less than anticipated due to the COVID-19 pandemic and have been adjusted based on actual revenues received. The net decrease will be offset with a decrease in various line item accounts.
In December 2019, the City of Pensacola experienced a ransomware attack that penetrated the City’s network and illegally obtained some data located on the City’s network. The City hired the firm Deloitte & Touche LLP as a cyber-consultant to analyze the breach and help determine if any personal data was obtained. In an effort to protect the City’s active customers, vendors, and employees/retirees, the City contracted with LifeLock, a Symantec company, to make available at no cost to them for one year of its LifeLock Defender Choice. The costs associated with the consultant, the LifeLock memberships, and costs associated with advertising the incident resulted in the need to appropriate an additional $308,000 in the Insurance Retention Fund.
Prior to the City changing from the Council/City Manager form of government to Council/Mayor form of government, the Civil Service employees had an Employees Executive Committee comprised of non-collective bargaining employees from the various departments who would be the voice to the City Manager in various matters. As part of that membership, the employees could contribute a one-time payment or a bi-weekly payment to the Employee’s Executive Committee to be used for legal representation when various personnel-related issues arose. However, the Employee’s Executive Committee disbanded after the change in the form of government, and the funds in that bank account have remained unspent. The remaining member of the Employee’s Executive Committee agreed to donate the funds to the City of Pensacola to be used for employee morale recognition activities. Within the Insurance Retention Fund, $60,107 has been recognized as revenue from that donation and is offset with an increase in operating expenses.
Within the Central Garage, a shift of balances remaining in Capital Outlay from the completed capital projects has been made to cover additional operating costs associated with the Central Garage.
Estimated revenues within the Special Assessments Fund have been decreased based on Fiscal Year 2020 actual revenues and are offset with a reduction in appropriations.
PRIOR ACTION:
September 18, 2019 - City Council formally adopted a beginning FY 2020 Budget on Budget Resolution No. 2019-50.
November 14, 2019 - City Council approved Supplemental Budget Resolution No. 2019-61, covering purchase orders payable.
December 12, 2019 - City Council approved Supplemental Budget Resolution No. 2019-70, covering unencumbered carryovers.
September 10, 2020 - City Council approved Supplemental Budget Resolution No. 2020-39, amending the FY 2020 Budget.
FUNDING:
N/A
FINANCIAL IMPACT:
All appropriations of City funds in the supplemental budget resolution are covered by fund balances, shifts in expenses, or changes in revenues. Approval of the supplemental budget resolution provides for a balanced budget for Fiscal Year 2020.
CITY ATTORNEY REVIEW: Yes
10/30/2020
STAFF CONTACT:
Keith Wilkins, City Administrator
Amy Lovoy, Finance Director
ATTACHMENTS:
1) Supplemental Budget Resolution No. 2020-53
2) Supplemental Budget Explanation No. 2020-53
PRESENTATION: No end