Fiscal Note
The proposed resolution amends the 2024 adopted operating budget in order to make technical adjustments within various agency budgets. The amounts proposed in the midyear appropriation are based on actual expenditures through May of 2024. The resolution appropriates $545,000 from the General Fund unassigned balance for a projected deficit in the Information Technology budget and $35,593 in Library fund balance for carry forward encumbrances. The December 31, 2023, General Fund unassigned balance was $82.6 million, which is 20.4 percent of the 2024 General Fund budget (city policy goal is to have a general fund balance of at least 15 percent of the subsequent year budget). The December 31, 2023, unassigned Library fund balance was $2.5 million, which is 12.2 percent of the Library budget (the goal is 5.0 percent).
In addition, the resolution increases budget authority from non-City sources for various agencies, authorizes intra-agency transfers within various agency budgets, amends the 2024 adopted capital budget to make technical adjustments of funding across projects and comply with arbitrage requirements under federal tax law.
Carryforward Encumbrances
The 2024 adopted operating budget includes $400,000 for encumbrances associated with contracts that span multiple years, which is centrally budgeted in Direct Appropriations. The total amount carried forward from 2023 for the General Fund is $244,909. The resolution transfers centrally budgeted funds to agency budgets for carry forward encumbrances.
The total amount carried forward from 2023 for Library totals $35,593. The resolution transfers budget from the Library’s fund balance for carry forward encumbrances.
The total amount carried forward from 2023 for Public Health totals $997,268. The resolution transfers budget from Public Health’s fund balance for carry forward encumbrances.
Appropriation from General Fund - Fund Balance
Information Technology (IT) is projecting a deficit in purchased services. Software maintenance costs are projected to be over budget $230,000 due to updated annual pricing under State of Wisconsin contracts, increased usage by employees to meet the needs of the City, and an increase in contract pricing by the Microsoft 365 vendor that occurred after the budget was approved.
IT’s consulting budget is projected to be over budget $315,000 for a Human Resources Information System consultant contract approved in 2023. The 2023 year-end appropriation amended Human Resources’ (HR) 2023 adopted budget to accommodate the contract; however, the contract was not executed until the beginning of 2024, and was not included in the carryforward encumbrances. Information Technology encumbered the funds in January 2024 so HR could execute the contract.
The resolution transfers $545,000 from the General Fund unassigned balance to purchased services in the IT operating budget to cover the deficits.
Under state law, there is no Expenditure Restraint Incentive Program (ERIP) limit in 2024, so the net increase of $545,000 in General Fund appropriations will not affect the City’s eligibility to qualify for a state ERP payment in 2024. However, the limit is reinstated for the 2025 budget. As such, the final amended amount appropriated for the 2024 budget will serve as the base for calculating the limit for the 2025 budget. The 2024 adopted operating budget is about $5.5 million below the base amount necessary to ensure that the cost-to-continue budget for 2025 is eligible for a $7 million payment under the ERIP. The appropriation from fund balance in this resolution will help with increasing the 2024 base for ERIP purposes. The 2024 year-end appropriation resolution will make further changes to ensure eligibility for an ERIP payment.
Agency Revenue Adjustments
The resolution increases various agency revenues and expenditures for a net neutral impact.
General Fund:
• Community Development: Adds $500 in revenue and purchased services for Dairy Drive to correct the revenue budget from Dane County.
• Police: Adds $100,000 in Special Duty revenue and salaries (overtime) to reflect increased events and an increase in the Special Duty rates.
• Traffic Engineering: Adds $16,000 in agency revenues and supplies for a grant awarded to purchase crossing guard stop paddles.
Other Funds:
• Grant Fund - Police: Increases federal revenue and overtime expense by $25,000 for the Internet Crimes Against Children grant based on available funding from the Wisconsin Department of Justice.
• Golf Enterprise: Increases greens fees and inventory by $50,000 for increased concessions.
• Landfill: Increases reserves applied and transfer out to capital by $200,000 to purchase generators.
• Parking: Increases parking fee revenue and transfer out to debt by $368,000 to support a 2024 debt service payment for the State Street Campus Garage project.
Intra-Agency Transfers
The resolution seeks to authorize $776,475 in transfers across major expenditure categories within General Fund agency budgets and $200,000 in transfers across major expenditure categories within the Fleet budget to cover projected deficits. These transfers are net neutral across the 2024 adopted budget.
Community Development Loan Fund
The resolution seeks to transfer $49,000 in program revenue and purchased services from the Community Development Program Income sub-fund to the Community Development Town of Madison sub-fund for higher-than-expected Town of Madison loan repayments and to reauthorize $2 million in federal Economic Development Initiative - Community Project Funding (EDI-CPF) revenues and supplies expenditures that were not included in the 2024 Common Council technical amendments for the permanent men’s shelter.
Capital Budget: Various Projects
The proposed resolution amends the adopted 2024 capital budget by appropriating non-general obligation funding sources and related expenditures, authorizing various transfers between agencies and major projects, authorizing transfers of non-general obligation funding sources, and removes excess funding. The proposed changes reflect current 2024 scope and schedule adjustments.
Capital Budget: Arbitrage
In advance of the City’s annual general obligation debt sale each fall, agencies are asked to review all capital projects to ascertain the amount of borrowing proceeds needed. Through this exercise, agencies identified projects that will not spend down their full authorized budget within time frames required for arbitrage compliance under federal tax law. As a result, technical transfers are requested to transfer funding across multiple projects. The transfers do not impact the total authorized budget for any capital project or program.
Title
BY TITLE ONLY: Mid Year Appropriation Resolution Amending the 2024 Adopted Operating Budget to transfer funds within agency budgets based on projected spending through the 2nd Quarter of 2024, appropriate $545,000 from the General Fund unassigned balance, $32,593 from the Library unassigned balance, and amend the 2024 capital budget to transfer funds across projects and update funding sources
Body
WHEREAS, multiple General Fund agencies have incurred $244,909 in expenses from carryforward encumbrances for contracts and services that span multiple years; and,
WHEREAS, the 2024 adopted operating budget includes $400,000 within Direct Appropriations, a centrally budgeted location, that is intended to be transferred to agency budgets to cover carryforward agency encumbrances once the total costs are known; and
WHEREAS, the Library has carryforward encumbrances of $32,593 and has sufficient fund balance is available to cover this expense; and
WHEREAS, Public Health has carryforward encumbrances of $997,268 and has sufficient fund balance to cover this expense; and
WHEREAS, Information Technology (IT) is projecting a deficit of $230,000 in purchased services due to updated annual software pricing under State of Wisconsin contracts, increased usage by employees to meet the needs of the City, and an increase in contract pricing by the Microsoft 365 vendor that occurred after the budget was approved; and
WHEREAS, IT is projecting an additional deficit in purchased services of $315,000 for a Human Resources Information System consultant contract that was approved in 2023 but not executed until the beginning of 2024; and
WHEREAS, the General Fund unassigned balance is available to cover the increased expenses; and,
WHEREAS, various agencies are requesting an increase in budget authority to pay for expenses that are supported by non-City revenue sources; and
WHEREAS, various city agencies require intra-agency transfers to their budget to cover projected deficits in major expenditure categories based on the mid-year budget projection; and
WHEREAS, the Community Development Loan Fund requires a transfer of $49,000 in program revenue and purchased services from the Community Development Program Income sub-fund to the Community Development Town of Madison sub-fund for higher-than-expected Town of Madison loan repayments; and
WHEREAS, the Community Development Loan Fund requires an increase of $2 million in federal Economic Development Initiative - Community Project Funding (EDI-CPF) revenues and supplies that were excluded from 2024 Common Council technical amendment for the permanent men’s shelter and needs to be reauthorized; and
WHEREAS, the Engineering - Bicycle and Pedestrian Cannonball Path Phase 6 capital project requires a transfer of $123,000 from GO Borrowing to other municipal sources to reflect funding received from Fitchburg; and,
WHEREAS, the Engineering Division and the Transportation Department request a transfer of $250,000 in GO Borrowing and related expenses from the Engineering - Major Streets Interstate 94 Interchange Study project to the Transportation Interstate 94 Interchanges project; and,
WHEREAS, Monona Terrace requests an appropriation of $334,987 for rebates received associated with the purchase of a chiller; and,
WHEREAS, the Sewer Utility and the Parking Division request a transfer of $926,000 in TID 50 authority and related expenses from the Parking State Street Campus Garage project to the Sewer Lake Street Sanitary Sewer project; and,
WHEREAS, the Sewer Utility requests changes to the Sewer Reconstruction program to cancel $89,000 in excess TID 50 authority, increase TID 52 authority by $678,000, increase special assessment authority by $223,000, and make net neutral transfers between TID sources, special assessments, reserves, and revenue bonds, and;
WHEREAS, the Stormwater Utility requests an increase of $140,292 in revenue received from outside parties and related expenses in the Stormwater Quality System Improvements program; and,
WHEREAS, Traffic Engineering requests an appropriation of $980,400 for federal revenue received through the 2024 Redistribution Carbon Reduction Program in support of traffic signal work; and,
WHEREAS, Water Utility requests net-neutral transfers of existing budget authority across various major capital projects and programs to reflect current 2024 scope and schedule adjustments and an increase of $150,000 in reserve funding for Bus Rapid Transit; and,
WHEREAS, several capital projects have not fully spent down their authorized borrowing proceeds within two years and transfers of funding across programs are needed for compliance with arbitrage rules under federal tax law.
NOW THEREFORE BE IT RESOLVED, the Common Council amends the 2024 adopted operating budget by transferring $244,909 from Direct Appropriations and $32,593 from Library unassigned balance to the following agency budgets for encumbrances that were carried forward from 2023:
• Common Council: $19
• Community Development: $15,191
• Economic Development: $4,945
• Employee Assistance Program: $756
• Finance: $13,001
• Fire: $50,925
• Human Resources: $7,460
• Library: $32,593
• Parks: $8,223
• PCED: $10,334
• Planning: $66,500
• Police: $7,884
• Streets: $8,900
• Traffic Engineering: $29,629
• Transportation: $21,142
• Direct Appropriations: ($244,909)
• Library Unassigned Balance: ($32,593)
BE IT FURTHER RESOLVED, the Common Council amends the 2024 adopted operating budget by transferring $977,268 from Public Health unassigned balance for carryforward encumbrances within that agency; and,
BE IT FURTHER RESOLVED, the Common Council amends the 2024 adopted operating budget by transferring $545,000 from General Fund unassigned balance to Information Technology purchased services; and,
BE IT FURTHER RESOLVED, the Common Council amends the 2024 adopted operating budget to increase budget authority to pay for expenses that are supported by non-City revenue sources:
General Fund
• Community Development: $500 in Dane County funding and purchased services
• Police: $100,000 in Special Duty revenue and salaries
• Traffic Engineering: $16,000 grant revenue and supplies
Other Funds
• Grant Fund - Police: $25,000 in grant revenue and salaries
• Golf Enterprise Fund: $50,000 in fee revenue and supplies
• Restricted Fund - Landfill: $200,000 in reserves applied and transfers out to capital
• Parking Fund - $368,000 in parking fees and transfers out to debt
BE IT FURTHER RESOLVED, the Common Council amends the 2024 adopted operating budget to authorize the following transfers to expenditure categories within agencies:
General Fund
• Assessor: Transfer $10,750 from personnel to supplies for increased expenses for laptops ($4,500) and to purchased services for membership dues ($6,250)
• Clerk: Transfer $200,000 from salaries to benefits ($30,000), supplies ($150,000) and purchased services ($20,000) for benefits costs, one-time election supplies costs, and election equipment transportation costs within purchased services
• Civil Rights: Transfer $30,000 from personnel to purchased services to cover increased calls for interpretation and translation service
• Economic Development: Transfer $200,000 from personnel to purchased services to begin the Economic Development Strategy study
• Engineering: Transfer $130,000 from personnel to supplies ($100,000) and purchased services ($30,000) due to inflation in supplies costs and unbudgeted repairs
• Traffic Engineering: Transfer $105,725 from personnel to supplies ($4,000), purchased services ($100,000), and transfer out to the grant fund ($1,725) for electricity costs and as a match for grant funds included in the operating budget
• Information Technology: Transfer $100,000 from personnel to purchased services to cover overages in software maintenance costs due to increased pricing and usage
Other Funds
• Fleet Service: Transfer $200,000 from personnel to purchased services for vehicle repairs and maintenance
BE IT FURTHER RESOLVED, the Common Council amends the 2024 capital budget as follows:
Engineering - Bicycle and Pedestrian
• Appropriate municipal capital participation funding by $123,000 and decrease General Fund GO Borrowing by $123,000 in project #10153 - Cannonball Path - Phase 6
Engineering - Major Streets/ Transportation
• Transfer $250,000 in carryforward authority from Engineering - Major Streets project #11786 - Interstate 94 Interchange Study to Transportation project #14699 - Interstate 94 Interchanges
Monona Terrace
• Appropriate $334,987 in grant revenue and commensurate expenditure authority in project 10037 - Machinery and Other Equipment
Parking/ Sewer Utility
• Transfer $926,000 in TID 50 authority from Parking project #14145 - State Street Campus Garage to the Sewer Utility project #15045 - Lake Street Sanitary Sewer
Sewer Utility
• Remove excess TID 50 authority of $89,000 from project #15045 - Lake Street Sanitary Sewer
• Sewer Reconstruction program
¡ Change $300,000 in TID 52 authority to Special Assessments for minor project #14920 - 3400 Block E Washington Sewer Replacement
¡ Change $260,000 in reserves and $362,000 in revenue bonds to TID 52 authority for minor project #14921 - Commercial Avenue Sewer Crossing
¡ Change $45,000 in reserves and $442,000 in revenue bonds to Special Assessments for minor project #15332 - S Paterson Street Sewer Replacement
¡ Appropriate $678,000 in TID 52 authority and commensurate expenditure authority for minor project #14921- Commercial Avenue Sewer Crossing
¡ Appropriate $223,000 in Special Assessment authority and commensurate expenditure authority for minor project #15332 - S Paterson Street Sewer Replacement
Stormwater Utility
• Appropriate miscellaneous revenue and reduce GO Borrowing by $32,414 in project #12916 - Spring Harbor Dredging
• Appropriate $107,878 in expense reimbursement revenue and commensurate expenditure authority in project #12882 - Mendota Grassman Greenway
Traffic Engineering
• Appropriate $980,400 in federal revenue and commensurate expenditure authority in project 10427 - Traffic Signal Installation
Water Utility
• Transfer $150,000 in GO Borrowing and commensurate expenditure authority from project #14677 - Water Main Replacement 2024 to revenue bond authority in project #11168 - University Ave (Shorewood-Univ Bay)
• Appropriate $150,000 in reserves and commensurate expenditure authority for project #12777 - Bus Rapid Transit
• Transfer $250,000 in GO Borrowing and commensurate expenditure authority from project #14677 - Water Main Replacement 2024 to project #15102 - 2024 CIPP Water Main Rehabilitation
• Transfer $250,000 in revenue bonds and commensurate expenditure authority from project #11900 - Well 14 Mitigation to project #14029 - Pressure Zone 6E - Zone 6W Pressure Control Vault
• Transfer $150,000 in revenue bonds and commensurate expenditure authority from project #11900 - Well 14 Mitigation to project #14030 - Pressure Zone 6E - Zone 4 Pressure Control Vault
BE IT FINALLY RESOLVED, the Common Council amends the 2024 adopted capital budget to transfer funds across the following projects to comply with arbitrage rules under federal tax law, as detailed in the attachment to the resolution titled “Capital Project Transfers for File 84378.”