Fiscal Note
The adopted 2012 Operating Budget includes $400,000 for prior year encumbrances. Since actual encumbrances at the end of 2011 totaled $246,766, the difference of $153,234 could be used to increase the Contingent Reserve. The 2012 adopted budget included a $1.2 million contingent reserve. This resolution would increase the total Contingent Reserve to $1.353 million. Expenditures from the contingent reserve associated with previously approved and pending resolutions will reduce that balance to $1.27 million. There is no impact on the tax levy or State Expenditure Restraint Program eligibility limits.
Title
Allocating funds appropriated in the 2012 Operating Budget for prior year encumbrances to match actual carry forward encumbrances in various departmental accounts and increasing the Contingent Reserve by $153,234.
Body
PREAMBLE
In governmental accounting terminology, encumbrances are outstanding purchase orders and other contractual commitments for expenditures that have been incurred but not yet paid. Any encumbrances that remain open at the end of the budget year must be paid and charged to expense in the subsequent year. Governmental accounting rules require that such expenses be charged against the adopted budget when prior-year encumbrances are paid.
The City of Madison currently includes a $400,000 appropriation for prior-year encumbrances as part of the annually adopted budget. By including an appropriation for the estimated amount of prior-year encumbrances in the adopted budget, the need for an additional appropriation at a later date is substantially reduced. Any difference between the estimated and actual carry forward encumbrances can be appropriated from, or returned to, the Contingent Reserve.
For fiscal years 2010 and 2011, actual prior-year encumbrances were more than the $400,000 budgeted, and the Contingent Reserve balance was decreased by $56,209 and $53,302 respectively for those years.
WHEREAS, the 2012 Adopted Budget includes an appropriation for estimated Prior-Year Encumbrances of $400,000 and actual carry forward encumbrances at the end of 2011 totaled only $246,766;
NOW, THEREFORE, BE IT RESOLVED, that $246,766 be allocated from Prior-Year Encumbrances in the 2012 Adopted Budget to the following departmental budgets to fund expenditures for actual encumbrances carried forward:
$29,248 Fire (supplies and purchased services)
$12,955 Engineering (timekeeping system)
$67,822 Parks (equipment)
$4,496 Streets (purchased services)
$111,531 Planning Division (neighborhood & art grants)
$14,914 Assessor (office furniture)
$5,800 Emerging Neighborhoods (uncompleted contract)
$246,766 TOTAL
BE IT FURTHER RESOLVED, that the remaining $153,234 budget for Prior-Year Encumbrances be reallocated to increase the available 2012 Contingent Reserve.