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TO: Mayor Richard C. Irvin, Mayor
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
Stacey L. Hamling, Assistant Finance Director
DATE: April 16, 2019
SUBJECT:
An Ordinance Amending the Annual Budget for the Fiscal Year Beginning January 1, 2018 and Ending December 31, 2018 (Amendment #2 for the 2018 Fiscal Year)
PURPOSE:
To obtain the City Council’s approval of a proposed amendment to the 2018 City Budget.
BACKGROUND:
Pursuant to 65 ILCS 5/8-2-9.1 through 9.10, the City of Aurora operates under the budget system of government finance. The City Council adopted the 2018 budget on December 12, 2017 through the passage of Ordinance No. O17-087.
While the city attempts to anticipate all potential expenditures for a fiscal year when that year’s budget is developed, circumstances occasionally arise that require expenditures that were not contemplated in the original financial plan. 65 ILCS 5/8-2-9.6 permits a municipality operating under the budget system to amend its annual budget by a two third’s vote of its governing body.
DISCUSSION:
The attached, proposed ordinance, including its Exhibit A, would provide for certain changes in the 2018 City Budget. Below is an explanation for each change. The item numbers discussed below correspond to the item numbers assigned to each change detailed in Exhibit A.
Items 1 and 11: Rivercity, TIF District #3 Fund (Offsetting Revenues and Expenditures Increases Totaling $3,856,500). These items adjust the budget for the refinancing of the 2008B TIF bonds. Refinancing bond issues is only done when interest rate markets are conducive to savings to the City for the refinancing. As such refinancing of bonds is not usually contemplated in an originally adopted budget
Items 2 and 13: East River Area, TIF District #6 Fund (Offsetting Revenues and Expenditures Increases Totaling $4,966,000). These items adjust the budget for the refinancing of the 2008A TIF bonds.
Items 3 and 15 through 16: Capital Improvement Fund (Offsetting Revenues and Expenditures Increases of $100,100). These items adjust the budget to account for a grant the city received for the installation of LED street lights.
Items 4 and 18: Transfer from Employee Health Insurance Fund to Property & Casualty Insurance Fund of $1,500,000. These items provide resources to the Property & Casualty Insurance Fund to cost the costs of general liability claims that were greater than expected. Specific major claims have been discussed with the City Council during 2018.
Items 5 and 8: Transfer from General Fund to Employee Compensated Benefits Fund of $1,000,000. These items provide resources to the Employee Compensated Benefits Fund to cover the accrued costs of severance and sick leave that were greater than expected. This transfer does not reduce the General Fund below the recommended minimum fund balance.
Items 6: Salaries / Prior Year Retro, Fire, General Fund (Expenditure Increase Totaling $203,000). This item provide resources for the payment of retroactive pay increases related to the settlement of collective bargaining agreements. This amount is less than 1% of the total annual salary for the two Fire bargaining units
Item 7: Salaries/Overtime/Sworn, Police, General Fund (Expenditure Increase of $870,000). This item is for the additional cost of overtime for Police Officers. This item serves to adjust the budget for overtime costs that were greater than expected during the year.
Item 9: Supplies Energy/Fuel, Equipment Services Fund (Expenditure Increase of $158,700). This item will cover the costs for fuel for city vehicles. The costs were higher than expected. These costs are charged back to the city’s operating departments.
Item 10: Supplies - Repairs/Maintenance - Equipment, Equipment Services Fund (Expenditure Increase of $109,200). This item will cover the costs of supplies used in maintaining the city’s vehicles that were higher than expected. These costs are charged back to the city’s operating departments.
Item 12: Rivercity, TIF District #3 Fund (Expenditure Increase of $99,000). This item provides for the payment of a redevelopment agreement. The developer qualified for reimbursement under Resolution No. R12-245. Adequate fund balance was available in the fund to cover the costs.
Item 14: Grant to Aurora Downtown, SSA #One Downtown Fund (Expenditure Increase of $45,000). This item is a correction to the 2018 budget. In 2018 the City Council approved additional funding that was not included in the budget.
Item 17: General Liability Claims, Property & Casualty Insurance Fund ($250,000). This item provides for the payment of costs associated with general liability claims incurred by the Fire Department that were greater than expected during the year. The Fund has sufficient fund balance to cover this expense.
Item 19: Final Pay, Employee Compensated Benefits Fund ($2,001,800). This item provides resources for the payment of severance pay during 2018 that was greater than anticipated. In addition to current fund balance in the Employee Compensated Benefits fund, the interfund transfers reflected in items 5 and 8 provided the resources needed to pay the additional costs.
If the proposed budget amendment is approved, budgeted expenditures in the 2018 budget will increase from $422,088,710 to $435,748,010. Of this total expense change, $11,422,600 is covered by offsetting revenues.
IMPACT STATEMENT:
N/A.
RECOMMENDATIONS:
That the City Council adopt the attached, proposed ordinance that would effect Amendment #2 to the 2018 City Budget.
cc: Robert J. O’Connor, Alderman
Theodoros C. Mesiacos, Alderman
Edward Bugg, Alderman
Richard B. Mervine, Alderman
Alex Alexandrou, Chief Management Officer
Richard Veenstra, Corporation Counsel
Wendy A. McCambridge, City Clerk
Kenneth D. Schroth, Director of Public Works/City Engineer
John Curley, Chief Development Services Officer
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance amending the annual budget for the fiscal year beginning January 1, 2018 and ending December 31, 2018 (Amendment #2 for the 2018 fiscal year)
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City Council approved Ordinance No. O99-96 on November 9, 1999 adopting the budget system of finance for the City in lieu of the appropriation system in accordance with 65 ILCS 5/8-2-9.1 et. seq. and Code Section 2-312(a); and
WHEREAS, the City Council approved Ordinance No. O17-078 on December 12, 2017 adopting an annual budget for the City of Aurora for the fiscal year beginning January 1, 2018 and ending December 31, 2018; and
WHEREAS, the City of Aurora deems that it is necessary to incur certain expenditures during its 2018 fiscal year that were unanticipated at the time the annual budget for 2018 was adopted but are necessary so as to ensure the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora, in an exercise of its home rule powers, desires to amend its annual budget for the fiscal year beginning January 1, 2018 and ending December 31, 2018 so as to provide for the incurrence of said expenditures that were unanticipated at the time the annual budget was adopted; and
WHEREAS, adequate monies are available in the City treasury to pay said unanticipated expenditures.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
SECTION 1: That the annual budget of the City of Aurora for the fiscal year beginning January 1, 2018 and ending December 31, 2018 is amended as shown in the attached Exhibit A.
SECTION 2: That this ordinance shall be in full force and effect, and shall be controlling upon its passage and approval.
SECTION 3: That all ordinances or parts of ordinances thereof in conflict herewith are hereby repealed to the extent of any such conflict.
SECTION 4: That any Section or provision of this ordinance that is construed to be invalid or void shall not affect the remaining Sections or provisions, which shall remain in full force and effect thereafter.