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TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
DATE: April 18, 2018
SUBJECT:
An Ordinance Amending the Annual Budget for the Fiscal Year Beginning January 1, 2017 and Ending December 31, 2017 (Amendment #1 for the 2017 Fiscal Year)
PURPOSE:
To obtain the City Council’s approval of a proposed amendment to the 2017 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 2017 budget on December 13, 2016 through the passage of Ordinance No. O16-088.
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 2017 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 16 through 23: HOME Program (Offsetting Revenues and Expenditures Increases Totaling $410,400). These items adjust the budget for the actual annual HOME Program allocation to the city. At the time the 2017 budget was prepared we did not have final allocation information. The amounts included in the original 2017 budget reflected only estimated of the allocation.
Items 2 and 24 through 29: Block Grant Fund (Offsetting Revenues and Expenditures Increases Totaling $836,500). These items adjust the budget for the actual annual CDBG Program allocation to the city. At the time the 2017 budget was prepared we did not have final allocation information. The amounts included in the original 2017 budget reflected only estimated of the allocation.
Items 3 and 30: Section 108 Loan Fund (Offsetting Revenue and Expenditure Increase of $3,000,000). These items provided the section 108 loan funding for the Art Centre project.
Items 4 and 34: Capital Improvement Fund (Offsetting Revenue and Expenditure Increase of $450,000). These items adjust the budget to account for a grant the city received for installation of LED street lights.
Items 5 and 12: Transfer from General Fund to Property &Casualty Insurance Fund of $1,500,000. These items provide resources to the Property &Casualty Insurance Fund to cover the costs of general liability claims that were greater than expected.
Items 6 and 13: Transfer from General Fund to Employee Compensated Benefits Fund of $150,000. 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.
Items 7 and 37: Transfer from Employee Health Insurance Fund to Employee Compensated Benefits Fund of $2,500,000. 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.
Items 8 through 10: Salaries & Supplemental Compensation, Mayor’s Office, General Fund (Expenditure Increase Totaling $49,000). These items provide resources for costs associated with vacation buy back and year-end payouts that were higher than expected.
Item 11: Employee Benefits/ FICA/Social Security, Planning & Zoning, General Fund (Expenditure Decrease of $350,000). This item constitute a correction to the budget.
Item 14: Refuse Disposal Charges, Sanitation Fund (Expenditure Increase of $23,900). This item services to provide resources for the payment of refuse disposal charges that were higher than expected.
Item 15: Legal - Outside Attorneys, Hotel-Motel Tax Fund (Expenditure Increase of $600). This item adjusts the budget for legal fees associated with monitoring compliance with an economic development agreement.
Item 31: River City, TIF District #3 Fund (Expenditure Increase of $328,500). This item provides for the payment of 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 32: East River Area, TIF District #6 Fund (Expenditure Increase of $19,600). This item provides for the payment of design costs associated with the pedestrian bridge. Adequate fund balance was available in the fund to cover the costs.
Item 33: Bank Service Fees, SSA #34 Oswego Fund (Expenditure Increase of $200). This item adjusts the budget for bank service fees.
Item 35: Debt Service Fund, Series 2017 General Obligation Fund (Expenditure Increase of $286,700). This item adjusts the budget for the first interest payment associated with the 2017 General Obligation Bond issue.
Item 36: General Liability Claims, Property & Casualty Insurance Fund ($529,500). 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. In addition to some money on hand in the Property and Casualty Insurance Fund, the interfund transfer reflected in items 7 and 12 provided the resources needed to pay additional costs.
Item 17: Final Pay, Employee Compensated Benefits Fund ($883,700). This item provides resources for the payment of severance pay during 2017 that was greater than anticipated. In addition to some money on hand in the Employee Compensated Benefits fund, the interfund transfers reflected in items 6,7,13 and 37 provided the resources needed to pay the additional costs.
If the proposed budget amendment is approved, budgeted expenditures in the 2017 budget will increase from $418,956,285 to $429,574,885.
IMPACT STATEMENT:
N/A
RECOMMENDATIONS:
That the City Council adopt the attached, proposed ordinance that would affect Amendment #1 to the 2017 City Budget.
cc: Alderman O’Connor, Chairman
Alderman Mesiacos
Alderman Bugg
Alderman Mervine, Alternate
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, 2017 and Ending December 31, 2017 (Amendment #1 for the 2017 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. O16-088 on December 13, 2016 adopting an annual budget for the City of Aurora for the fiscal year beginning January 1, 2017 and ending December 31, 2017; and
WHEREAS, the City of Aurora deems that it is necessary to incur certain expenditures during its 2017 fiscal year that were unanticipated at the time the annual budget for 2017 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, 2017 and ending December 31, 2017 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, 2017 and ending December 31, 2017 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.