The URL can be used to link to this page

Home My WebLink AboutR-2001-125 RESOLUTION NO. 2001-125 A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA, AMENDING ITS GENERAL FUND BUDGET FOR FISCAL YEAR 2000-2001, BY REDUCING CERTAIN REVENUE ESTIMATES AND BY BORROWING $750,000 DOLLARS FROM THE WATER FUND AND $750,000 FROM THE SEWER FUND, PROVIDING THAT ALL RESOLUTIONS OR PARTS OF RESOLUTIONS IN CONFLICT HEREWITH BE REPEALED TO THE EXTENT OF SUCH CONFLICT; AND PROVIDING FOR AN EFFECTIVE DATE WHEREAS, the budget of estimated revenues and appropriations for expenditures for the fiscal year 2000-2001 has been approved by the City Commission of the City of Dania Beach, Florida; and WHEREAS, based upon actual receipts through the end of June, the City desires to adjust certain revenue estimates to reflect more realistic revenue projections; and WHEREAS, in order to account for the reduction in those certain revenue estimates, the it is necessary for the General Fund to borrow $750,000 from the Water Fund and $750,000 from the Sewer Fund to be repaid with interest at 5% over a five year period; and WHEREAS, certain changes to said fiscal year budget of appropriations for expenditures are now necessary. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA: is 1 RESOLUTION NO.2001-125 Section 1. That the General Fund Budget for the fiscal year 2000-2001 be and the same is hereby amended, deleted and otherwise changed as set forth in attachment "A" to this Resolution, which is hereby made a part of this resolution: Section 2. That all resolutions or parts of resolutions in conflict herewith be replealed to the extent of such conflict. Section 3. That this resolution shall be in force and effect immediately upon its passage and adoption. PASSED AND ADOPTED THIS 24T" day of July, 2001. PATRICIA FLUKY MAYOR — COMMISSIONER ATT ST: ROLL CALL: COMMISSIONER BERTINO - YES COMMISSIONER MCELYEA - YES CHARLENE JOqjSON COMMISSIONER MIKES - ABSENT ACTING CITY CLERK VICE-MAYOR CHUNN - YES MAYOR FLURY - YES APPROVED AS TO FORM AND CORRECTNESS: BY: THOM YANSBRO CITY ATTORNEY • 2 RESOLUTION NO.2001-125 Attachment"A" iBudget . Revised Budget Account Revenue 2001 Reductions Estimates 001-30-3130-31-310 Franchise Fee Electricity 1,200,000 (200,000) 1,000,000 001-30-3130-31-350 Franchise Fee Cable TV 120,000 (50,000) 70,000 001-30-3140-31-410 Electricity 1,925,000 (350,000) 1,575,000 001-30-3210-32-100 Occupational Licenses 500,000 (100,000) 400,000 001-30-3290-32-909 Cost Recovery Fee 200,000 (75,000) 125,000 001-30-3420-34-240 Fire/EMS Non AV Assessmeni 1,711,700 (100,000) 1,611,700 001-30-3420-34-245 County Fire/EMS Services 350,000 (350,000) 0 001-30-3420-34-260 EMS Transport Fees 450,000 (50,000) 400,000 001-30-3430-34-340 Garbage& Penalty 930,000 (75,000) 855,000 001-30-3610-36-110 General Fund Interest 300,000 (150,000) 150,000 tbd by Finance Dept. Loan from Water Fund 0 750,000 tbd by Finance Dept. Loan from Sewer Fund 0 750,000 Total of Listed Revenue Estimates 7,686,700 7,686,700 • W-S Loan Attachment A.xls 7/17/01 CITY OF DANIA BEACH DEPARTMENT OF FINANCE MEMORANDUM TO: Jason Nunemaker Memo: DF-01-011 Acting City Manager FROM: David E. Keller, CGFM ��/ Director of Finance DATE: July 19, 2001 SUBJECT: Proposed Loan from Water and Sewer Funds to the General Fund Issue The issue is the proposed loan from the Water and Sewer Funds to the General Fund. • Explanation During the preparation of the City Manager's Proposed FY 02 Operating Budget, one of the steps the Finance Department has undertaken is the analysis of cashflow in the City. Cashflow projections deal directly with the cash available to the City, and the timing of actual receipt of revenues and expense of authorized appropriation. Cashflow projections are a separate and distinct but necessary analysis, and reveal the availability of cash for investment and use purposes. A budget may be balanced between revenues and expenditures, but the timing of the receipt of those revenues and the making of those expenditures also have significant implications for financial management. By way of an example, suppose that the City's budget had even expenditures of $100,000 each month, for a total budget of $1.2 million (twelve months times $100,000 per month). Let us also suppose that the budget is balanced by projected revenues of $1 .2 million. However, a cashflow analysis might reveal that the City gets only $200,000 in the first six months, and then the rest of the $1 million in the last six months. Clearly, even though the budget is balanced, the City will run out of available cash during the first six months, when expenditures will total $600 thousand, and revenues are only $200,000. This is a simple example, and assumes that there are no previously existing reserves or fund balance, etc., but I am giving the example to differentiate the balanced budget from cashflow requirements. 1ADKeller\My Documents\Memos\01-011.doc The cashflow analysis for the General Fund of the City of Dania Beach indicates that the majority of the City's revenue is received during the first six months of the fiscal year. Expenditures, on the other hand, are more evenly spread out between the twelve months. If the City received the revenues that were budgeted for, it should be in a healthier cashflow position, and make it through the fiscal year without cashflow problems. However, in both of the last full fiscal years (FY 99 and FY 00), the City spent approximately significantly more than it received in revenues in the General Fund: $2.185 million in FY 00 and $548 thousand in FY 99. This means that the revenues coming in to the City were not sufficient to cover the operating costs of the City. The City had a millage rate set at 6.1000 mills in each of those years; however, taking the use of reserves into consideration, the real operating experience of the City would have been 6.7652 in FY 98 and 8.5917 during last fiscal year. The reason this was not a cashflow problem for the City in either of the last two years is that the City had and used fund balance, or reserves, to account for the annual $2 million structural deficit. In the current fiscal year, however, the City is facing once again a shortfall of revenues as compared with expenditures. The primary cause for this shortfall is an over estimation of several budgeted revenue sources. The difference this year is that there are no reserves in the General Fund left to be able to compensate for the difference. At the present time, the City has approximately $1 million in an ® investment that is coming due at the beginning of September, and will be available for the City to use. The cashflow analysis indicates that the City revenues during the final three months of the fiscal year (July, August, and September) are approximately $3 million. This, plus the $1 million the City had in its investment, gives the City approximately $4 million available for operating purposes for the remainder of the year. The City spends approximately $5.4 million during the last three months of the fiscal year. There is a projected shortfall of approximately $1.4-$1 .5 million for the remainder of the current fiscal year. In order to have sufficient resources to make it through the end of this fiscal year and also have sufficient resources to enter the beginning of the next fiscal year, I am proposing that a loan to the General Fund be made of $750,000 from the Water Fund and $750,000 from the Sewer Fund. Both of these funds have sufficient reserves to be able to make such a loan. I am proposing that the loan should be repaid at 5% interest over a five year period, which would result in annual payments totaling approximately $382,000 from the General Fund over the next five years. This amount has been appropriated in the City Manager's Proposed FY 02 Operating Budget. I am also proposing that the transfer should be made effective upon approval by the City Commission, which should allow the previously referenced investment, which • is scheduled to come due on September 1", to come to maturity. IADKe11er\My Documents\Memos\O1-011.doc Recommendation Please place the resolution for the loan of $1.5 million to the General Fund from the Water and Sewer Funds on the agenda for the City Commission meeting of July 24, 2001. 1.\DKeller\My Documents\Memos\01-01 l.doc