Subject
title
Introduction and Possible Adoption of an Ordinance to amend Ordinance No. 09-24 to appropriate funds and levy taxes for FY 2025 (Budget Amendment #2)
end
Department
Finance
Recommendation
In accordance with the City Charter, since the budget ordinance is adopted at the fund level, a change in the appropriated amount of any fund requires action by the Mayor and Council. The vehicle for such action is an amendment to the budget ordinance. The proposed ordinance, Attachment A, would amend the FY 2025 budget. The FY 2025 budget was adopted by the Mayor and Council on May 6, 2024, and amended on August 5, 2025.
If the Mayor and Council wish to proceed with adoption of the ordinance at the same meeting, the ordinance should first be introduced and then a motion should be made to waive the layover period. If the motion to waive the layover period is approved by an affirmative vote of six or more members of the Mayor and Council, a motion to adopt the ordinance may then proceed.
Discussion
The proposed ordinance, Attachment A, would amend the FY 2025 budget. This amendment recognizes the items that are described in this agenda report and detailed on Attachment B. Attachment C is the 4Q FY 2024 Financial Report.
4Q FY 2024 Financial Report (Attachment C)
As shown on page 1 of the attached 4Q FY 2024 Financial Report (Attachment C), the FY 2024 unaudited ending unassigned fund balance equals $31.2 million, well above the FY 2025 target of $21.8 million. This figure factors in the commitments included on the FY 2025 budget ordinance, which were added to the FY 2025 budget with the approval of the August 5, 2024 budget amendment. This budget amendment recommends the use of an additional $710,000 of this balance to support employee leave buyback and the Asphalt Repair & Replacement (TA21) CIP. Staff may recommend further programming of this balance to support CIP needs on a later FY 2025 amendment.
Amendment Detail (Attachment B)
Purchase Orders that Carried Over from FY 2024: Each year the City re-appropriates funds to cover purchase orders that were outstanding at the close of the prior fiscal year. These purchase orders were issued before the end of the fiscal year, but the goods or services were not delivered until after the beginning of the new fiscal year. At year end, these funds are assigned for appropriation and are reflected as an adjustment to the next year's budget. A summary by fund of the FY 2024 purchase order amounts that carried over into FY 2025 is shown under the Fiscal Impact section of this agenda item. The total amount of purchase orders that carried over for all funds equals $5.2 million, but only $4.6 million shows as additional expenses due to the offset with the addition to reserves in several funds (see footnotes in TABLE 1).
Operating Budget:
• Employee Leave Buyback ($350,000 increase General Fund expenditures; $419,000 increase all funds expenditures total): This program, which allows employees to “buy back” up to five days of earned annual leave, was not funded in the FY 2024 adopted budget; however, this amendment recommends funding the program using available reserves.
• Capital Improvements Program (CIP) Transfer ($360,000 increase General Fund expenditures): Additional funding is needed for the city’s Asphalt Repair & Replacement (TA21) project as explained in the CIP section below. This amendment recommends funding this increase with available reserves.
• Increase ADA Coordinator from 0.5 FTE to 1.0 FTE (no change): The ADA Coordinator position was created as a 0.5 FTE position; however, the workload, expectations, and needs of internal and external stakeholders proved unsustainable with the position being part-time. Staff recommends converting this currently vacant position to a full-time 1.0 FTE to provide sufficient hours and capacity to complete the work and support the JEDI Office. No additional funding is required for FY 2025 as the increase will be offset by vacancy savings.
• Camera Supplies and Equipment ($5,000 increase Cable TV Equipment Special Activities Fund expenditures): This funding is needed to cover additional supplies needed for the cable studio and production areas beyond what the current appropriations can cover. This funding is covered by restricted cable grant revenue and can only be used for Cable TV-related spending.
• Community Development Block Grant (CDBG) Roll ($75,000 increase CDBG Fund revenue and expenditures): At the end of FY 2024, $75,000 of the city’s CDBG Year 49 grant award was unobligated, and requires reappropriation in FY 2025 in order to execute the remainder of the grant funds.
• Lead and Copper Survey Incentive ($20,000 increase Water Fund expenses): This funding covers a program to provide a $30 credit to customers that successfully complete a survey providing confirmation of the water service line pipe material that enters their house. This is the second step in the city’s process to determine if there are any lead or galvanized service lines that will need to be replaced.
• Sewer Line Rapid Assessment Tool (SL-RAT) Replacement ($26,730 increase Sewer Fund revenue and expenses): The city received insurance claim reimbursement for damage done to a city-owned piece of equipment by an outside party. This reimbursement will be used to replace this vital piece of equipment, which helps to identify blockages in city sewer lines.
• Refuse Vehicle Replacement Cost Increase ($145,400 increase Refuse Fund expenses): The FY 2025 budget included a total of $844,560 to replace three refuse vehicles. Quotes received in early October indicate that the price of these vehicles will total $145,400 more than the adopted budget.
Capital Improvements Program (CIP) Budget:
• Asphalt Repair & Replacement (TA21, $360,000 increase Capital Projects Fund expenditures): This funding covers the cost of multiple emergency asphalt repairs earlier in 2024 related to winter weather conditions and water main breaks. This increase, funded with available reserves, will allow all scheduled repairs to continue as planned without deferrals.
• David Scull Park Improvements (RA19, $250,000 increase Capital Projects Fund revenue and expenditures): The city received State bond bill funding, which will allow for the inclusion of project amenities selected by the community engaged during the design portion of this project.
• RedGate Park Master Plan Implementation (RE23, $181,720 increase Capital Projects Fund revenue and expenditures): The city received a grant from the Chesapeake Bay Trust Urban Tree Program for additional reforestation at RedGate Park. This is the second year the city has received this grant.
Mayor and Council History
This is the second budget amendment for FY 2025. The FY 2025 budget was adopted by the Mayor and Council on May 6, 2024, and amended on August 5, 2025.
Fiscal Impact
The following operating fund(s) will be adjusted if this budget amendment is adopted.
TABLE 1
|
Operating Fund |
Amended Budget |
FY24 Purchase Orders |
10/28/2024 Amendment |
Amended Budget |
|
General Fund |
$111,839,660 |
$3,752,227 |
$710,000 |
$116,301,887 |
|
Water Fund |
$15,874,360 |
$409,523 |
$40,000 |
$16,323,883 |
|
Sewer Fund* |
$15,546,630 |
$226,296 |
$39,730 |
$15,812,656 |
|
Refuse Fund |
$8,939,900 |
$ - |
$165,400 |
$9,105,300 |
|
Parking Fund |
$2,791,920 |
$ - |
$ - |
$2,791,920 |
|
Stormwater Mgt Fund** |
$7,319,350 |
$ - |
$ - |
$7,319,350 |
|
Special Act. Fund*** |
$2,838,210 |
$ - |
$ - |
$2,838,210 |
|
CDBG Fund**** |
$263,000 |
$188,000 |
$75,000 |
$526,000 |
|
Speed Camera Fund |
$1,307,520 |
$ - |
$1,000 |
$1,308,520 |
|
Debt Service Fund |
$4,455,600 |
$ - |
$ - |
$4,455,600 |
|
Total |
$171,176,150 |
$4,576,046 |
$1,031,130 |
$176,783,326 |
* FY 2024 purchase orders were added to the FY 2025 budget totaling $574,386 for the Sewer Fund, but this amount was partially offset by the “add. to reserves” line, resulting in a net change to the fund in the amount shown in the table above.
** FY 2024 purchase orders were added to the FY 2025 budget totaling $144,734 for the Stormwater Management Fund, but this full amount was offset by a reduction in the fund’s “add. to reserves” line.
*** FY 2024 purchase orders were added to the FY 2025 budget totaling $118,784 for the Special Activities Fund, but this full amount was offset by a reduction in the fund’s “add. to reserves” line.
****CDBG purchase orders are funded by CDBG grant revenue.
The following Capital Improvements Program (CIP) fund(s) will be adjusted if this budget amendment is adopted:
TABLE 2
|
CIP Fund |
Amended Budget |
10/28/2024 Amendment |
Amended Budget |
|
Capital Projects Fund |
$64,352,967 |
$791,720 |
$65,144,687 |
|
Water Fund |
$22,094,904 |
$ - |
$22,094,904 |
|
Sewer Fund |
$12,132,725 |
$ - |
$12,132,725 |
|
Refuse Fund |
$741,022 |
$ - |
$741,022 |
|
Stormwater Mgt Fund |
$18,567,082 |
$ - |
$18,567,082 |
|
Special Activities Fund |
$1,509,109 |
$ - |
$1,509,109 |
|
Speed Camera Fund |
$1,178,470 |
$ - |
$1,178,470 |
|
Total |
$120,576,279 |
$791,720 |
$121,367,999 |