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Budget Discussion
City of DeBary SealCity Council Meeting
City of DeBary
AGENDA ITEM





Subject:  Budget Discussion
  
From:  City Manager/Finance Director
             
Meeting/Hearing Date:  January 17, 2018

Attachments:
(   )  Ordinance
(   )  Resolution
( x)  Other
(   )  Supporting Documents/Contracts


REQUEST
City Manager is requesting the Mayor and City Council to review year end closing budget information and decide what additional items, if any, should be added to the FY 18 Budget.

PURPOSE
This request is to follow through on a previous consensus of the Council to review FY 17 year end closing budget information that would assist the Council in determining if it desires to add additional items to the FY 18 Budget that were previously deleted from budget request for FY 18.
This report will focus on the General Fund.   A full report on the financial performance of all funds will be made in March by the City’s auditors.

FINDINGS
  • Hurricanes are estimated to cost the City $ 1,864,000 as follows:
FY 17

$    761,000
Solid Waste Fund
$    262,000
FY 18
$ 1,103,000
General Fund
$ 1,602,000
$ 1,864,000
$ 1,864,000

  • Had hurricanes not been a factor, the FY 17 General Fund Budget would have closed with an approximate $562,000 positive cash flow as opposed to a negative ($75,000) cash flow.
  • Had hurricanes not been a factor, the FY 18 Carry Forward Budget Amendment “1” for the General Fund would have been an approximate $189,000 additional expenses in the alternative to $1,154,000 in additional expenses.
  • Had hurricanes not been a factor, reserves in the FY 18 First Budget Amendment would be an approximate $5,984,000 in the alternative to an approximate $5,019,000 as follows:
With
Hurricane
Impact
Without
Hurricane
Impact

Mandatory Reserve

$  3,386,000

$  4,186,000

Discretionary Reserve

$  1,633,000

$  1,798,000


$  5,019,000

$  5,984,000

  • Had hurricanes not been a factor, the mandatory reserve period would have remained at 150 days in the alternative to the revised 120 days.  It is important to understand that a 120-day general fund reserve is a very strong reserve and that the City’s financial position remains very strong provided that we are not impacted by additional large scale storms in the near term.
  • Reimbursements from the State and Federal Governments are estimated to be somewhere between $932,000 and $1,398,000 and completed sometime in 2019.
  • Items of high priority for consideration for adding back to the budget would cost $140,000 as follows:
Tag Readers
$  70,000

Recreation Truck Replacement
$  45,000

Mobility Plan
$  25,000

$ 140,000

CONCLUSION
  • Due to the combined cost impacts of hurricanes Matthew and Irma, for which we have not as yet received any FEMA reimbursements, the City did not experience the anticipated cash flow hoped for that could have funded the additional $140,000 high priority items requested in the FY 18 Budget without utilizing Reserves.
  • Although storm impacts are substantial in FY 17 and 18, the City’s financial position remains very strong.
  • A series of additional hurricanes at these cost levels, however, could seriously challenge the financial health of the City.
RECOMMENDATION
  • Due to the relatively small $140,000 cost of the additional General Fund items, I am recommending that the City Council give serious consideration to funding these items from Reserves for the following reasons:
Tag Readers
High priority of Sheriff’s Department

Recreation Vehicle
Continuing high maintenance cost.

Mobility Plan
Could substantially reduce transportation concurrency cost and help expedite high quality growth.

  • The City should consider establishing a storm fund with an annual appropriation to maintain a critical balance during its FY 19 strategic budget discussions.
  • In preparation of the FY 19 budget, the City Council needs to seriously consider closing the negative operating cash flow in the General Fund to reduce reliance on reserves.


City Council Action:
(   )  Approved As Recommended
(   )  Approved With Modification
(   )  Disapproved
(   )  Continued Date:

(   )  Other

Modifications:



 
 
City of DeBary, FL
16 Colomba Rd, DeBary, FL 32713
Phone: (386) 668-2040  Fax: (386) 668-4122