To: Honorable Mayor and Members of Town Council
From: Trish Muller, Finance Director
Title
Ordinance Approving the First Amendment to the 2020 Budget by Making Supplemental Appropriations for 2020 and Authorizing Changes for Year 2020 and Providing for its Emergency Adoption on First and Final Reading
Body
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Introduction
The charter for the Town of Castle Rock allows for amendments to budget appropriations. Supplemental appropriations require approval by ordinance (Section 9.10) while capital appropriations can be carried forward without approval by ordinance in order to complete ongoing projects (Section 9.15). Capital projects are fully budgeted at the time the contract is signed. Although fully budgeted, actual expenditures vary depending on the timing of work on the project, at times spanning multiple years. Since projects often cross multiple years, capital budget appropriations get carried forward until projects are complete. Each year the Finance Department prepares budget amendments for Town Council review and approval, plus capital carry forward for informational purposes. The number of budget amendments varies by year depending on needs/opportunities that are identified throughout the year. A summary of budget amendments approved by Town Council from 2016 - 2019 is shown below.
Executive Summary
The changes of appropriation in this proposed First Amendment to the 2020 Budget include items to be considered for supplemental appropriation and carryforward of unspent capital appropriations from the 2019 Amended Budget. Attachments B and C describe these changes:
- Attachment B includes supplemental appropriation items and non-capital encumbered obligations for 2019
- Attachment C includes all encumbered and unencumbered capital project amounts as identified by departments
The table below summarizes changes in appropriations in this First Amendment to the 2020 Budget and the capital and operating expenditure budget increases. Note that total revenue adjustments of $2,272,651 are also included in this budget amendment.
Of the total budget requests, only a request to reallocate personnel budget from the Water Fund to the Water Resources Fund is recurring and is incorporated in future financial plans. However, this request results in a net zero impact to Castle Rock Water. All other items contained within this proposed budget amendment are intended for one-time projects or purchases and are planned as one-time uses of available fund balances. Some items are needed to more precisely appropriate funds as the result of more complete project estimates and the finalization of project scope.
This budget amendment is presented for emergency adoption on first and final reading due to the inclusion of funding to assist local businesses related to the COVID-19 crisis. Staff believes it is in the best interest of the public that this amendment be requested on emergency adoption.
Discussion
Total necessary changes to appropriations referred to in Attachment B net to an increase in total expenditures for 2020 of $14,118,583. Significant supplemental appropriation needs include the following items:
Within the Town Manager’s Office, supplemental appropriation of funds is requested in the amount of $300,000 in the Economic Development Fund and $300,000 in the General Fund to fund small business assistance programs as a result of the COVID-19 crisis. These funds will be a utilization of reserves in each fund. In addition, $186,801 is needed in the Economic Development Fund for ongoing Town project management costs related to the Encore Redevelopment Agreement, and $1,437,598 is requested in the Economic Development Fund to utilize unspent funds in 2019 and additional revenue received above what was previously estimated. These funds will be used for current and future economic assistance agreements.
The Town Manager’s Office is also requesting supplemental appropriation of funds from the General Long-term Planning Fund to continue ongoing computer software and hardware purchases in the amount of $70,113, and an additional $28,304 for remediation work at Town Hall and the old Facilities building. The projects were budgeted in 2019, and will commence in 2020.
Ongoing public safety supplemental needs include $22,067 in the Fire Department for the station alerting upgrades project that was budgeted and contracted in 2019, and an additional $26,645 in the Police Department for weapons purchases that were ordered in 2019, but will not be received until 2020.
The Finance Department requests supplemental appropriation of funds within the Downtown Development Authority Tax Increment Financing (DDA TIF) Fund in the amount of $2,339,245. A portion of these funds was budgeted in 2019 to accommodate building permits fees related to the Encore Redevelopment Agreement. The remaining amount appropriates revenues received in 2019 that were higher than previously estimated and are intended to fund various downtown projects.
The Public Works Department requests total supplemental expenditure appropriation of $304,769 in the Transportation Fund and $137,000 in the Transportation Capital Fund. Significant items in the Transportation Fund include:
• $129,769 to complete miscellaneous concrete repairs that were started in 2019
• $110,000 for the transit feasibility study started and contracted in 2019 that will continue in 2020
• $65,000 for a ten-year data plan for the school beacon system.
A revenue increase is also included in the Transportation Fund in the amount of $180,000 related to federal grant revenue that was awarded in late 2019 for transit feasibility study and alley master plan work that will occur in 2020. One requested expenditure increase is included in the Transportation Capital Fund in the amount of $137,000 for additional construction management costs related to the Crowfoot Valley Road and Founders Parkway project. Additional revenue is also included in the Transportation Capital Fund for grant and contribution revenue related to the Highway 86 and Allen Way and Highway 86 and Crowfoot Valley Road projects. This revenue was anticipated in 2019 and will instead be received in 2020. Additional Public Works requests include a total of $66,000 in The Fleet Fund for replacement vehicle lifts and garage doors that are past their useful life.
The Parks and Recreation Department has included supplemental appropriation of funds in the General Fund for ongoing design work for the East Plum Creek Trail in the amount of $534,670. Grant funds are anticipated for this project related to construction in 2021, and design must continue in order to meet grant timelines. Parks and Recreation also requests supplemental appropriation in the Community Center Fund in the amount of $450,000 to complete replacement of a Pool Dehumidification Unit at the Recreation Center. This replacement was contracted for 2019 and will be completed in 2020. Additional requests in Parks and Recreation include $50,000 in the Parks and Recreation Capital Fund for a recreation facility study previously budgeted in 2019, and $7,023 in the Golf Fund to complete the upgrade of the clubhouse bathrooms which has already begun.
Castle Rock Water has requested supplemental appropriation of funds within the Water, Water Resources, Stormwater, and Wastewater Funds, resulting in a total increase of $7,751,638. Requests include $1,419,862 for the McMurdo Gulch stream stabilization within the Stormwater Fund, $1,261,334 for the Aquifer Storage and Recovery project in the Water Resources Fund, $1,000,000 for ongoing expansion work at the Plum Creek Water Reclamation Authority, $707,170 for sewer line rehabilitation work in the Wastewater Fund, $277,438 to complete alluvial well rehabilitation work in the Water Fund, and $800,000 for a water bill assistance program in the Water Fund.
A listing of all requests for supplemental appropriations for the First Amendment to the 2020 Budget, including written descriptions of each item, is included in Attachment B.
In addition to the supplemental appropriations requests, departments will carry forward unspent capital appropriations, referenced in Attachment C, for capital projects that were planned and funded as previously approved by Town Council. The total amount of capital funding planned to be re-appropriated into the 2020 budget is $55,320,649.
The following charts identify carryforward amounts by fund:
As per section 9.15 of the Town Charter, appropriations for capital expenditures do not lapse and are automatically re-appropriated into the next year’s budget. Therefore, these continuing appropriations are provided for Council’s review. These items are detailed in Attachment C.
Budget Impact
As presented in Attachment D, the Finance Department has ensured that funding for these items is available through either revenues and/or fund balance for one-time expenditures, while maintaining adequate reserves within each fund. A summary of the proposed total increase in 2020 expenditure appropriation changes by fund is shown in the following table:
Staff Recommendation
Staff recommends that Town Council approve the Ordinance.
Proposed Motion
“I move to Approve Ordinance No. 2020 - __, An Ordinance Approving the First Amendment to the 2020 Budget by Making Supplemental Appropriations for 2020 and
Authorizing Changes for Year 2020 and Providing for its Emergency Adoption of First and Final Reading.”
Attachments
Attachment A: Ordinance No. 2020-__, An Ordinance Approving the First Amendment to the 2020 Budget by Making Supplemental Appropriations for 2020 and Authorizing Changes for Year 2020 and Providing for its Emergency Adoption on First and Final Reading
Attachment B: Requests for Supplemental Appropriation
Attachment C: Unspent 2019 Capital Project Allocations Carryforward for Fiscal Year 2020
Attachment D: Estimated Ending Funds Available for 2020