To: Honorable Mayor and Members of Town Council
From: Trish Muller, CPA, Finance Director
Title
Ordinance Approving the Second Amendment to the 2020 Budget by Making Supplemental Appropriations for 2020 and Authorizing Changes for Year 2020 (Second Reading - Approved on First Reading on July 7, 2020 by a vote of 7-0)
Body
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The Ordinance was approved on first reading on July 7, 2020 with a vote of 7 to 0 with no changes.
Executive Summary
The Charter for the Town of Castle Rock allows for amendments to budget appropriations, including requests for supplemental appropriations that require approval by ordinance (Section 9.10). The Finance Department prepares budget amendments for Town Council consideration based on needs that may arise throughout the year. The number of budget amendments varies by year depending on needs/opportunities as they are identified.
Staff continues to monitor and analyze the financial impact of the COVID-19 crisis which will result in decreased revenues in multiple Town funds. As reported to Council, a number of expenditure reductions have occurred. Other additional measures, such as the early payoff of interfund loans and shifting certain expenses from the General Fund are included in this budget amendment.
Supplemental expenditure requests in this proposed Second Amendment to the 2020 Budget total $9,782,105, with the majority requested in Castle Rock Water Funds, and additional revenue totaling $5,479,352. All items requested in this budget amendment are one-time in nature and not recurring. Descriptions of requested items are included in Attachment B. The Finance Department has reviewed all requests and has determined that sufficient funding is available to accommodate this proposed Second Amendment to the 2020 Budget. Following is a summary of requested items.
Discussion
Total requested changes to appropriations referred to in Attachment B increase total expenditures for 2020 by $9,782,105. Major requests included in this budget amendment are described below and are grouped by Town priority.
Ensuring our water future
• Castle Rock Water requests supplemental appropriation of funds totaling $6,321,753 for multiple stream and tributary stabilization projects within the Stormwater Fund, including work at East Plum Creek, Hangman’s Gulch, and Industrial Tributary. Corresponding bank loan proceeds revenue in the amount of $4,500,000 is included to cover a portion of these costs. This bank loan was previously approved by Council on November 19, 2019.
• Castle Rock Water also requests supplemental appropriation of funds in the amount of $1,070,002 to implement the Supervisory Control and Data Acquisition (SCADA) master plan that was adopted by Council in late 2019. The SCADA master plan includes a six-year implementation schedule and all future years will be incorporated into rates and fees studies and future budgets. In addition, $38,428 is included to complete work in the Village North neighborhood.
Enhancing our transportation
• The Public Works Department requests supplemental appropriation in the Transportation Capital Fund in the amount of $1,217,570. These funds include $1,017,570 for additional design and construction costs for the Plum Creek Parkway Widening and $200,000 for added construction funding related to the Crowfoot Valley Road and Founders Parkway improvements.
Other Town funds and initiatives
• The Development Services Department requests supplemental appropriation within the Development Services Enterprise Fund in the amount of $351,052 to accommodate a shift in personnel costs from the General Fund. This is reflected as a decrease in expense in the General Fund due to anticipated lost sales tax revenue as a result of COVID-19.
• The Facilities Division requests supplemental appropriation of $130,000 in the General Long Term Planning Fund to fund the demolition and redevelopment of the former facilities building location. Facilities also requests supplemental appropriation within the General Fund of $100,000 for remediation costs at the property purchased on Wilcox St. in 2019. Corresponding state grant revenue is also included in the amount of $75,000 which will reimburse a portion of these costs.
• In addition to the items listed above, additional appropriation is requested for two advance interfund loan payments to the General Fund to assist in providing expedited revenue in light of anticipated sales tax declines due to COVID-19. An additional $664,352 is requested in the Fire Capital Fund to make expedited payments on a loan that helped fund Station 152 construction and $240,000 is requested in the Municipal Facilities Capital Fund to pay off a loan that partially funded the Public Safety Training Facility.
The additional amount of expenditures requested in this amendment are shown below and are grouped by Town fund.
As presented in Attachment C, the Finance Department has ensured that funding is available through either revenues and/or fund balance for requested items, maintaining adequate reserves within each fund.
Staff Recommendation
Staff recommends that Town Council approve the Ordinance.
Proposed Motion
“I move to approve on the Ordinance as introduced by title, on second reading.”
Attachments
Attachment A: Ordinance
Attachment B: Requests for Supplemental Appropriation
Attachment C: Estimated Ending Funds Available for 2020