To: Honorable Mayor and Members of Town Council
From: Trish Muller, CPA, Finance Director
Title
Ordinance Approving the Third Amendment to the 2020 Budget by Making Supplemental Appropriations for 2020 and Authorizing Changes for Year 2020 (Second Reading - Approved on First Reading on August 18, 2020 by a vote of 7-0)
Body
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The Ordinance was approved on first reading on August 18, 2020 by 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 is anticipated to result in decreased revenues in multiple Town funds. As reported to Council, a number of expenditure reductions and deferrals have occurred. Additional adjustments will be made as necessary or as financially beneficial opportunities arise.
Supplemental expenditure requests in this proposed Third Amendment to the 2020 Budget total $20,716,258 and additional revenue totaling $30,470,990 as shown in Attachment A. All items requested in this budget amendment relate to the issuance of Certificates of Participation (COP) planned to fund the Town’s obligation related to the Encore parking garage and the refunding of the Series 2013 Transportation Action Plan (TAP) Bonds. Attachment B includes descriptions of requested items. The Finance Department has reviewed all requests and has determined that sufficient funding is available to accommodate this proposed Third Amendment to the 2020 Budget. A summary of requested items follows.
Discussion
Total requested changes to appropriations referred to in Attachment B increase total expenditures for 2020 by $20,716,258. Descriptions of major requests included in this budget amendment follow.
The Finance Department requests supplemental appropriation within the General Fund of $1,500,000 for a transfer out to the newly formed Parking Fund. This fund was recently created to fund the debt payments related to the issuance of COPs for the Encore parking garage and other ongoing Town parking obligations. In addition to a corresponding revenue increase of $1,500,000 in the Parking Fund from the transfer of available fund balance in the General Fund, the Finance Department requests supplemental appropriation in the Parking Fund in the amount of $295,865. These funds are intended to pay debt issuance costs this year for the issuance of COPs. Total COP issuance revenue to the Parking Fund in the amount of $10,045,865 is also included. This amount accommodates debt and debt issuance costs to fund the Town obligation related to public parking spaces in the Encore parking garage. Town funds will be expended when the construction of the parking garage is complete. This is anticipated to occur in 2021.
In addition, the Finance Department requests supplemental appropriation of funds within the Transportation Capital Fund in the amount of $18,920,393. These funds will be used to pay debt issuance costs in the amount of $199,120. The remaining $18,721,273 will fund a payment to escrow for the refunded bonds. Corresponding bond proceeds revenue is included in the amount of $18,925,125. The original Series 2013 TAP Bonds funded a portion of construction of the I-25 and Plum Creek Parkway interchange and a portion of construction of the North Meadows Drive extension/Castle Rock Parkway. The refunding of these bonds will result in more favorable interest rates and long-term interest savings in the Transportation Capital Fund, allowing for additional available project funds for Transportation needs.
The additional amount of expenditures requested in this amendment are shown below and are grouped by Town fund.
Budget Impact
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 as written.
Proposed Motion
I move to approve the Ordinance as introduced by title, on second reading.
Attachments
Attachment A: Ordinance
Attachment B: Requests for Supplemental Appropriation
Attachment C: Estimate Ending Funds Available for 2020