Office of the City Manager
Reference: Second Amendment to the 2024 Budget
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Kayla Barber-Perrotta, Budget and Performance Manager
Date Prepared: April 3, 2024
PURPOSE:
To amend the 2024 Budget to address changes to how items are tracked in the financial system, to accommodate grant awards, to adjust for growth in the City’s fleet operations, and to address changes to existing project schedules and amounts.
STRATEGIC FOCUS AREA:
Financially Responsible
BACKGROUND:
The City Council adopted the 2024 Budget on October 17, 2023, at $265,434,894. The First Amendment to the 2024 Budget adjusted this amount to $266,382,461 to accommodate additional police officers and a grant to the Greater Brighton Chamber of Commerce. In March, as per the 2024 Budget Resolution, capital carryover was administratively adjusted to reflect final year-end amounts reducing the budget to $258,626,442.
The Second Amendment to the 2024 budget addresses several items. The first item addressed in this amendment is a rework of how items are being tracked in the financial system. In preparation for the new financial system, Finance and Budget are reviewing all processes and accounts to look for opportunities to streamline items, report better, and overall increase the functionality of our financial practices. As part of this, staff identified a Victim Services reimbursement program that was running through liability accounts. In order to improve reporting and transparency, staff is switching this to a revenue/expenditure approach. While this does not change or add any funding to the program, it does require an additional $75k be appropriated in the General Fund.
Additionally, with the switchover of how Lodging Tax dollars are being administered in 2024, staff originally planned to track all items within the Lodging Tax fund and appropriated as such. In practice, however, this is proving difficult for monitoring and administration of funded programs as it splits program budgets between the General Fund and Lodging Tax Fund. To rectify this, staff is recommending the spend in the Lodging Tax Fund be adjusted to a transfer to the General Fund and the individual activities be split instead in the General Fund amongst the appropriate programs. This will allow full program amounts to be shown in one area for better management. This does not change the amounts being awarded but does require additional appropriation in the General Fund of $401k.
The third item being addressed in this amendment is grants. The City was recently awarded a $500k Adams County Parks and Open Space Grant for the Adult Sports Complex to build shade structures. This grant agreement was approved by Council in February and this amendment simply adds the appropriation to the Parks Capital Fund. The City was also recently notified that it will receive $960k in Congressionally Directed Spending for water pipeline replacement in the Core City. Staff is currently working through the agreement process and will bring that to Council as soon as it is available. This amendment is setting up the appropriation in the Water Fund so that staff may begin work as soon as Council approves the grant agreement. The third grant item is in relation to an IGA with Commerce City. In March of 2023, the City Council approved an IGA committing $400k to Commerce City as a match to a grant for design of an interchange at 120th Avenue and US 85. Commerce City has now received that grant and payment must be made. This payment will be addressed utilizing fund balance in the Capital Fund.
This amendment also addresses grants from the City to residents and other entities. The amendment includes a $200k appropriation of fund balance in the General Fund to support Council’s direction to provide financial support to residents impacted by changes to the tree height requirements in the City. Additionally, in February, Council extended the deadline for the Brighton Cultural Arts Commission to complete its 2023 Lodging Tax grant to the end of 2024. As such, $30k in additional appropriation is required in the Lodging Tax Fund to be addressed through fund balance. Staff is also recommending $20k be appropriated for contingency in the Lodging Tax Fund. While historically the City has not seen mid-year grant requests, there have been three in the last two years. To ensure these can be managed efficiently without the delays of needing an additional budget amendment and public hearing, staff is recommending this contingency be appropriated from fund balance at this time. If it goes unused, it will simply return to fund balance at the end of the year.
The next area addressed through this budget amendment is the City’s fleet operations. The City’s fleet is growing and alongside that comes additional maintenance costs and management needs. This amendment includes $31k for a new fleet management software to allow for better tracking and monitoring of these assets. Additionally, $160k is recommended for increased maintenance costs. The City saw a sharp increase in the cost of services at the end of 2023, and 2024 projections are trending similarly. As such, additional appropriations are necessary to cover these anticipated costs. As the Fleet Fund is an internal service fund, it receives its revenues through a vehicle maintenance fee paid by the other funds based on their fleet load. This means appropriation is also needed for the General Fund, Water Fund, Wastewater Fund, Storm Drainage Fund, and Cemetery Fund to compensate for this increased cost. For each of these funds, this additional allocation will come from fund balance.
Finally, this amendment addresses changes to several already approved projects. The first is an additional $45M to the Water Fund to support construction of the Water Treatment Plant. The City received a revised pay schedule based on current construction timelines. As such, staff is recommending the City move forward a portion of the funding originally slated for 2025 to address higher levels of construction in 2024. This will be supported by fund balance. Additionally, staff is recommending $750k originally slated for 2025 be moved forward to 2024 to support sports complex field design in the Parks Capital Fund. This project was originally split, but the full amount is now expected to be spent in 2024. This is supported by fund balance. Finally, the City is obligated under an agreement with the South Adams Water and Sanitation District to construct sewer line connections for the 27J Bus Barn and Shiraba Park. While these were budgeted in 2024, the bids came back higher than anticipated. As such, staff is recommending an additional $487k be appropriated in the Wastewater Fund. This will be covered by fund balance.
This amendment will appropriate an additional $49,216,682 bringing overall appropriations to $307,843,124.
CRITERIA BY WHICH COUNCIL MUST CONSIDER THE ITEM:
All changes to Fund-level appropriations of the adopted budget must be made by a Supplemental Budget Appropriation.
STAFF RECOMMENDATION
Staff is recommending approval of the attached Second Amendment to the 2024 Budget Resolution.
OPTIONS FOR COUNCIL CONSIDERATION
Approve, amend, or deny the proposed resolution.
ATTACHMENTS
Proposed Resolution
Presentation