title
Consideration of 2023 Operating Budget carryovers
body
Submitted by:
John Ruggini
Department:
Finance
A. Issue
Carryover requests represent one of the final annual budgetary processes as unused but committed funds are transferred from the 2023 Budget to the 2024 Budget. As these funds would have alternatively positively impacted the end of the year surplus/deficit, approval of a carryover requests represents an important decision.
B. Background/Options
A carryover is a budgetary mechanism by which spending authority is transferred from one fiscal year to the next. This is most often necessary where a project budgeted for in one fiscal year (2023) is not completed so that remaining committed but unspent funds associated with the project are transferred to the following fiscal year (2024). This is accomplished by amending the 2024 expenditure budget to reflect approved carryovers. For the General Fund, in order to maintain a balanced budget, the unspent 2023 funds that are carried over are deposited in the fund balance as an "assigned" fund balance and reflected as a revenue in the subsequent year’s budget. As a result, carryovers can have an impact on the unassigned fund balance if a greater amount is carried over as compared to the prior fiscal year as funds are then shifted from the unassigned to the assigned fund balance, all other things being equal.
Departments submitted carryover requests in early January. Following Finance Department review, final recommendations are presented below by fund and in detail in Attachment A. Funds that were already encumbered on a purchase order or are designated as non-lapsing in the budget resolution are automatically approved for carryover and not included in these charts.
Recommended Carryover Amounts by Fund
The General Fund carryover is $5,392 more than the amount carried over last year. As a result, the unassigned fund balance would decrease by this difference if that were the only change as more funds are needed to be set aside for subsequent year expenditures.
The attached tables describe each carryover. Year-end forecasts assumed funds for projects already in progress would be spent by year-end. Therefore, approving these carryovers does not worsen the forecast. Denying the carryover would only create an unbudgeted 2024 expense in the cases where a project is already begun and the City has a contractual commitment.
However, carryovers for uncommitted funds do have the effect of reducing the eventual year-end surplus. Staff give careful consideration to these carryovers and only recommend those that have a beneficial impact on City operations or services.
C. Strategic Plan (Area of Focus)
NA
D. Fiscal Impact
See discussion above.
E. Recommendation
I recommend that 2024 Budget be amended to reflect the carryovers as presented in Attachment A. These figures are intended to be not-to-exceed amounts and may change as final 2023 bills are paid and are contingent upon year-end results.