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Consideration of amendment to the 2025 Budget to reflect 2024 capital project carryovers
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Submitted by:
John Ruggini and Thania Cervantes
Department:
Finance Department
A. Issue
Earlier this year, the 2024 Operating Carryovers were approved. Presented here for approval are the capital project carryovers
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 (2024) is not completed so that remaining committed but unspent funds associated with the project are transferred to the following fiscal year (2025). While the City adopts a five-year capital plan, only the first year of the plan is actually authorized. In this case, the 2024-2028 plan was adopted in December 2023 and the 2025-2029 plan was adopted in November 2024. We are now requesting the 2025 fiscal year of the 2025-2029 plan be amended for the unspent 2024 funds.
Capital projects are typically complex infrastructure projects (such as street and utility construction) or large equipment purchases (such as a Fire engine) that often span multiple fiscal years so carryover funds are not uncommon. The Capital Budget is adopted separate from the Operating budget but once approved, they are combined in the City's financial system so spending can be tracked. Capital projects have multiple funding sources including property taxes, special assessments, grants, surplus funds (cash) and bonds (borrowed money). The majority of capital carryovers typically represent bond funds that have been borrowed but not yet spent. Of the $19.6 million requested for carryover, 52% are bond funds. These borrowed funds legally must be spent on capital projects within two years of having been borrowed. Staff actively monitor these timeliness requirements.
I am requesting that $19,582,958 be carried over as compared to the $16,465,418 in the prior y...
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