SR - - FY 2013-14 MID YEAR BUDGET ADJUSTMENTSOF 0
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AGENDA ITEM
February 11, 2014
TO: Honorable Mayor and
Members of the City Council
THRU: John W. Sibley
City Manager
FROM: Richard /Jac0Ys, 'inanye Director
Rick Otto, ,ffssVtant City Manager
1. SUBJECT
2013 -2014 Mid -Year Adjustments
ReviewedNer' ied By:
City Manager
Finance Dire o
To Be Presen d
Ric and Jac
s
Cons Calendar _
City Mgr Rpts
Council Reports _
Legal Affairs
Boards /Cmtes _
Public Hrgs
X Admin Reports
Plan/Environ
2. SUMMARY
This mid -year report recommends certain appropriation increases and budget adjustments.
Information at the time the FY 2013 -14 budget was being prepared did not suggest a need for
these budget revisions. Staff has made every effort to identify potential sources of savings
within currently budgeted funds or projects that might appropriately be used to fund the
expenditures that are identified below.
3. RECOMMENDED ACTION
To be approved in one motion:
1. Authorize the appropriation of $374,000 from the unreserved fund balance of the General
Fund to various City department salary and benefit accounts as a result of the disallowance
by the Department of Finance (DOF) of budgeted salary expenditures in the Successor
Agency to the Orange Redevelopment Agency (SAORA).
2. Authorize the appropriation of $85,000 from the unreserved fund balance of the
Low /Moderate Income Housing Asset Fund (921) to various City department salary and
benefit accounts as a result of the disallowance by the Department of Finance (DOF) of
budgeted salary expenditures in the Successor Agency to the Orange Redevelopment Agency
(SAORA).
4. FISCAL IMPACT
ITEM 1 2/11/14
Sufficient funds are available in the unreserved fund balance of the General Fund and
Low /Moderate Income Housing Fund to support the requested appropriations. Approval of the
recommended action will result in the following appropriations:
Action
Amount
From:
To:
1
$374,000
General Fund
Salaries & Benefits
2
85,000
Low /Moderate Housing (92 1)
Salaries & Benefits
5. STRATEGIC PLAN GOAL (S
Goal 2: Be a fiscally healthy community.
Goal 2(b): Analyze future fiscal needs and potential revenue opportunities.
6. GENERAL PLAN IMPLEMENTATION
Not applicable.
7. DISCUSSION and BACKGROUND
Background
The enactment of Assembly Bill 1484 ( "AB 1484 ") also known as the Redevelopment Budget
Trailer Bill created obligations and deadlines for redevelopment wind -down activities, including
specific language in Health and Safety Code Section 34177(m) with regard to preparation and
approval of the Recognized Obligation Payment Schedule ( "ROPS "). The ROPS document is
the primary financial document in which Successor Agency receives Redevelopment Property
Tax Trust Fund ( RPTTF) from the County Auditor - Controller to pay enforceable obligations and
staffing costs of the former Orange Redevelopment Agency for each six month period.
Subject to the Department of Finance (DOF) approvals of each ROPS, the Successor Agency
also receives 3% Administrative Cost Allowance or a minimum of $250,000 annually. AB 1484
specifically provides for staffing costs associated with specific project implementation to be
excluded from the Administrative Cost Allowance.
Discussion
During FY 14, DOF approved ROPS 13 -14A (July 1, 2013 through December 31, 2013) and
ROPS 13 -14B (January 1, 2014 through June 30, 2014). During the review process for ROPS
13 -14A and ROPS 13 -14B, DOF reclassified certain project staffing costs related to property
disposition, loan compliance, and property asset transfers to the Administrative Cost Allowance
thereby denying RPTTF funds for the Successor Agency operations. For FY 14, the
Administrative Allowance Cost allocated to the Successor Agency totaled $329,766.
It should be noted that the same project staffing costs were approved by DOF in ROPS 1
(January 1, 2012 through June 30, 2012), ROPS 2 (July 1, 2012 through December 31, 2012),
and ROPS 3 (January 1, 2013 through June 30, 2013). DOF has since changed the manner in
how project staffing costs are reviewed. Due to ROPS 13 -14A and ROPS 13 -14B, a ROPS
shortfall now exists resulting in a request for the Mid -Year Adjustment for Successor Agency.
General Fund — SAORA
ITEM 2 2/11/14
As a result of the disallowance by the DOF of project staffing costs (salary and benefits) in the
ROPS for FY 14 for both administration and project costs, it is necessary to reallocate and
appropriate staff funding in the amount of $374,000 from the SAORA Fund (940) to the General
Fund.
Low /Moderate Income Housing Asset Fund
As a result of the disallowance by the DOF of project staffing costs (salary and benefits) in the
Recognized Obligation Payment Schedule (ROPS) for FY 14 for both administration and project
costs, it is necessary to reallocate and appropriate staff funding in the amount of $85,000 from
the SAORA Fund (940) to the Low/Moderate Income Housing Asset Fund (921).
8. ATTACHMENTS
• DOF Determination Letter for ROPS 13 -14A dated May 17, 2013
• DOF Determination Letter for ROPS 13 -14B dated December 17, 2013
N: \STAFF REPORTS \2014 \021114a_ROPS 1415A (ROPS6).doc
ITEM 3 2/11/14