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<br />City of La Porte <br />Interoffice Memorandum <br /> <br />TO: <br /> <br />Mayor and Council (\ <br />Debra Feazelle, Municipal Advisor/Consultant OJ <br /> <br />December 28, 2006 <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Fiscal Year 2006 Year-End Budget Amendment/Adjustments <br /> <br />During the FY 2007 Budget process, the Departments revised their original budgets based on six <br />months of actual data and estimated needs for the remainder of the year. The revised budget based <br />on Director's projections totaled $27,280,748. Now that the Fiscal Year has ended, actual <br />expenditures for the 2006 fiscal year total $27,312,593, which is in excess of the revised budget by <br />$31,845. <br /> <br />The excess expenditures occurred due to several reasons. First, many of the overages occurred due <br />to the lack of data at the time the estimates were prepared. Departments only had six months of <br />data in which to base their estimates when the process began in May. For instance, one of the <br />overages of $50,000 occurred in the termination pay line item in the non-departmental division. A <br />total of $72,197 was paid out in periods 11 and 12, long after estimates were prepared. This large <br />increase in termination pay could not have been foreseen. Another area where overages occurred <br />was in the personal service line items. Payroll estimates are based on 26 pay periods; however, the <br />fiscal year end fell in the middle of a pay period causing 12 of the payroll to be accrued in FY 2006. <br />This equated to overages across the divisions of $69,400. Finally, many departments were overly <br />optimistic in their estimates and did not anticipate needed purchases at year end, which caused <br />them to go over their revised budgets. <br /> <br />In light of this information, I had directed the budget staff to request a budget amendment for the <br />FY 2006 General Fund budget in the amount of $32,000 to cover the excess expenditures. The <br />requested amendment needs to be brought to the next City Council meeting before the audit is <br />completed. <br /> <br />Additionally, pursuant to the City Charter and Financial Policies of the City, the City Manager has <br />the authority to approve budget adjustments within individual funds. I am directing the budget <br />staff to reallocate expenditure budgets within the general fund to cover overages within divisions <br />and departments. <br /> <br />DF:SG <br /> <br />xc: <br /> <br />John Joems, Interim City Manager <br />