HomeMy WebLinkAboutOrdinance No. 2835-2015Suggested by: Administration
CITY OF KENAI
ORDINANCE NO. 2835 -2015
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA,
APPROPRIATING FUNDS IN THE GENERAL FUND AND AUTHORIZING THE CLOSURE
OF THE CAPITAL PROJECT MANAGEMENT FUND.
WHEREAS, The City established a fund for the management of capital projects in
November 2009; and,
WHEREAS, the intent of the fund was to accumulate all costs related to capital project
management and allocate those costs to projects based upon actual hours of
management to each project; and,
WHEREAS, the majority of City capital project grants only allow the charging of direct
wages and benefits to grants resulting in under recovery of costs since inception of the
fund; and,
WHEREAS, as a result of grant limitations on allowable costs, the fund is unable to
work as designed and closure of the fund, with future management wages and benefits
being directly charged to projects, being in the City's best interest; and,
WHEREAS, the Capital Project Management Fund was not included in the FY2016
Budget as its closure was projected; and,
WHEREAS, the transfer of funds from the General Fund represents the unrecovered
costs paid by the Capital Project Management Fund since 2009 which would have
been paid by the City's General Fund had the fund never been created; and,
WHEREAS, closure of the fund will eliminate the under recovery of management costs
and eliminate the building deficit in the Capital Project Management fund created by
the under recoverable costs.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA:
Section 1: Form: That this is a non -code ordinance.
Section 2: That estimated revenues and appropriations be increased as follows:
General Fund
Increase Estimated Revenues:
Appropriation of Fund Balance $97.004.29
Increase Appropriations:
New Text Underlined; [DELETED TEXT BRACKETED]
Ordinance No. 2835 -2015
Page 2 of 2
Transfer to Capital Project Management Fund $97.004.29
Section 3: That effective May 30, 2015 the City shall close its Capital Project
Management Fund and future costs for project management will be directly charged to
projects as opposed to being recovered by a billing rate.
PASSED BY THE COUNCIL OF THE CITY
2015.
OF KENAI, ALASKA, this 17th day of June,
PAT PORTER, MAYOR
Approved by Finance:
Introduced: June 3, 2015
Adopted: June 17, 2015
Effective: June 17, 2015
New Text Underlined; [DELETED TEXT BRACKETED]
LW
"'Villaye with a Past, Git with a Future"
FINANCE DEPARTMENT
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014
/Ai o: Rick Koch, City Manager
. [ From: Terry Eubank, Finance Director
Date: June 10, 2015
Re: Ordinance 2835 -2015 amendment required
As indicated in my May 26, 2015 memo, an amendment is needed to insert the correct amount
for the closure of the Capital Projects Management Fund effective May 31, 2015. It is
respectfully requested that the following amendment be made:
"Amend Section 2: Appropriation of Fund Balance amount to $97,004.29 and Transfer to Capital
Project Management Fund amount to $97,004.29."
Support for this amendment is appreciated.
u
"Villaye with a Past, C# with a Future"
FINANCE DEPARTMENT
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014
To: Rick Koch, City Manager
7 From: Terry Eubank, Finance Director
Date: May 26, 2015
Re: Ordinance 2835 -2015
The purpose of this memo is to provide support for and to recommend passage of Ordinance
2835 -2015. Ordinance 2835 -2015 authorizes a supplemental appropriation in the General Fund
to provide funds to cover the deficit in fund balance of the Capital Project Management Fund and
authorizes the closure of that fund effective May 30, 2015.
The City established a fund for the management of capital projects in November 2009 with the
fund's intent to accumulate all costs related to capital project management and allocate those
costs to projects based upon actual hours of management to each project. After years of trying to
get granting agencies like the Municipal Matching Grant Program and the Airport Improvement
Program to accept our calculated management rate with no success it is now proposed to transfer
sufficient funds from the General Fund to cover the funds deficit in fund balance and authorize
its closure effective May 31, 2015.
It is estimated that $110,000 will be needed for the funds deficit in fund balance. This deficit has
been caused by unrecoverable expenses since inception of the fund. Had the fund not existed
these expenses would have been paid by the General Fund. Funding this deficit now is a true -up
prior to fund closure. I expect to calculate the exact balance once all billings and expenses have
been recorded for May 2015. A memo requesting an amendment to insert the correct amounts
will be provided for the June 17th Council Meeting.