S-1364 - 03/12/2013 - BUDGET - Ordinances Supporting DocumentsAGENDA ITEM
Regular Board of Trustees Meeting
of
March 12, 2013
SUBJECT: Transfers Among Budget Line Items
FROM: Sharon Dangles, Finance Director
PTEM 6.F. 1)
I�
BUDGET SOURCE/BUDGET IMPACT: Effects Numerous Budget Programs
RECOMMENDED MOTION: I move that the Village Board approve Ordinance 5 -1364,
"An Ordinance Authorizing Transfers Among Budget Line Items" for the year ended
December 31, 2012.
Background/History:
During the course of a year, there are numerous situations that may arise that cause an account,
program, or even a fund to exceed its budget. When this occurs, State statutes provide that the
corporate authorities may make transfers from "one corporate object or purpose to another
corporate object or purpose ". Additionally, statutes provide that the corporate authorities may
delegate authority to heads of municipal departments to "delete, add to, change, or create sub-
classes within object classes budgeted previously to the department with the approval of the
budget officer or executive officer of the municipality ". The Village has defined a corporate
object or purpose to be an individual program or fund. Sub - classes within object classes have
been defined as accounts and categories within a budget program.
Now that all of the year -end accounting adjustments have been made, several budget accounts,
categories, and programs have been determined to have ended 2012 over budget. The Village
Board's policy on Finance, Taxation, and Budget, prepared based on the previously mentioned
statutes, outlines the following procedures for budget administration and how these variances are
to be addressed:
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1. That the Budget Officer, with the approval of the Village Manager, may authorize
transfers of budgeted funds between accounts or between account categories within a
single budget program.
2. That any transfer of budgeted funds from one budget program to another shall be
subject to approval by the Board of Trustees upon the recommendation of the Village
Manager.
3. That any transfer from contingency shall be subject to approval by the Board of
Trustees upon the recommendation of the Village Manager.
4. That any increase in the total appropriation within any fund shall be subject to
approval by the Board of Trustees upon the recommendation of the Village Manager.
In order to make as few changes to the originally adopted budget as possible, formal budgetary
control has been established at the category level, i.e. personnel, materials and supplies,
operation and contractual, and capital. For example, if staff turnover created a need for
overtime, this may lead to the overtime account going over budget. However, this would likely
be offset by an underbudget salary account. By not doing budget transfers for these types of
situations we preserve the original budget as the basis for evaluating our actual performance
versus expected performance.
Through Budget Year 2002, staff approved an extensive listing of budget transfers
administratively due to budget variances in account categories within a single budget program as
provided for under Procedure #1. In practice, these transfers were only reflected in the Village's
audit report-our accounting records were never adjusted for any budget transfers in order to
maintain proper original budget/actual comparison data. With the new reporting requirements
associated with GASB Statement #34, the Village is now required to publish original budget
amounts in addition to revised budget amounts in its audit report. This new requirement reduces
the value of these administrative transfers required under option #1. After consultation with the
Village's auditors, in Budget Year 2003 and thereafter only program -to- program transfers and
additional fund appropriations are recorded. These transfers are required since this is the level of
legal control where budget compliance is measured.
In addition to the budget transfers required under the Village's Financial Policy ordinance,
during 2004 the Village Board began requiring budget transfers during the year when an
individual line item account exceeded budget by more than 10 %. This policy was revised in
October, 2006 by eliminating the 10% threshold and instead requiring line item transfers when
an account exceeds its budget by $2,500 in a material and supply, operation and contractual or
capital account (6000 to 9000 account series) or $10,000 in a personnel series account (5000
account series). Many of these transfers have already been approved by the Village Board and
have been posted to the accounting system; thus, these transfers are not reflected here.
Please note that all transfers are only for the amounts necessary to offset the individual program
budget variances, and in most cases the transfer is done only to the individual line item that has
the largest variance. In most cases it is several accounts that would cause a program to exceed
its budget. Also, in some cases the variance in a particular line item may be greater than the
amount of the transfer, with offsets found in other line items within the budget program. After
these transfers are made, numerous line -items and categories will remain over budget; however,
each program in total will be within budget.
Program Transfers
The General Corporate Fund total actual expenditures are under the budgeted expenditures by
$.5 million for the year ending December 31, 2012. Please note that "over budget" does not
mean that money was over spent. There are numerous situations that occur during the year that
may cause a particular line item to go over the annual budget. The following is a brief
explanation of the causes of program transfers that exceed $10,000:
Program 121 - Legal: Account 121 -76350 (Litigation Settlement) is over budget in total by
$27,790 due to settlement by Board. The Village Attorney budgeted amount of $19,010 and
Village Clerk salaries of $8,780 was used to offset these legal expenses.
Program 132 -Human Resources: Outside Legal Services is over budget by $113,000 due to
ongoing litigation cases with PSEBA and personnel matters.
Program 151- Information Services: Account 151 -65000 (General Equipment) is over budget by
$15,000 due to personal computer replacements.
Program 162 - Emergency Management: Account 162 -90100 (New Equipment) is over budget by
$16,000 due to emergency paging system. It was originally budgeted for in a different line item
under General Equipment.
Program 611 - Police Services Management: Account 611 -51200 (Police Pension) is over budget
by $13,000 due to actuarial calculations approved by Board. Outside Legal Services (Account
611 - 76300) was over budget by $16,200 due to ongoing litigation.
Program 621 - Police Field Services: Account 621 -50000 (Salaries — Full Time) is over budget by
$67,000 due to contract raises, moving from a 80 hour to 84 hour work period and being short 3
officers, and retirement payouts. Account 621 -50300 (Overtime) is over budget by $57,000 with
being short 3 officers, and Account 621 -51200 (Police Pension) is over budget by $104,300 from
actuarial calculations approved by the Board.
Program 631 - Police General Support: Account 631 -50000 (Salaries Full -time) is over budget by
$19,000 due to a transfer out that occurred during the year, therefore we needed to transfer the
money back to this line item. Account 631 -52300 (Training) is over budget by $10,000 due to
additional training with NATO.
Program 632 — Police Investi atg ions: Account Salaries -Full Time is over budget by $25,300 due
to contract raises, and moving from a 80 hour to 84 hour work period and being short 3 officers,
Account 632 -51200 (Police Pension) is over budget by $33,000 from actuarial calculations
approved by the Board.
Program 634 — Police Support Services: Account 634 -90100 (New Equipment) is over budget
by $10,050 due to DuComm transition costs.
Program 700 -Fire, Rescue & EMS Operations: Account 700 -50000 (Salaries — Full -time) is over
budget by $21,000 due to a retirement with the final payouts. The Fire Pension is over budget by
$39,000 from actuarial calculations approved by the Board.
Program 360 — Public Works Management: Liability Insurance (Account 360 - 70100) is over
budget by $14,000 due to more than expected deductible payments.
Program 351 -Water Operations: Account 351 -62200 (Maintenance Supplies) is over budget by
$19,000 due to additional supplies needed during the year. Account 351 -65000 (General
Equipment) is over budget by $26,100 due to the cost of water meters. Account 351 -74300
(DWC Oper. & Maint. costs) is over budget by $269,000 due to water purchased being higher
than expected from budget.
Program 451 -Water System Improvements: General Equipment is over budget by $169,000 due
to the expenses being budgeted in a different account.
Program 812 — Swimming Operations: General Equipment is over budget by $15,000 due to
money being budgeted in a different line item. Therefore, a reclassification from the Structural
Improvements line item is needed.
Program 813 — Summer Tennis: Account 813 -50200 (Seasonal Salaries) was over budget by
$10,100 due to money being budgeted in a different line item. Therefore, a reclassification from
the Commissions line item is needed.
Program 816 — Open Field: Taste of Oak Brook expenses were over budget by $35,200,
however the revenues covered these expenses for the event.
Program 821 — Clubhouse Food & Beverage Operations: Account 821 -50500 (Commissions) is
over budget by $13,010 due to the amount paid based on the number of events booked.
Program 823 — Golf Food & Beverage: Part -time salaries is over budget by $12,000 due to the
employee working off season to assist with food & beverage operations.
Program 831 -Golf Club General Operations: Account 831 -50200 (Salaries — Seasonal) is over
budget by $21,000 due to more assistance needed. Account 831 -63000 (Cost of sales) was over
budget by $20,400 due to merchandise purchases needed for Golf.
Program 133 - Employee Benefits: Account 133 -70340 (HMO Premiums) is over budget by
$73,200 due to higher claims.
Please feel free to contact me if you should have any comments or questions.
ORDINANCE 2013- BU -EX -S -1364
AN ORDINANCE AUTHORIZING TRANSFERS
AMONG BUDGET LINE ITEMS
WHEREAS, the Village Manager has recommended certain transfers among budget line items in
the Annual Budget Ordinance passed for the fiscal year beginning January 1, 20122814 and ending
December 31, 20122044, and certain transfers of sums of money in said Budget Ordinance from one
object or purpose to another object or purpose; and
WHEREAS, the Village President and Board of Trustees concur with and approve of the Village
Manager's recommendations.
NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS that the following
transfers are hereby authorized:
Section 1: The recitals above are hereby incorporated into and made a part of this ordinance.
Section 2: In the attached schedule, attached as "Exhibit A ", the amounts shown in the column
titled "Transferred From" represent unexpended balances. The total of said amounts are hereby
transferred to the various items specified in the "Transferred To" column immediately opposite the items
specified in the "Transferred From" column.
Section 3: The Promenade TIF Fund budget is amended by increasing the amount in account
283 - 80700, "Debt Principal ", by $11,115, which increase shall be funded by this Fund's fund balance.
Section 4: The Self Insurance Fund budget is amended by increasing the amount in account
133 - 70800, "Health Claims ", by $186,020, which increase shall be funded by this Fund's fund balance.
Section 5: This ordinance shall be in full force and effect from and after its passage and approval
as required by law.
Section 6: All ordinances or parts thereof in conflict with the provisions of this ordinance be and
the same are hereby repealed to the extent of such conflict.
APPROVED THIS 12'" day of March, 2013.
PASSED THIS 12`" day of March, 2013.
Ayes:
Nays:
Absent:
Gopal G. Lalmalani
Village President
Ordinance 2013- BU- F-(1 -5 -1304
Authorizing Transfers Among Budget
Line Items Page 2 of 2
ATTEST:
Charlotte K. Pruss
Village Clerk