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AGENDA ITEM <br /> <br />MEMORANDUM <br /> <br />DATE: March 17, 2014 <br /> <br /> <br /> <br />TO:Honorable Mayor and City Council Members <br /> <br /> Patrick Klaers, City Administrator <br /> <br />FROM: Sue Iverson, Director of Finance and Administrative Services <br /> <br /> <br />SUBJECT: 2013 and 2014 Budget Adjustments <br /> <br /> <br /> <br />Background <br /> <br />As discussed with the City Council in 2013, having the $500,000 TCAAP loan (from the <br />PIR Fund) and the Kimley-Horn expenses for the planning and transportation studies <br />included within the General Fund is good from a public information or transparency point <br />of view, but it also makes year-to-year comparisons of the budget totals very difficult. <br /> <br />The City Council made a budget adjustment for these costs and the loan in 2013 and they <br />were also programmed into the 2014 budget. <br /> <br />Discussion <br /> <br />In talking with our auditor, we feel it would be much better to set up a separate capital <br />fund for these transactions, as they are basically all infrastructure related and capital in <br />nature. By doing this it will be more transparent and easier to track as the expenditures, <br />fund balance, and revenue sources are expected to come over time as the property <br />develops. By making this change, the General Fund will not have dramatic fluctuations <br />from year-to-year, making it easier and more transparent for everyone to follow the costs <br />and fund balances for both funds and the project. <br /> <br />Staff proposes to set up a new fund called: TCAAP Capital Fund with a number of 413. <br />The auditor agrees with this proposal and recommends that we do a budget adjustment <br />effective December 31, 2013 for the 2013 expenditures, since we have not yet closed our <br />books, and also do a budget adjustment for 2014 effective March 31, 2014. This will <br />transfer all these project costs to its own fund. The General Fund will still have a <br />TCAAP department where normal expenditures would be allocated as any other <br />department in the City. <br /> <br />The new fund would reflect the interfund loan from the PIR Fund as well as the <br />expenditures for the planning and transportation studies. The General Fund will then be <br />