04-076-O

ORDINANCE NO. __________


AN ORDINANCE TO AMEND THE BUDGET OF THE CITY OF DULUTH FOR THE YEAR 2004 INCREASING THE BUDGET AND APPROPRIATING MONIES FOR THE PAYMENT OF SUCH INCREASE.

BY COUNCILOR NESS:

The city of Duluth does ordain:

     Section 1. That Ordinance 9640 passed and approved December 15, 2003, is hereby amended by appropriating an additional $1,100,000 from the general fund’s excess revenues in state aids in the amount of $800,000; investment earnings in the amount of $100,000; building inspection fees in the amount of $150,000; and cable franchise fee in the amount of $50,000 as follows:

     Department 100 - fire .........................  $200,000

     Department 200 - police .....................  $200,000

     Department 500 - public works ............  $300,000

     Department 700 - transfers .................  $400,000

     Section 2. That this ordinance shall take effect immediately upon its passage.


STATEMENT OF PURPOSE:  This ordinance would increase the city’s 2004 general fund appropriation authority by $1.1 million. $700,000 of the amendment is required to offset the impact of unbudgeted contract settlements. Although all city departments have been impacted by the contract settlements, only fire, police and public works will require additional expenditure appropriation due to the size of their respective departments. Another $400,000 is required to increase the general fund’s transfer to the self insurance fund which is budgeted in the transfers department. The city’s self insurance fund has experienced an unusual amount of liability claims paid out during the year and will require an additional appropriation to cover those additional expenses.


This technical amendment will be paid for out of current year excess revenues, not from the undesignated, unreserved fund balance of the general fund. The city is anticipating revenues in excess of budget in the following areas to offset the increased appropriation - $800,000 from state aids; $100,000 from earnings on investments; $150,000 from building inspection fees; and $50,000 from the cable franchise fee.


The impact on fund balance of the proposed budget amendment is neutral in that the city is using excess unbudgeted revenues to fund the increased appropriation. We are anticipating fund balance to remain flat with 2003's year ending balance of $3.5 million or approximately 5% of the general fund operating budget.