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HomeMy WebLinkAboutAgenda - 02-15-2011 - 7bd~D- awl l - ooq ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 15, 2011 Action Agenda Item No. ~_ SUBJECT: School Capital Projects Budget Ordinance Amendments -Budget Amendment #7-B DEPARTMENT: Financial Services PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Attachment 1: Reconciliation of Under- funded Projects as of 6/30/10 ' Attachment 2: Capital Project Monitoring and Administration Procedures INFORMATION CONTACT: Clarence Grier, (919) 245-2453 Michael Talbert, (919) 245-2153 PURPOSE: To approve Budget Amendment #7-B appropriating $192,719 of fund balance in the General Fund for transfer to the School Capital Project Fund. BACKGROUND: The Board of County Commissioners was presented a two year plan on February 3, 2009 related to School and County Capital Projects. The plan has been followed the past two years with funds appropriated to fund under-funded County and School Capital Projects. Funds transferred from completed projects to fund under-funded projects, and projects completed in the past 10 years have been closed. As part of the on-going process of reviewing School Capital Projects, County staff has met with both School Systems to reconcile project budgets as of June 30, 2010. This reconciliation has led to the need to appropriate additional revenues to fund under-funded projects. Attachment 1 lists under-funded and over-funded projects and the net shortfall in the Schools Capital Projects Fund as of June 30, 2010. After completed projects were closed and resources reallocated within the School Capital Projects Fund, the remaining revenue needed to fund under-funded projects is $192,719. On June 16, 2009 the Board was provided a copy of a new internal administrative monitoring procedure for School Capital Project Ordinances. Financial Services is following that procedure by: 1. Meeting with both school systems twice a year to compare records and resolve any differences. 2. Closing out project budgets when a project is complete. 3. Communicate with both school systems to reconcile accounting records as needed to address changes in priorities, funding issues, changes in funding sources and bring these issues to the Board as needed. 2 A copy of the capital project monitoring procedures (previously included as an attachment to a June 16, 2009 Board agenda item) are provided as an attachment to this abstract as information. FINANCIAL IMPACT: An appropriation of $192,719 of fund balance in the General Fund for transfer to the School Capital Project fund is necessary to complete the funding needed to bring project funding into alignment. RECOMMENDATION(S): The Manager recommends the Board approve Budget Amendment #7-B as outlined below for the County Capital Projects Fund: Budget Amendment 7-B General Fund Expenditures: Transfer to Schools Capital Projects $192,719 Revenues: Fund Balance Applied $192,719 3 Attachment 1 Schools Capital Projects Reconciliation ofUnder-funded Projects as of 6/30/10 Revenues: Under-Funded Projects 50005 Hillsborough Elementary 50006 Orange High School 50008 Stanford Middle School 51011 Technology 51016 Central Elementary Air 54007 Mobile Classrooms Over-Funded Projects 53024 School Other 53050 Morris Grove Elementary 54008 Parking Lot Improvements Net Revenue Under-Funded Expenditures: Prior years project to be closed 51018 Bus Garage Transfer from the General Fund Needed $ 95,000 $ 68,235 $ 190,947 $ 244,099 $ 9,000 $ 15,000 $ 279,904 $ 113,715 S 50.000 $ 622,281 $ 443,619 $ 178,662 $ 14,057 $ 192,719 ~-I~G~c hr~en-~" a 4 Capital Proiect Monitorinu and Administration Procedures I. Capital Proiect Ordinances Abstracts for the adoption of Capital Project Ordinances will clearly explain the purpose of the Capital Project, anticipated timeframe for the project, the revenue sources funding tfie project and the anticipated timing for receiving those revenue sources. Abstracts far Amendments to existing Capital Project Ordinances shall clearly state the reason for the amendment. Project Ordinances will be balanced as to revenue and expenditures. When funding is being moved from one project to another project the term "Transfer to other Project" and "Transfer from other Project" will not be used in Capital Project Ordinances to identify the Source of Revenue in a project or the use of funds. This type of account will not used in MUNIS. The original source of funds (ex. 2001 Bond Funds, AlterriatNe Financing, Transfer General Fund) will be maintained in order to properly idenfrfy and track the type of funds being used. This will also eliminate the use of transfers within the same fund which is not in accordance with Generally Accepted Accounting Principles (GAAP). 11. Contracts related to Capital Projects Departments should not proceed with a capital project until a Capital Project Ordinance is approved which provides adequate funding to proceed. Contracts related to capital projects which are brought to the Board of County Commissioners for approval will be reviewed by the Financial Services Budget Office to determine if there is currently a Capital Project Ordinance in place to totally fund the contract. If sufficient funds are not currently appropriated a Capital Project Ordinance or Amendment will be brought forward to fund the contract at the time the contract is presented to the Board for approval. I11.Reviewing Capital Proiect Activity Departments will be responsible for reviewing the information and financial activity on the Munis system related to their capital projects on a regular basis. Any potential problems identified or questionable transactions should be addressed on ~ a proactive basis. This would include such items as anticipated revenue that is not showing on MUNIS as being received, transactions on Munis for which there are questions, or project budget amounts which do not appear to agree with approved Project Ordinances. The Financial Services Department will review the Capital Project Funds quarterly. Project budgets in Munis will be reviewed by the Budget Office to insure that they agree with adopted ordinances and that budgeted project revenue and expenditures are equal. The projects will also be reviewed for indications of problems such as budgeted revenue which has not been received 5 or potential over-budget conditions. Indicated problems wilt be discussed with the responsible department to determine any action that is needed and who is responsible for taking the action. IV. Closing Capital Project Ordinances Capital Project Ordinances are considered to -be for the life of the project. Projects should be closed out in as soon as possible once the project is completed. For audit and financial 'reporting purposes Capital Project Ordinances and activity have to remain in the financial records till the fiscal year is closed if any activity has taken place during a fiscal year. Active Capital Projects Ordinances will be reviewed by the Financial Services Department after the completion of each fiscal year. A determination will be made in consultation with the responsible Department or School System if there will be any further activity beyond the end of the fiscal year related to the project. Those capita{ projects that will have no further activity will be brought to the Board of County Commissioner for closure of the Capital Project Ordinance: Capital Projects Ordinances which have continual funding through annua{ amendments will be amended to close prior year funding for which activity is completed. V. Use of Capital Project Funds ' Capital Project funding should be used for capital purposes. Exceptions to this would be startup costs associated with new schools. Renovation and major replacements (roofs, HVAC) can be included within the definition, of capital projects however normal ongoing maintenance expenditures are not. Note -these guidelines are to be discussed with the school system staff to arrive at agreement about such things as what should be purchased~from capital funds, the definition of start-up costs, review processes and project closure.