Fiscal Year 2013-2015 Special Budget Meeting

To: Honorable Mayor & City Council Subject: Kids First 3%True-Up Calculation and Adjustment of Proposed Budget for Kids First FY 2013-14 and FY 2014-15 Date: June 18, 2013 !. . ' Page 3 The following table summarizes an update on the estimated budgeted 3% transfer amount and the total Kids First unrestricted revenue 3% allocation: Description FY 2013-14 Estimated Calculation Set-Aside Basis FY 2014-15 Estimated Calculation Set-Aside Basis Unrestricted GPF Revenue Subject to Kids First! Set-Aside $406,054,159 $416,250,516 Total Kids First Unrestricted Revenue Allocation (3%) 12,181,625 12,487,515 Kids First Budgeted Allocation (Transfer) - Proposed Budget 11,763,186 12,125,533 Adjustment to Proposed Budget for Kid's First $ 418,439 $ 361,982 NET Adjustment to FY 2013-15 Proposed Policy Budget for Kid's First: $780,421 The adjustment for the Proposed FY 2013-15 Policy Budget for Kids First is the result of the revised General ;Fund revenue trends as identified in the FY 2012-13 Third Quarter Revenue and Expenditure Report, as,reported during the May 23, 2013 Special Budget Meeting. As reported in the 3'^' Quarter, "The City continues to experience modest economic recovery and growth and, however, anticipated additional expenditures accompany this new revenue ". Staff updated the estimated FY 2013-14 and FY 2014-15 3% Kids First unrestricted General Purpose Fund 3% allocation and:therefore, recommends adjusting the Kids First proposed budget. As indicated above, the City's determination of what constitutes unrestricted General Purpose Fund revenue is based primarily on Generally Accepted Accounting Principles ("GAAP"), and the City Attorney opinions interpreting City Charter Article XIII. During the City Auditor's audit of the Kids First allocation, questions have come up by the City Auditor and the City Administratioii that warranted a request for a review and legal analysis by the City Attomey in which the legal opinions could impact the amount due to Kids First per the Charter. As the issues have been discussed between the City Administration and the City Auditor during the course of the audit, on April 22, 2013, a meeting was held by the City Auditor with representatives from the City Attorney's Office and the City Administration. During the meeting and subsequent follow-iip discussions, the City Administration raised certain issues regarding the Kids First 3% Set-aside calculation and the City Attomey agreed to issue an opinion. The following are some of the items that the City Administration requested for the City Attorney's opinion on Kids First 3% Set-aside calculation that may have an impact on the amount of the final allocation from the City: • Measure Q - Library Services Retention and Enhancement Act - Per City Resolution No. 78223 C.M;S. section 8, "For any year during which this tax is in effect, the City Council may collect this tax only if the General Fund appropriation for Library services is maintained at a.level that is no lower than the General Fund appropriation for fiscal year 2000-OL The.General Fund appropriation for Library services for fiscal year 2000-