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Home My WebLink AboutPO 7224: FY23-24 BUDGET AMENDMENT NO. 2 Ene' C,iv of 1, www.PortArthurTx.gov INTEROFFICE MEMORANDUM Date: December 27, 2023 To: The Honorable Mayor and City Council Through: Ronald Burton, City Manager From: Lynda Boswell, Finance Director RE: P.O. 7224—FY23-24 Budget Amendment No. 2 Introduction: A budget amendment is requested to increase appropriations in the General Fund by $130,874, the Capital Fund by $14,200,000, Transit Fund by $7,611, Pleasure Island Fund by $318,000, the Water & Sewer Fund by $382,730, and the CDBG Fund by $1,042,808, the Home Grant Fund by $722,625, the GLO Fund by $34,641,107, the CDBG-R by $10,959,455, Hazard Mitigation Fund by $500,000, ARPA Fund by $118,000 that were approved on the revenue side,and should be now approved on the expenditure side as an additional appropriation. $257,000 is requested to increase the appropriation in General Fund due to Donations received. $48,013,995 is requested to increase the appropriations in CDBG, CDBG-R, General, GLO, Hazard Mitigation, ARPA, Health Grant, and Home Grant Funds due to receipts and approvals of grant funding. $45,722 is requested to increase the appropriation in General Fund due to approvals of grant funding and in-kind. $403,493 is requested to increase the appropriation in General, Transit and Water & Sewer Funds due to settlements received. $118,000 is requested due to a transfer from a grant account to Pleasure Island. $14,200,000 is requested to increase the appropriation in the Capital Fund due to allocating previous years' unspent amounts. Background: The FY 23-24 budget was approved on August 29, 2023 by Ordinance No. 23- 47.Budget amendment 1 passed on October 24,2023 as Ordinance No.23-47. This is the second amendment requested for this budget year. The Capital Fund request for appropriation is presented in P.R. No. 23539. Budget Impact: Increased appropriations in General Fund by $130,874, the Capital Fund by $14,200,000, Transit Fund by $7,611, Water & Sewer Fund by $382,730, and Pleasure Island Fund by$318,000. Adding provisions to the budget for the special revenue funds to include the CDBG Fund by$1,042,808,the Home Grant Fund by$722,625,the GLO Fund by$34,641,107, "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 City of 41/40.0 ort r!![ur www.PortArthurTx.gov the CDBG-R by $10,959,455, Hazard Mitigation Fund by $500,000, and the ARPA Fund by $118,000. Recommendation: The attached Proposed Ordinance No. 7224 amends the budget to provide sufficient funding in the General Fund, the Capital Fund, Transit Fund, Water & Sewer Fund, the Pleasure Island Fund, and adding provisions to the budget for special revenues fund to include the CDBG Fund,the Home Grant Fund,the GLO Fund,the CDBG-R,Hazard Mitigation Fund, and the ARPA Fund. We recommend that the City Council approve it as presented. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 P. O. No. 7224 01/30/2024 lb Page 1 of 4 ORDINANCE NO. AN APPROPRIATION ORDINANCE AMENDING THE CITY OF PORT ARTHUR BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1,2023 AND ENDING SEPTEMBER 30, 2024,INCREASING THE GENERAL FUND BY $130,874, THE CAPITAL FUND BY$14,200,000,THE TRANSIT FUND BY $7,611,WATER& SEWER FUND BY$382,730;PLEASURE ISLAND FUND BY $318,000 AND BY ADDING PROVISIONS TO THE BUDGET FOR SPECIAL REVENUE FUNDS TO INCLUDE THE FOLLOWING: THE CDBG FUND BY $1,042,808, THE HOME GRANT FUND BY $722,625, THE GLO FUND BY $34,641,107, THE CDBG-R BY $10,959,455, THE HAZARD MITIGATION FUND BY$500,000,AND THE ARPA FUND BY $118,000 WHEREAS, in accordance with Article XII, Section 2, of the City Charter, the Director of Finance ensures that budget appropriations are not exceeded; and WHEREAS, the City Council may make budget amendments for municipal purposes under Section 102.010 under the Texas Local Government Code; and WHEREAS,on August 29,2023,the City Council approved and adopted Ordinance 23-34,which appropriated the 2023-2024 budget; and WHEREAS, on October 24, 2023, the City Council approved and adopted Ordinance 23-47, which amended the appropriation of the 2023-2024 budget; and WHEREAS, adding provisions to the budget under special revenue funds that include the CDBG Fund,the CDBG-DR Fund,the Home Grant Fund,the GLO fund, and the ARPA Fund is consistent with the appropriation authority of the City Council; and WHEREAS,the City Council has approved resolutions for revenue which does not require budget amendments; and WHEREAS,the attachment in Exhibit A allows for the increased expenditures due to the receipt of revenue. P. O.No. 7224 01/30/2024 lb Page 2 of 4 NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the following Funds' Budget be increased as shown: General Fund $130,874 Capital Fund $14,200,000 Transit Fund $7,611 Water& Sewer Fund $382.730 Pleasure Island Fund $318,000 Section 3. That the following Funds' Budget be added to include the Special Revenue Funds as shown: CDBG Fund $1,042,808 Home Grant Fund $722,625 GLO Fund $34,641,107 CDBG-DR Fund $10,959,455 Hazard Mitigation Fund $500,000 ARPA Fund $118,000 Section 4. That Section 4 of Ordinance 23-34 is amended to read: That there be and is hereby appropriated the sum of Eighty-Five Million, Nine Hundred Forty Thousand, Three Hundred Twenty Six Dollars ($85,940,326) to the General Fund; Six Hundred Sixty Thousand Dollars ($54,660,000) for the Capital Fund; Three Million, One hundred Fifty Nine Thousand One Hundred Dollars($3,159,100)for the Transit Fund;and Thirty Seven Million, Ninety Five Thousand, Four Hundred Thirty Dollars ($37,950,430) for the Water& Sewer Fund; P. O. No. 7224 01/30/2024 lb Page 3 of 4 One Million, Nine Hundred Sixty Six Thousand, Six Hundred Twenty Five Dollars (1,966,625) for the Pleasure Island Fund; Fifteen Thousand Dollars ($15,000)for the Health Grants Fund; One Million Forty Two Thousand, Eight Hundred Eight Dollars ($1,042,808) for the CDBG Fund; Seven Hundred Twenty Two Thousand, Six Hundred Twenty Five Dollars ($722,625) for the Home Grant Fund; Thirty Four Million, Six Hundred Forty One Thousand, One Hundred Seven Dollars ($34,641,107) for the GLO Fund; Ten Million, Nine Hundred Nine Thousand, Four Hundred Fifty Five Dollars ($10,959,455) for the CDBG-DR Fund; Five Hundred Thousand Dollars($500,000)for the Hazard Mitigation Fund;Fifty Four Million,and One Hundred Eighteen Thousand Dollars ($118,000) for the ARPA Fund,: Original Amended First Amended Second Budget Budget No. 1 Amended Budget No. 2 Amended Ord. 23-47 Appropriation Appropriation General Fund 85,614,452 195,000 85,809,452 130,874 85,940,326 Capital Fund 40,460,000 40,460,000 14,200,000 54,660,000 Transit Fund 3,151,489 3,151,489 7,611 3,159,100 Water&Sewer Fund 36,712,700 36,712,700 382,730 37,095,430 Pleasure Island 1,648,625 318,000 1,966,625 Health Grants Fund 15,000 15,000 CDBG Fund - 1,042,808 1,042,808 Home Grant Fund - 722,625 722,625 GLO Fund - 34,641,107 34,641,107 CDBG-DR Fund - 10,959,455 10,959,455 Hazard Mitigation Fund - 500,000 500,000 ARPA Fund 118,000 118,000 Total Budget Amendment No. 2 $63,038,210 $230,820,476 5. That a copy of the caption of this Ordinance be spread upon the minutes of the City Council. Section 6. That this Ordinance shall be effective immediately. P. O.No. 7224 01/30/2024 lb Page 4 of 4 READ,ADOPTED, AND APPROVED,this day of January, 2024, AD, at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: Ayes: Mayor Councilmembers: NOES: Thurman Bill Bartie, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: Welii(ND Valecia Tizeno, City Attorney APPROVED FOR ADMINISTRATION: Ronald Burton, City Manager Lynda Boswell, Director of Finance MEMORANDUM To: Mayor and City Council 1, 7 I) From: Val Tizeno, City Attorney � Date: January 29, 2024 Re: P.R. #23483 and P.O. #7224 I am writing with regard to two items on the January 30, 2024 agenda. P.O. Number 7224 refers to an appropriation ordinance amending the budget and authorizing an increase in various funds. Specifically, it authorizes an increase in the capital improvement fund by $14,200,000. This appropriation has been requested to accompany P.R. Number 23483, authorizing an agreement in the amount $13,426,347.92 to MK Constructors for the Woodworth Blvd Streetscape Improvements from Lakeshore Drive to State Hwy 87 (Gulfway Drive). Pursuant to Section 2-31(e ) of the Code of Ordinances: "No item can be placed on the agenda for action that: (i) obligates funds that have not been specifically budgeted or funding will be proposed by a budget amendment at the council meeting..." Therefore, P.R. 23483 cannot be considered prior to the passage of a budget amendment at the January 30, 2024 meeting. In the event there is any item listed in the budget amendment ordinance that is not acceptable to the City Council, an additional amendment will be necessary in order to move forward with any remaining items. It is the understanding of this department that the funding source for P.O. 7224 has been stated to consist of money from past certificates of obligation that have not been spent. According to 271.045 of the Texas Local Government Code "a certificate of obligation is a debt instrument issued by a city to " 1. Pay for the construction of a public work, 2. Purchase materials, supplies, equipment and machinery, buildings, land and rights-of way for 1 , Page authorized needs and purposes, and 3. Pay contractual obligations for professional services." Attached hereto is a copy of Article III of the authorization provision in the closing documents. This particular provision states that the obligations to be incurred are for the purpose of"the construction of public works, more specifically, the construction, reconstruction of City streets and other street related improvements, including but not limited to drainage and sidewalks on such street projects, and any items related thereto. A question has arisen regarding the applicability of the language in the Article III to the scope of work set forth in P.R. 23483. Specifically, the provisions regarding use of funds for other street related improvements or any items related thereto has been questioned. It is the position of the legal department that the City must conduct adequate due diligence regarding this issue. It is further recommended that documentation be provided substantiate the use of funds from the certificate of obligation to show that the proposed project precisely meet the standards set forth in the authorization documents. If you have any questions or concerns, I will be available to further discuss this matter. 2 Page Section 2.02 Interest and Sinking Fund. (a) The City hereby establishes special funds or accounts to be designated "City of Port Arthur, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2022'' Interest and Sinking Fund" (the "Interest and Sinking Fund"), said funds to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Certificates when and as due and payable in accordance with their terms and this Ordinance. Section 2.03 Pledge of Revenues. The Surplus Revenues to be derived from the operation of the System in an amount not to exceed Ten Thousand Dollars ($10,000) are hereby pledged to the payment of the principal of and interest on the Certificates as the same come due; provided, however, that such pledge is and shall be junior and subordinate in all respects to the pledge of the Surplus Revenues to the payment of all outstanding obligations of the City and any obligation of the City, whether authorized heretofore or hereafter. which the City designates as having a pledge senior to the pledge of the Surplus Revenues to the payment of the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind payable in whole or in part from the Surplus Revenues, secured by a pledge of the Surplus Revenues that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Surplus Revenues securing the Certificates. ARTICLE III. AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3,01 Authorization. (a) The City's certificates of obligation to be designated "City of Port Arthur, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2022," are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, specifically §271.041-063, Local Government Code, V.T.C.A, as amended, and principal amount of $10,000,000 for the purpose of paying contractual obligations to be incurred for the following purposes, to wit (1) [the construction of public works. more specifically, the construction, reconstruction of City streets and other street related improvements including but not limited to drainage and sidewalks on such street projects, and any items relaxed thereto]; (2) payment of contractual obligations for professional services incurred in connection with item (1); and (3) payment of the costs incurred in connection with the issuance of the Certificates. (b) The issuance of the Certificates is hereby authorized under and in accordance with the provisions hereof, the officers of the City are each hereby authorized to execute, attest, and affix the City's seal to the Certificates and to deliver A-6 #I76264828 v3 Exhibit A Page 1 Reference Fund Amount Increase Fund Number Description 23-451 General Fund $ 7,000.00 1 Donation 23-479 General Fund $ 50,000.00 1 Donation 23-350 Pleasure Island $ 200,000.00 450 Donation Transfer ARPA $ 118,000.00 169 Grant 23-389 CDBG $ 1,042,808.00 105 Grant 23-484 CDBG-DR $ 10,959,455.00 148 Grant 23-554 General Fund $ 10,000.00 1 Grant 23-559 General Fund $ 5,000.00 1 Grant 23-485 GLO $ 34,641,107.00 145 Grant 23-484 Hazard Mitigation $ 250,000.00 154 Grant 23-485 Hazard Mitigation $ 250,000.00 154 Grant 24-008 Health Grants $ 15,000.00 101 Grant 23-474 Home Grant $ 603,125.00 108 Grant 23-565 Home Grant $ 11,500.00 108 Grant PR-23563 Home Grant $ 108,000.00 108 Grant 23-370 General Fund $ 24,449.00 1 Grant& In-kind 23-414 General Fund $ 21,273.00 1 Grant& In-kind 23-391 General Fund $ 6,622.00 1 Settlement 23-407 General Fund $ 6,530.00 1 Settlement 23-537 Transit $ 7,611.00 401 Settlement 23-388 Water&Sewer $ 382,730.00 410 Settlement Transfer Pleasure Island $ 118,000.00 450 Transfer from ARPA PR-23539 Capital $ 14,200,000.00 307 Unallocated $ 63,038,210.00 Exhibit A Page 2 Amended Budget First Amended Amended Budget Second Amended Original Budget No. 1 Ord.23-47 Appropriation No.2 Appropriation General Fund 85,614,452 195,000 85,809,452 130,874 85,940,326 Capital Fund 40,460,000 40,460,000 14,200,000 54,660,000 Transit Fund 3,151,489 3,151,489 7,611 3,159,100 Water&Sewer Fund 36,712,700 36,712,700 382,730 37,095,430 Pleasure Island Fund 1,648,625 - 1,648,625 318,000 1,966,625 IHealth Grants Fund - - - 15,000 15,000 CDBG Fund - - 1,042,808 1,042,808 Home Grant Fund - 722,625 722,625 GLO Fund - 34,641,107 34,641,107 CDBG-DR Fund 10,959,455 10,959,455 Hazard Mitigation Fund - 500,000 500,000 ARPA Fund - - - 118,000 118,000 1 Total 167,587,266 195,000 167,782,266 63,038,210 230,820,476