M&C Review


COUNCIL ACTION:  Approved on 11/14/2017 - Ordinance No. 22993-11-2017

DATE: 11/14/2017 REFERENCE NO.: **G-19163 LOG NAME: 13GENERAL DEBT SERVICE FUND APPROPRIATION ORDINANCE
CODE: G TYPE: CONSENT PUBLIC HEARING: NO
SUBJECT:   Authorize Adoption of a Fiscal Year 2017 Appropriation Ordinance Increasing the Estimated Receipts and Appropriations in the General Debt Service Fund in the Amount of $573,972.00 (ALL COUNCIL DISTRICTS )

RECOMMENDATION:

It is recommended that the City Council adopt the attached ordinance increasing Fiscal Year 2017 estimated receipts and appropriations in the General Debt Service Fund in the amount of $573,972.00 to make a transfer to the Culture and Tourism Debt Service Fund and correct a misallocation of payments on the Series 2013 and Series 2015 general obligation bonds in prior Fiscal Years.

 
DISCUSSION:

In preparation for the annual external audit and publication of the Comprehensive Annual Financial Report, the Financial Management Services Department completed a review of outstanding debt liabilities across all funds as part of its year-end review.  As a result of these activities, it has been determined that actual debt service payments made on the Series 2013 and Series 2015 GO bonds were misallocated between the General Debt Service Fund and the Culture and Tourism Debt Service Fund which are pledged to support the debt.  The misallocation resulted in the Culture and Tourism Debt Service Fund overpaying for debt by the recommended amount through the end of Fiscal Year 2017.  An accounting entry was made to 2017 current year payments to correct the prior misallocation, using general debt service fund balance that had accrued as a result of the fund's prior underpayment in order to make the Culture and Tourism Debt Service Fund whole.

It is important to note that while debt service payments on the respective series were misallocated among various participating funds and accounts, the sum of all debt expense equaled what was due and payments were made in a timely fashion.  Additionally, the series 2013 and 2015 GO bonds are considered governmental debt for which liability is aggregated rather than being reported on a fund-by-fund basis.  Thus in prior year CAFRs, reporting of the total year-end liability for each series of debt was not inaccurately reported.

Adoption of the attached appropriation ordinance supports the correcting accounting entry and will bring the net position/fund balance and liabilities for each of the affected funds into correct balance as of 2017 Fiscal Year end.  Steps have been taken to ensure the misallocation of payments does not occur in the future.  Internal debt service schedules have been updated to reflect correct amounts, and the debt service payments reflected in the 2018 budget are accurate.

This M&C does not request approval of a contract with a business entity.






 
FISCAL INFORMATION/CERTIFICATION:

The Director of Finance certifies that upon approval of the above recommendations, funds will be available in the Fiscal Year 2017 General Debt Service Fund, as appropriated.

TO
    Fund Department
ID
Account Project
ID
Program Activity Budget
Year
Reference #
(Chartfield 2)
Amount
1) 40100 0132000 5810100           $533,134.00
1) 40100 0132000 5810200           $18,015.47
1) 40100 0132000 5810300           $3,500.00
1) 40100 0132000 5810303           $19,322.34

FROM
    Fund Department
ID
Account Project
ID
Program Activity Budget
Year
Reference #
(Chartfield 2)
Amount

Submitted for City Manager's Office by:
Susan Alanis (8180)
Originating Department Head:
Aaron Bovos (8517)
Additional Information Contact:
Alex Laufer (2268)

 
 
ATTACHMENTS
  cl dm General Debt Service AO.docx