2024-52 An Ordinance Amending the 2023 Budget Reconciliation Ordinance of the City of Decatur, Illinois and Closing Fund 99

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Financial Management DATE: 4/15/2024 MEMO: TO: Honorable Mayor Moore Wolfe and City Council Members FROM: Scot Wrighton,City Manager Ruby James,City Treasurer&Chief Financial Officer SUBJECT: An Ordinance Amending the 2023 Budget Reconciliation Ordinance of the City of Decatur,Illinois and closing Fund 99 SUMMARY RECOMMENDATION: City Administration recommends City Council approve moving the revenue replacement unrestricted funds back to the designated Council purposes based on its 2021 and 2022 ARPA allocation decisions, as amended. Furthermore, since the Federal American Rescue Plan Act (ARPA) funds have been fully expended based on Treasury Department regulations, and reports filed with the Federal grant agency,the ARPA fund,Fund 99 will be closed as required by the auditors. BACKGROUND: Revenue Replacement Funds Returned City Council adopted the Fiscal Year 2023 Budget and Appropriation Ordinance on December 5, 2022 for the purpose of defraying the expenses of certain departments and funds of the City of Decatur for the fiscal year beginning January 1,2023 and ending December 31,2023. On June 20, 2023 for Fiscal Year 2023, the City Council approved an ordinance to amend the 2023 budget for the fiscal year that ended December 31,2023. On December 18,2023 for Fiscal Year 2023,the City Council approved an ordinance to amend the 2023 budget to reconcile the budget and appropriate additional funds for operational expenditures for the City to effect provision of services to its citizens which were not anticipated at the time of adoption. Passage of a budget reconciliation ordinance every December is a regular part of closing out and properly ending a fiscal year. On February 5,2024 for Fiscal Year 2023,the City Council approved an ordinance to amend the 2023 budget and close-out and finalize the reconciliation of the fiscal year that ended December 31,2023. To fully close out FY2023 and final ARPA accounting, the City Council will need to amend the 2023 Budget Reconciliation Ordinance again to allocate the revenue replacement funds back to the original purposes designated by the City Council. These funds are unrestricted in purpose and reside in the general fund. The ARPA grant purposes have been fulfilled for revenue replacement and now are to be spent as originally designated by Council. These are not new funds, but simply using the unrestricted funds as originally intended after the grant restrictions were fulfilled for public safety in fire and police salaries per Ordinance 2023-62. Some of the expenses have already been spent in the general fund and other expenses have been spent in other funds. Most of the$8.5 million in transfer was spent in FY2023. Remainingunrestrictedfunds allocated Of the $2,228,391 transferred back to the ARPA grant fund (Fund 99), FY2023 public safety spending from ARPA funds was $599,544 after audit adjustments. This leaves $1,628,847.71 remaining to be allocated. Since the ARPS grant funds have been spent and filed with the Federal grant agency,the ARPA fund must be closed out and all the funds must be distributed with the FY2023 audit. Of the $1.628.847.71 remaining balance in the ARPA fund. $600.000 has alreadv been allocated by City Council for the second