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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/19/2002 - FIRST READING OF ORDINANCE NO. 173, 2002, APPROPRI AGENDA ITEM SUMMARY ITEM NUMBER: DATE: November 19, �OQ"' FORTCOLLINS CITY COUNCIL STAFF: Alan Krcn SUBJECT: First Reading 3f Ordinance No. 173, 2002, Appropriating Unanticipated Revenue in the `,, and Use Tax Find for a Change in Accounting Practices. RECOMMENDATION: Staff recommends adoption of the Ordinance on First Reading. FINANCIAL IMPACT: There is no fir ancial impact to the City by adoption of this Ordinance. The Ordinance proposes a change in accounting practices recommended by the external auditors. While appropriations and correspo ding expenditures will increase on the books, there will be no "real' money collected or di tributed by the City. EXECUTIVE SUMMARY: Each year the City prepares an annual financial report that is audited by an independent firm. In the 2001 Management Report from Bondi & Co LLP, the auditors recommended that collection fees be included in the gross revenue of the City. Staff has made adjustments to account for the collection fees that the Larimer County Treasurer retains in the collection of property taxes. In further discussions with the auditors, the principle applies to other revenue sources. Businesses retain a portion of sales taxes and the County Treasurer retains a portion of use taxes paid when vehicles are registered. This Ordinance estimates the amount of these fees and appropriates them to properly account for the transaction. ORDINANCE NO. 173, 2002 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING UNANTICIPATED REVENUE IN THE SALES AND USE TAX FUND FOR A CHANGE IN ACCOUNTING PRACTICES WHEREAS, each year the City of Fort Collins prepares an annual financial report that is audited by an independent auditing firm; and WHEREAS, the City's independent auditing firm, Bondi & Co. LLP, has recommended a change in accounting practices which affects how the City records sales and use tax revenue received; and WHEREAS,the change in accounting practices requires the City to record the gross amount of revenue received and record any fees on this revenue as an expense; and WHEREAS,this change in accounting practices requires an increase in appropriations which is offset by an increase in the sales and use tax revenue collected,but does not change the net amount of sales and use tax revenue received by the City; and WHEREAS,Article V,Section 9, of the Charter of the City of Fort Collins permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year, provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year,does not exceed the then current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, City staff has determined that the appropriation of the unanticipated revenue, as described herein, will not cause the total amount appropriated in the Sales and Use Tax Fund to exceed the current estimate of actual and anticipated revenues to be received in that fund during any fiscal year. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated from unanticipated revenue in the Sales and Use Tax Fund the sum of ONE MILLION TWO HUNDRED SEVENTY THOUSAND DOLLARS ($1,270,000) for expenditure in the Sales and Use Tax Fund for a change in accounting practices. Introduced and considered favorably on first reading and ordered published this 19th day of November, A.D. 2002, and to be presented for final passage on the 17th day of December, A.D. 2002. Mayor ATTEST: City Clerk Passed and adopted on final reading this 17th day of December, A.D. 2002. Mayor ATTEST: City Clerk