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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 05/05/2020 - FIRST READING OF ORDINANCE NO. 067, 2020 SUSPENDINAgenda Item 7 Item # 7 Page 1 AGENDA ITEM SUMMARY May 5, 2020 City Council STAFF Darin Atteberry, City Manager Lawrence Pollack, Budget Director Travis Storin, Interim Chief Finance Officer John Duval, Legal SUBJECT First Reading of Ordinance No. 067, 2020 Suspending for Fiscal Years 2021 and 2022 the Biennial Budget Term Required by City Code Section 8-1 and Approving the Temporary Revision of the City’s Budgeting Process for the 2021 and 2022 Budgets. EXECUTIVE SUMMARY This item is coming to Council because it meets the following Priority: (2) Emergency-related items that are not as urgent but need Council consideration. The purpose of this item is to acknowledge modifications to the City's biennial budgeting process due to the current unknowns of the depth and duration of the COVID-19 Pandemic and impacts to the local economy and City revenue streams. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION City Charter Article V, Section 2 provides that the City Manager shall file with the City Clerk on or before the first Monday in September preceding each budget term the proposed budget for that ensuing budget term. The City’s budget term was set in City Code Section 8-1 as being two fiscal years, the next of which is for the fiscal years 2021 and 2022 (2021-22 Budget Term). The COVID-19 global pandemic has caused significant turmoil to economies around the globe and is expected to create significant revenue shortfalls for local governments throughout the nation, the depth and duration of which are not currently known. Thus, the City Manager is recommending that Council suspend for the 2021-22 budget term, by the adoption of this Ordinance, the biennial budget term requirement in Code Section 8-1 in order to allow for a one-year budget term for both 2021 and 2022, but to return to the biennial budget term required by Code Section 8-1 beginning with fiscal years 2023 and 2024. The City Manager is also planning to forego using the BFO process for the 2021 and 2022 budget terms and in its place to use a revised budgeting process better suited to addressing the economic uncertainties that now exist because of the pandemic. This revised budget process will still include prioritizing the community’s needs as established by Council in its recent adoption of the City’s 2020 Strategic Plan. This will be done in a way that will strive to support and retain the City’s workforce, provide clear and frequent communications to Council and the community concerning the process, and that will use a variety of budget-balancing strategies, such as Agenda Item 7 Item # 7 Page 2 adjustment to service levels, use of reserves, and the optimal deployment of funds received from the state and federal governments due to the Pandemic. -1- ORDINANCE NO. 067, 2020 OF THE COUNCIL OF THE CITY OF FORT COLLINS SUSPENDING FOR FISCAL YEARS 2021 AND 2022 THE BIENNIAL BUDGET TERM REQUIRED BY CITY CODE SECTION 8-1 AND APPROVING THE TEMPORARY REVISION OF THE CITY’S BUDGETING PROCESS FOR THE 2021 AND 2022 BUDGETS WHEREAS, City Charter Article V, Section 1 provides that the City Council is to set by ordinance the number of fiscal years that shall constitute the City’s “budget term”; and WHEREAS, City Charter Article V, Section 2 provides that the City Manager shall file with the City Clerk on or before the first Monday in September preceding each budget term the proposed budget for that ensuing budget term; and WHEREAS, in 2010, the City’s budget term was set in City Code Section 8-1 as being two fiscal years; and WHEREAS, the City’s next budget term is for fiscal years 2021 and 2022 (the “2021-22 Budget Term”); and WHEREAS, since 2005, the City Manager has used a priority-based budgeting process called Budgeting for Outcomes (“BFO”) to prepare his proposed budget for each budget term, which process provides City Council, as well as the City’s residents and businesses, with transparency in how the City Manager prepares his proposed biennial budgets; and WHEREAS, the COVID-19 global pandemic (the “Pandemic”) has caused significant turmoil to economies around the globe and is expected to create significant revenue shortfalls for local governments throughout the nation, the depths of which are not currently known; and WHEREAS, preparing a budget for a two-year budget term using the BFO process is time-intensive and works most effectively in times of greater economic certainty and stability, which is now not the case due to the Pandemic; and WHEREAS, the City Manager is therefore recommending that City Council suspend for the 2021-22 Budget Term, by the adoption of this Ordinance, the biennial budget term requirement in Code Section 8-1 in order to allow for a one-year budget term for both 2021 and 2022, but to return to the biennial budget term required by Code Section 8-1 beginning with fiscal years 2023 and 2024; and WHEREAS, the City Manager is also planning to forego using the BFO process for the 2021 and 2022 budget terms and in its place to use a revised budgeting process better suited to addressing the economic uncertainties that now exist because of the Pandemic; and WHEREAS, the City Manager is proposing that this revised budget process will include prioritizing the community’s needs as established by City Council in its recent adoption of the City’s 2020 Strategic Plan and to do so in a way that will strive to support and retain the City’s workforce, provide clear and frequent communications to City Council and the community -2- concerning the process, and that will use a variety of budget-balancing strategies, such as adjustment to service levels, use of reserves, and the optimal deployment of funds received from the state and federal governments due to the Pandemic (the “Revised Budget Process”); and WHEREAS, City Council and City staff have a duty to preserve the City’s financial strength and to position it for the future as this nation and community emerge from the effects of the Pandemic during the next two years, which the City Council believes can be best achieved by suspending the biennial budget term requirement in Code Section 8-1 for the 2021-22 Budget Term, and then reinstating the biennial budget term requirement for fiscal years 2023 and 2024; and WHEREAS, the City Council also agrees with the City Manager that it will be in the best interest of the City and its residents for the City Manager to use the Revised Budget Process instead of the BFO process to prepare his proposed budget for the 2021 and 2022 budget terms; and WHEREAS, this Ordinance is necessary for the public’s health, safety and welfare. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Council hereby suspends the biennial budget term requirement in City Code Section 8-1 for the 2021-22 Budget Term and during this period there shall be a one-year budget term for fiscal years 2021 and 2022. The biennial budget term requirement of Code Section 8-1 shall then be reinstated for the fiscal years 2023 and 2024 and all fiscal years thereafter. Section 3. That the City Manager’s use of the Revised Budget Process in place of the BFO process for the 2021 and 2022 budget terms is hereby approved. Section 4. That the City Manager is directed to carefully catalog adjustments to community service levels for ease of communication to the public and to assist City Council in its prioritization of programs when the economy has stabilized and improved. Introduced, considered favorably on first reading, and ordered published this 5th day of May, A.D. 2020, and to be presented for final passage on the 19th day of May, A.D. 2020. __________________________________ Mayor ATTEST: _____________________________ City Clerk -3- Passed and adopted on final reading on this 19th day of May, A.D. 2020. __________________________________ Mayor ATTEST: _____________________________ City Clerk