At the regularly scheduled meeting of February 25, 2003, the City Council considered RTC #03-071 and Budget Modification No. 34. In that report staff recommended that Council approve 1) service level adjustments to save an estimated $537,281 and 2) the appropriation of $587,216 in Asset Forfeiture reserve monies. Both of these actions were proposed to cap a projected 2% year-end budget overrun by the Department of Public Safety. Council approved the budget modification to appropriate additional asset forfeiture funds, but did not approve the proposed service level reductions. Rather than adjusting service levels, Council directed the City Manager to identify an alternative funding source.

Staff recommends Alternative 1, appropriation of $537,281 from the Fiscal Uncertainties line item of the General Fund.

Staff reviewed a number of other potential sources of funding, including the Paramedic Services Set-Aside and the Non-Recurring Events Reserve, but concluded that use of Fiscal Uncertainties is the most appropriate source of funding to help offset the Department of Public Safety’s estimated budget overage. The Non-Recurring Events Reserve was created in part to fund specific one-time capital/special projects, while the Paramedic Services Set-Aside dollars are earmarked for ongoing costs associated with emergency medical services.

The Fiscal Uncertainties line item in the General Fund Long-Term Financial Plan reflects the "elbow room" which the City has to absorb any negative fiscal changes that occur during the course of any given fiscal year. The City began FY 2002/2003 with approximately $900,000 for fiscal uncertainties. Since the start of the fiscal year, Council has appropriated fiscal uncertainties dollars to help offset unbudgeted salary increases, the senior center lease increase, the September 11^th Commemorative Event, the Connected Communities Initiative and Council/staff cooperative consulting. The current balance for the Fiscal Uncertainties line item is $585,026. An additional appropriation of $537,281 to increase the Public Safety base budget in this fiscal year will reduce the Fiscal Uncertainties line item to $47,745.

Available Fiscal Uncertainties dollars will be reduced from $585,026 to $47,745, as outlined in the following Budget Modification:

Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.

Alternative 1, approval of Budget Modification No. 37.