Description: AGENDAHED.JPG
  

Item No:                    5B.

 

Meeting Date:           August 26, 2013

 

From:                          William Spinelli, Finance Director, CPA

 

Subject:                      Ordinance Authorizing a one-time waiver of City Ordinance Number 07-81 August 13, 2007, Section 2-233 2, regarding transfers of funds

 

 


Staff Recommendation:

Staff recommends a one-time waiver of City Ordinance Number 07-81 August 13, 2007, Section 2-233 2. regarding transfers of funds

 

Analysis:

The Finance Department requests the City Commission waive the following statement from the ordinance- “In no event may an operating transfer be appropriated from any of the various enterprise funds to the general fund as an operating transfer if such appropriation is projected to result in said fund experiencing a net loss after transfers for that fiscal year.”

 

Both the City’s Electric Utility and Gas Utility Funds are expecting a net loss after operating transfers for the fiscal year ending September 30, 2013.  In both situations, the net losses are due to extraordinary one-time events. 

 

  1. The Electric Utility Fund was required to write-off the old electric meters, which were replaced by the AMI meters in August 2012.  This accounting transaction was a disposal of an asset, which is a non-cash transaction.  The transaction basically fully depreciates the remaining asset value that was left on the City’s books. The Gas Utility Fund was required to make a one-time payment to Cutrale, which was not accounted for until August 2013.  This payment was made to correct billing computation errors in prior years. 

 

These two transactions caused both Utility Funds to have a net loss after transfers.  Both funds would have positive balances without these specific one-time events.  Staff does not see these events recurring in the future. 

 

Options:

1.  Approve the ordinance for the one-time waiver of City Ordinance Number 07-81 August 13, 2007, Section 2-233 2; or,

2.  Such alternative action as the Commission may deem appropriate.

 

 

 

 

Fiscal Impact: 

If the waiver is approved, the General Fund will not have to reimburse both the Gas and Electric Utility funds.  Electric will have transferred approximately $ 5.2 million to the General Fund and Gas will have transferred approximately $ 657,000 to the General Fund at September 30, 2013.

 

 

Submission Date and Time:    8/21/2013 2:11 PM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                 

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _BLM,_____________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _041-1088-581-9101 &

042-2088-581-9101______________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

ORDINANCE NO. ________

 

 

AN ORDINANCE OF THE CITY OF LEESBURG, FLORIDA, PROVIDING FOR A ONE TIME WAIVER OF THE LIMITATIONS ON TRANSFERS TO THE GENERAL FUND FROM THE ELECTRIC AND NATURAL GAS ENTERPRISE FUNDS, WHICH WOULD OTHERWISE BE IMPOSED BY §2 – 233 OF THE CODE OF ORDINANCES; SETTING FORTH LEGISLATIVE FINDINGS; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE.

 

 

            WHEREAS, to preserve the fiscal integrity of its various enterprise funds, the City of Leesburg previously adopted §2 – 233 of its Code of Ordinances, setting forth limitations on the transfer of money from its enterprise funds to the City’s general fund, including a prohibition of any such transfer from an enterprise fund which experiences a net operating loss in the year of the transfer; and

 

            WHEREAS, in fiscal year 2012 – 2013 the City has transferred money into its general fund from both its Electric and its Natural Gas enterprise funds; and

 

            WHEREAS, both these funds will suffer an operating loss in fiscal year 2012 – 2013, due to extraordinary one time events, the Electric Fund from a writeoff of electric meters decommissioned due to replacement by newer AMI meters which generated an accounting loss but without affecting the cash position, and the Natural Gas fund due to a one time payment to a contract customer resulting from an adjustment due to billing computation errors in prior years, neither of which is expected to recur in subsequent years; and

 

            WHEREAS, both the Electric and the Natural Gas funds would have positive balances for the year but for these extraordinary events; and

 

            WHEREAS, both the Electric and the Natural Gas enterprise funds remain fiscally sound despite the operating losses suffered due to these extraordinary events, and are expected to remain so in future years,

 

            NOW THEREFORE, BE IT ENACTED BY THE PEOPLE OF THE CITY OF LEESBURG, FLORIDA:

 

SECTION I.

 

            The City Commission hereby approves a waiver of the transfer policies set forth in §2 – 233 of the Code of Ordinances, for the Electric and Natural Gas enterprise funds, for fiscal year 2012 – 2013 only, allowing those funds to transfer money to the City’s General Fund without regard to the operating losses each suffered due to extraordinary, one time events which are not expected to recur in succeeding years.

 

SECTION II.

 

            The provisions of §2 – 233 of the Code of Ordinances shall remain in full force and effect and shall be binding in all future fiscal years, and for all enterprise funds other than Electric and Natural Gas for fiscal year 2012 – 2013. The Finance Director is instructed to monitor the performance of the Electric and Natural Gas enterprise funds for fiscal year 2013 – 2014 and to recommend such adjustments in the budget as are necessary and desirable to maintain the fiscal soundness of those two funds for this and future fiscal years. The City Commission reaffirms its intention to apply §2 – 233 for its intended, salutary purposes and declares that the waiver provided by this Ordinance is intended only to address peculiar circumstances not expected to occur again in either of the two affected funds.

 

SECTION II.

 

If any portion of this Ordinance is declared invalid or unenforceable, and to the extent that it is possible to do so without destroying the overall intent and effect of this Ordinance, the portion deemed invalid or unenforceable shall be severed herefrom and the remainder of the ordinance shall continue in full force and effect as if it were enacted without including the portion found to be invalid or unenforceable.

 

SECTION III.

 

This Ordinance shall become effective upon its passage and adoption according to law.

 

PASSED AND ADOPTED at the regular meeting of the City Commission of the City of Leesburg, Florida, held on the                   day of                                                 , 2013.

 

 

                                                                                    THE CITY OF LEESBURG, FLORIDA

 

 

 

                                                                                    BY:                                                                 

                                                                                                DAVID KNOWLES, Mayor

 

 

 

 

Attest:                                                                        

            BETTY RICHARDSON, City Clerk