• Budget adjustments are made each year to reflect changes in revenues and expenditures that occur after the biennial budget is adopted.
• This supplemental budget is mostly administrative in nature. It includes a total increase in the City’s 2020 appropriation of $50.4 million.
• The supplemental budget also includes a total increase of 0.75 FTEs, supported by grant revenue.

The first supplemental budget of 2020 includes mostly administrative, grant funded items and an appropriation to refinance one current bond issue in 2020 at lower rates.

The recommended expenditure appropriation increase for the City’s Operating and Capital funds included in the 2020 First Supplemental Budget totals $50.4 million. Of this amount, $45.0 million is related to the Operating budget, and $5.4 million relates to changes in the Capital budget and supporting transfers. The net impact on all City resources is a decrease of $2.5 million in the City’s resources; the net impact on the General Fund is a $5 million decrease to the fund balance.

The total Operating budget appropriation change in the General, Street and Fire funds represents an increase of $19.0 million. The remaining $26.0 million increase relates to changes in other funds.

Cost-neutral appropriation adjustments include the following major items:

• Appropriation increase funded by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding, including new to the City COVID-related leave costs, additional janitorial costs for all City facilities and vehicles, information technology related costs to accommodate City staff working remotely, building modifications to enhance employee and customer safety and costs of managing this prolonged emergency. The total cost related to the General Fund is $4.3 million, with the balance of the $5.6 million funding going to other City operating funds that have incurred those costs and are anticipated to incur costs through the end of October 2020.
• Appropriation increase of $0.8 million funded by a state grant to cover pre-construction costs of the ground floor commercial space for a new building located in the Fourth Plain corridor. The building will serve as an incubator for developing future businesses in the corridor.
• Appropriation increase of $0.8 million funded by the Assistance to Firefighters (AFG) federal program to purchase replacement personal self-contained breathing apparatus (SCBA) units that are nearing their useful life.
• Numerous other minor Fire grants totaling $0.6 million including Hazmat training and the program Project Home Safe focused on fire prevention.
• Funding from the Clark County Fire District 5 of $0.6 million to continue Fire Academy for the remainder of 2020.
• Numerous Police grants totaling $0.7 million, including a new grant to enhance mental health field response in partnership with SeaMar.
  
  

Major administrative adjustments include:

• Additional budget to cover the cost of labor contract settlements in Fire totaling $3.1 million mostly attributed to increase in the cost of overtime resulting from a change in the length of the work week, cost of leaving adjustments for 2020 and the increased cost of health care coverage. The cost increase in Fire is funded by an increased transfer from the General fund.
• True-up of departmental budgets for grounds and facilities work totaling $2.7 million. This dollar amount represents a two-year catch up in cost reimbursement for facilities and grounds maintenance.
• An accounting adjustment of $2.6 million to record the capital lease obligation for the new Police Headquarters building.
• A one-time increase in energy costs budget resulting from the delays in the LED streetlightreplacement project of $0.9 million. The project is on track to be completed in August of 2020, so the savings will be reflected in the 2021 budget.
  
  

The remaining total of $26.0 million in appropriation increase relates to changes in other operating City funds. Major changes are summarized below:

• An accounting adjustment of $11.4 million, resulting from the updated way of reporting the school impact fees that the City collects on behalf of the school districts. A recent change in Governmental Accounting Standards Board resulted in the need for the City to reflect School Impact Fees as revenues and expenditures in the City’s General Ledger. The result is the need to increase an appropriation for a two year time period by $11.4 million. There is no net impact from this change to the City.
• The recessionary environment has created an opportunity to refinance one of the outstanding City bonds at lower rates. The supplemental includes an appropriation increase of $8.05 million to refund the bonds. The City is anticipated to realize significant savings of $2.3 million, (or $2.1 million in net present value (NPV)) over the remaining life of the bonds.
• An administrative budget true-up in Storm Water City Utility tax payment to General Fund of $1.1 million, reflecting actual appropriation need.
• Additional budget of $0.8 million in the Community Development Block Grant (CDBG) fund, funded by the CDBG - CV CARES Act grant allocation.
• Other grant related increases totaling $0.9 million across CVTV, CDBG and Solid Waste’s Talking Trash programs.
  
  

The total Capital Budget appropriation of $5.4 million (including internal transfers) is included in the First Supplemental of 2020. Expenditures by project are outlined in Attachment C to the ordinance. Following are some major projects included by functional area:

• General/Facilities major capital projects totaling $2.7 million

• $0.5 million to replace roofs on Officer’s row offset with a grant from the Washington State Historical Society.
• Pearson Airport taxiway and Apron Rehabilitation project funded fully with federal aviation and CARES grants of $1.7 million.
• Land Bridge Maintenance project of $0.5 million, funded by the franchise fees from the Historic Trust.

• Parks capital projects totaling $1.2 million for:
  
  • True-up of the Dubois and Summers Walk projects totaling $0.3 million funded with parks impact fees.
  • True-up of $0.9 million for North Image Neighborhood Park Expansion funded with parks impact fees.
• Transportation capital projects changes totaling $1.2 million include:
  
  • A reduction of $2.9 million in a number of projects due to the impact of the passing of the I-976 initiative. Major projects impacted are:
    
    • Traffic Signal and Lighting Sustainability of $0.9 million
    • Transportation System Plan Update of $0.6 million
    • NE 18th St – 97th Ave to 107th Ave of $0.5 million
    • Non-Programmed Safety reduction of $0.2 million
    • Evergreen Highway Trail Phase II and Chelsea to Image reduced by $0.1
  • An increase to current projects totaling $4.0 million is highlighted:
    
    • SE 1st St – 164th to 192nd of $2.0 million, funded by the Transportation Benefit District
    • Devine Pedestrian Improvements - Mill Plain to 18th of $1.0 million, fully funded by a grant from the Transportation Improvement Board (TIB) and a state grant for pedestrian safety.
    • NW Neighborhood Connectivity (NW 43rd Street to NW 53rd Street Lincoln Sidewalks) of $0.5 million, funded by a federal grant for the construction phase.
    • Mill Plain Blvd – 104th to NE Chkalov Dr. of $0.4 million being funded by the pavement management program.
• Appropriation adjustments totaling $0.8 million in Surface Water projects all supported by grant funding. The largest of those is a grant for $0.4 million for improving water quality and habitat conditions in the Burnt Bridge Creek watershed with support from the Lower Columbia Fish Recovery Board Grant.
  
  

Attachment B of the ordinance outlines changes to FTEs, with an overall increase of 0.75 FTE recommended in the First Supplemental of 2020. Major changes from the Attachment B are listed below:

• Extend 0.75 limited-term FTE to support Commute Trip Reduction program supported by grant revenue. The grant funding was renewed through June 2021.
• Transfer of 1.0 limited term FTE (Code Compliance Officer), created as a new position in the 2019-2020 budget as part of HART team, from the Community & Economic Development Department to Public Works.

1. The proposed budget adjustments will ensure that the City remains in compliance with state statutes that require all City expenditures to have an appropriation approved by ordinance.
2. Appropriations are provided for important City programs, services, and capital projects.