Memorandum 15-074 Funding Public Safety Building

Memorandum 15-074

TO:                       Mayor Wythe and Homer City Council

FROM:                 Katie Koester, City Manager

DATE:                  May 20, 2015

SUBJECT:         Funding Public Safety Building to 35% Design

Ordinance 15-18 authorizes funding for bringing the public safety building to 35% design. The cost to bring this project to 35% design is $663,000, however, there is $50,329 left in the Public Safety Building Project Account that can be used on funding the next phase.

The Council has wisely indicated a desire to ensure State Revenue Sharing is spent on one time capital budget items and not factored into the operating budget. With the state budget in crisis, municipalities have been told revenue sharing could go away. The current proposal is to decrease State Revenue Sharing by 33% starting in FY2017 (see chart from Anderson Group).  This will result in over a $100,000 decrease for the City of Homer in FY2017. While it is wise to not count on State Revenue Sharing to balance the budget given the State’s current fiscal climate, I caution that because Revenue Sharing has been used in the past and currently to balance the budget, appropriating the funds to a capital expense will have an impact on the current 2015 and 2016 budget.

Ordinance 15-18 takes Revenue Sharing from SFY2015 and adds it to SFY2016 Revenue Sharing to come up with the one time funds for 35% design. According to the draft audit there is a surplus from last year’s budget in an amount equal to or greater than the SFY2015 Revenue Sharing payment from the State ($341,037). The City will receive the SFY2016 Revenue Sharing Payment July 1 ($321,468).

Enc:

Memorandum 15-007 from Public Safety Building Review Committee

Community Revenue Sharing Program estimates from Anderson Group