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THE CITY OF 11 ;:;_;;; 213 , II CITY COUNCIL AGENDA REPORT PLE ASANTON March 2, 2021 Finance TITLE: ADOPT A RESOLUTION ACCEPTING THE MIDYEAR FY 2020/21 OPERATING BUDGET AND AMENDING THE FY 2020/21 OPERATING BUDGET ACCORDINGLY SUMMARY The City follows a three-step operating budget process that starts with the approval of a two-year Operating Budget (Budget); then after the first year of the Budget, the adoption of a Midterm Budget; and the adoption of Midyear Budget adjustments during each of the two years of the Budget. This report is the Midyear Budget report for the second year of the Budget that recommends adjustments to the FY 2020/21 Midterm Operating Budget adopted by the Council on June 16, 2020. While these recommended changes primarily affect the General Fund, Water Fund, Sewer Fund, Golf Fund, Cemetery Fund and Internal Services funds, minor adjustments are also recommended to the Special Revenue Funds. Included in the recommended Midyear Budget adjustments are recognition of grant funds, Council actions, and other Budget adjustments that have occurred since the adoption of the Operating Budget on June 16, 2020. A complete analysis of the adjustments for all funds is included in Appendix A. In summary, General Fund revenues are projected to be $9 million less than originally projected that staff is recommending to cover through expenditure reductions, reduced allocations to the Capital Improvement Fund Reserve (CIPR) and Repair and Replacement funds, and use of the City's Rainy Day Fund. RECOMMENDATION Adopt the attached resolution approving Midyear adjustments to the FY 2020/21 Budget. FINANCIAL STATEMENT The recommended adjustments to various funds and the financial impact to each fund are outlined in Appendix 1. The discussion section of this report also summarizes the recommended adjustments and their respective impact to the Budget and fund balances.