06-16-2020 - AGENDA ITEM 09 CONSIDERATION OF BUDGET AMENDMENT FOR FISCAL YEAR 2019-2020AGENDA ITEM NO.9
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AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: June 16, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: CONSIDERATION OF BUDGET AMENDMENT FOR FISCAL YEAR 2019-2020
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO.2020-66 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, ADOPTING A BUDGET AMENDMENT FOR THE FISCAL YEAR
COMMENCING JULY 1, 2019 AND ENDING JUNE 309 2020
DISCUSSION:
General Liability
The City's general liability program experienced several unanticipated claims that resulted in significant legal and
settlement costs to the City. Of particular note, the City recently settled three (3) high exposure tort claims that
totaled $3,400,000 in legal and settlement costs. The cost for these three (3) claims depleted the general liability
program budget and resulted in an immediate budget deficit of approximately $772,800. These three (3) claims
were anomalies and their impact on the current fiscal year budget could not be anticipated.
The City's workers' compensation program also experienced an increased in the number of claims paid and medical
expenses that has caused a budget deficit of approximately $326,000.
Due to these unanticipated expenditures, staff is requesting a general fund appropriation of $1,132,800 to cover the
City's general liability, workers' compensation programs and expenses/invoices in Human Resources for the July 1,
2019 through June 30, 2020 period.
This appropriation will cover the following:
$772,800 - Appropriation needed to cover General Liability program budget deficit.
$326,000 - Appropriation needed to cover Workers Compensation program budget deficit.
$34,000 - Appropriation needed to cover expenses/invoices in Human Resources through - June 30, 2020.
City Clerk
During the year 2018 the City contracted with National Demographics Corporation to assist the City with basic
districting project elements including project setup and coordination, plan development, plan presentation, and
implementation with the County Registrar's Office. National Demographics Corporation created a "Public
Participation Kit" for public use and attended five Council Meetings. A purchase order was established and
subsequently canceled, and this invoice was not processed for payment. Attached is a budget amendment request to
cover the cost of this invoice.
$40,000 - Appropriation needed to cover City Council Districting invoice
Prepared by: Helen Tran, Director Human Resources/Risk Managment
Fiscal Impact
FISCAL IMPACT:
This appropriation of funds will require a withdrawal of $1,172,800 from the City's general fund reserves. The
appropriation will be allotted as follows:
$1,132,800 - For unanticipated general liability, workers' compensation and Human Resources expenses.
$ 40,000 - For unanticipated City Council Districting expenses.
Staff recognizes that this appropriation will result in a significant reduction in the City's general fund reserve and
is actively working to mitigate future impacts.
Attachments
Attachment No. 1 - Resolution No. 2020-66 Approving Appropriation of Funds and Budget Amendment
Attachment No. 2 - Budget Amendment Expenditures Human Resources
Attachment No. 3 - Budget Amendment Expenditure City Clerk
CITY COUNCIL GOALS & OBJECTIVES: Achieve Fiscal Sustainability and Financial Stability
ATTACHMENT NO. 1
RESOLUTION NO.2020-66
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WEST COVINA, CALIFORNIA, ADOPTING A BUDGET
AMENDMENT FOR THE FISCAL YEAR COMMENCING JULY
1, 2019 AND ENDING JUNE 30, 2019.
WHEREAS, the City Manager, on or about June 2020, submitted to the City Council a proposed
budget for the appropriation and expenditure of funds for the City of West Covina for Fiscal Year 2019-
2020; and
WHEREAS, following duly given notice and prior to budget adoption, the City Council held
public meetings, considering and evaluating all comments, and adopted a budget for the fiscal year
commencing July 1, 2019 and ending June 30, 2020; and
WHEREAS, amendments must periodically be made to the budget to conform to changed
circumstances following adopting of the budget.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the budget amendments for Fiscal Year 2019-2020 are hereby approved as
reflected in Exlubit 1 and Exhibit 2 attached hereto.
SECTION 2. That this resolution shall be effective immediately upon passage of adoption.
SECTION 3. The City of West Covina's Clerk shall certify to the adoption of this Resolution.
APPROVED AND ADOPTED this 16th day of June, 2020.
Tony Wu
Mayor
APPROVED AS FORM ATTEST
Thomas P. Duarte Lisa Sherrick
City Attorney Assistant City Clerk
I, USA SHERRICK, ASSISTANT CITY CLERK of the City of West Covina,
California, do hereby certify that the foregoing Resolution No. 2020-42 was duly adopted by the City
Council of the City of West Covina, California, at a regular meeting thereof held on the 19th day of
May, 2020, by the following vote of the City Council:
AYES:
NOES: ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk
ATTACHMENT NO. 2
CITY OF WEST COVINA
BUDGET AMENDMENT
Date: 6/16/2020
Requested by: Helen Tran
Dept/Div: Human Resources
EXPENDITURES
BA #
Posted By:
Date Posted:
Fiscal Year: 2019-20
Amount: $1,132,800.00
Description: Appropriation for Human Resources
Account Number
Dept/Account Description
Current Budget
Proposed
Amendment
Amended Budget
363.15.1520.6419
Claim Paid
400 000.00
226 000.00
626 000.00
363,15.1510.6511
Workers Comp Medical
325 000.00
100 000.00
425 000.00
361.15.1520.6111
Legal Services
650 000.00
200 000.00
850 000.00
361.15.1520.6419
Claims Paid
908 100.00
572 800.00
1,480,900.00
110.14.1410.6110
Professional Services
153 945.00
20 000.00
173 945.00
110.14.1410.6111
Legal Services
25 000.00
5,000.00
30 000.00
110.14.1410.6342
Benefits Admin Fees
55 000.00
9,000.00
64 000.00
REVENUES
Account Number
Account Description
Current Budget
ropose
Amendment
Amended Budget
APPROVALS
City Council Approval Date (if required, attach minutes):
Dept Head Approval:
Date:
Finance Director: Date:
Funds Available? ❑ Yes ❑No
❑ Approval Not Required
City Manager: Date:
(If over $100,000)
❑ Approved ❑Denied
BA *
CITY OF WEST COVINA Posted By:
BUDGET AMENDMENT Date Posted:
Date: 5/9/2020 Fiscal Year: 2019-20
Requested by: Lisa Sherrick Amount: $40,000.00
Dept/Div: City Clerk Description: Service Contracts
FXPFNnTT11RFC
Account Number
Dept/Account Description
Current Budget
Proposed
Amendment
Amended Budget
110.12.1210.6130
Service Contracts
24 155.00
40 000.00
64 155.00
REVENUES
ropose
Account Number Account Description Current Budget Amendment Amended Budget
APPROVALS
City Council Approval Date (if required, attach minutes): ❑ Approval Not Required
Dept Head Approval:
Date:
=inance Director: Date:
=unds Available? ❑ Yes ❑No
:ity Manager: Date:
if over $100,000)
❑ Approved ❑ Denied