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HomeMy WebLinkAbout2009-05-27 09-180 ORDERCOUNCIL ACTION Item No. 09 I S 0 Date: 05-27-2009 Item/Subject: Order, Authorizing the Transfer of Unexpended Energy Appropriations within the General Fund to Partially Fund the Costs Associated with the City's Energy Conservation Projects Responsible Department: Finance Commentary: The City, through an energy performance contract with Honeywell, has implemented a wide variety of energy saving measures in its various facilities with the intent of reducing both our environmental footprint and operating costs. Within the General Fund, $1.2 million in projects have been completed and will be paid for through a lease/purchase arrangement previously approved by the Council. The City's FY09 budget was significantly impacted by the high energy costs in place at the time it was adopted. Since then, a combination of the energy conservation steps that have been taken and a dramatic decline in energy prices has produced significant savings over the amounts budgeted this year. In order to speed the positive operating impact of these energy conservation project on future years' budgets, it has been suggested that this budget year's savings be used to lower the $1.2 million the City will be financing for our general fund projects. This order will do so by transferring energy savings from the various departments, subject to two restrictions. First, the amount transferred from any individual department may not be any larger than the amount by which that department finishes the year below its total expenditure budget. Second, the total amount to be transferred within the general fund will be reduced by the amount, if any, that total General Fund revenues fall short of budget. This will ensure that the transfer of these funds will not result in any department over expending its budget and that any General Fund revenue shortfall will also be recognized. Department Head Manager's Comments: > City Manager Associated Information: Budget Approval: Finance Director Legal Approval: City Solicitor Introduced for X Passage First Reading Page _ of _ Referral 3:9 :�80 Assigned to Councilor Nealley May 27, 2009 CITY OF BANGOR (TITLE.) Order, Authorizing the Transfer of Unexpended Energy Appropriations within the General Fund to Partially Fund the Costs Associated with the City's Energy Conservation Projects WHEREAS, as part of the Fiscal Year 2009 budget, the City Council voted to increase the tax levy above the property tax levy limit, as calculated under 30-A MRSA Section 5721- A, due to an unprecedented increase in fuel prices; and WHEREAS, during Fiscal Year 2009, the City completed a number of energy conservation projects through an agreement with Honeywell; and WHEREAS, as a result of the reduction in energy use realized from these projects and the decline in the actual per unit cost of natural gas, heating fuel, and diesel and unleaded gasoline experienced during the year, considerable savings were achieved from the amounts actually budgeted; and WHEREAS, the Council has previously approved financing the cost of these energy conservation projects through a lease/purchase agreement in the amount of $1.2 million; and WHEREAS, the amount to be lease/purchased can be reduced by applying energy cost savings realized to date against the capital cost of these projects, thus reducing interest costs and lowering annual principal payments; and WHEREAS, such an approach will allow the City to more rapidly see the impact of these changes on our overall budget; NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT the Finance Director is hereby authorized to transfer unexpended energy appropriations within the General Fund to the necessary account to be used to partially fund the costs associated with the City's energy conservation projects, provided that: 1. the total amount of such transfer does not create an over expenditure of the total authorized departmental appropriation of any department from which such a transfer shall be made; and 2. the amount to be transferred shall be reduced by the amount, if any, that actual total General Fund revenues do not meet the City's Fiscal Year 2009 budget. IN CITY COUNCIL MAY 27, 2009 (TITLE,) Authorizing the Transfer of Unexpended Energy Appropriations W; hin the General Find to Partially Fund the Costs Associated.with the City's _F.aezox ramcorvati an PP nj prtg Assigned to Councilor