Over the past months, Town Council has considered the Proposed Fiscal Year 2021 Fiscal Plan & Capital Improvement Program Fiscal Year 2021-2025 (“FY 2021 Budget”) (Attachment 1), which was prepared in accordance with Code of Virginia, Section 15.2-2503 and delivered to Town Council on March 18, 2020.  The Town Manager also posted the Proposed FY 2021 Budget on the Town’s website on March 18, 2020.  The Town advertised a brief synopsis of the FY 2021 Budget in The Loudoun Times-Mirror on April 24, 2020 and May 1, 2020, and held a public hearing on May 12, 2020, all in accordance with state law.

During the review period, Town Council considered the FY 2021 Budget as proposed by the Town Manager and directed that certain changes be made from the proposed total budget of $21.7 million to a revised annual budget estimate of $20.2 million in total expenditures; a 15 percent decrease in the budget.  Furthermore, given the extraordinary circumstances and fiscal uncertainty associated with the COVID-19 crisis, the Town Manager in concert with the Town Council recommend limiting the initial FY 2021 appropriation to $5.046 million for FY 2021 First Quarter expenditures.  An additional appropriation for the balance of FY2021 expenditures will be revisited with applicable public hearings and deliberations around August through September 2020 allowing for adoption prior to the beginning of the FY 2021 Second Quarter (beginning October 1, 2020).  A complete list of the changes directed by Town Council is attached to this Staff Report and titled Summary of Changes to the FY 2021 Budget (Attachment 2). 

The proposed Resolution Adopting the FY 2021 Budget (Attachment 3) adopts the FY 2021 First Quarter Budget subject to the changes directed by Town Council, as shown in the Summary of Changes.

The Proposed FY 2021 Budget and associated documents can be found online at: http://www.purcellvilleva.gov/budget.

Under Section 15.2-2506 of the Code of Virginia (1950), as amended, the budget is a fiscal planning document and its adoption by Town Council does not authorize any expenditures.  In order for budgeted expenditures to be made in FY 2021, the Town Council must, in addition to adopting the Budget, adopt a resolution appropriating such funds.  Further, once funds are appropriated by Town Council, they must be spent within the same fiscal year they were appropriated, or the Town Council must re-appropriate those funds to be expended the following fiscal year.  Such re-appropriations are often necessary for capital improvement projects, which may take several years to complete.

Budget Resolution:

The Resolution Adopting the Fiscal Year 2021 Budget (Attachment 3) adopts the FY 2021 Budget subject to the changes directed by Town Council, as shown in the Summary of Changes.  To ensure efficient and effective Town operations, the Town Manager is given the authority and flexibility to execute the Town Council’s approved budget in a dynamic operating environment.  The proposed Resolution, Section III, authorizes and directs the Town Manager to take all appropriate administrative actions necessary and prudent to effectuate implementation of the adopted budget including, but not limited to, transferring money within and between funds, paying all short and long term debt due, and establishing necessary encumbrances at fiscal year-end.  This authority is a standard practice and is similar to other local jurisdictions such as Leesburg and Loudoun County.

Appropriation Resolution:

The Resolution Appropriating Funds for Expenditure in FY 2021 (Attachment 4) an interim appropriation for expenditure of FY 2021 First Quarter funds budgeted in the FY 2021 Budget, as amended by the Summary of Changes to the FY 2021 Budget, and also re-appropriates for expenditure in FY 2021 the capital improvement project funds that were appropriated by Town Council in FY 2020 but were not spent within FY 2020.  Generally, operating funds encumbered in the prior fiscal year do not carry over to the new fiscal year and any remaining encumbrances are liquidated. However, due to the importance of certain projects (CoronaVirus Aid, Relief, and Economic Security (CARES) Act CoronaVirus Relief Fund (CRF), Local Business Relief Vouchers, Comprehensive Plan, Zoning Ordinance Review, Class and Compensation Study, General Billing software implementation, Visitor Center, Fireman’s Field Maintenance, and Water Resource Study, Utility Rate Study, and Sewer system long range planning) that started and were encumbered (signed contracts) in FY 2020, the resolution carries over the remaining funding to FY 2021. As this this is an interim appropriation limited to FY 2021 First Quarter funds, Town Council will reconvene to consider and adopt an additional FY 2021 appropriation for Second, Third and Fourth Quarter expenditures before October 1, 2020.

Ordinance adopting and re-ordaining Town taxes and fees:

The proposed FY 2021 Budget reflects, in part, anticipated revenues generated by taxes and fees.  No tax rate or fee changes have been proposed for Fiscal Year 2021. 

Vote Requirements:

1.      Budget Resolution:  A simple majority vote of those present and voting is required to adopt a budget resolution.

2.      Appropriation Resolution:  Four affirmative votes (a majority of all members elected to the governing body) is required to adopt a resolution appropriating funds for expenditure that exceed the sum of $500, pursuant to Article VII, Section 7 of the Virginia Constitution.

Budget Changes from the FY 2021 Proposed Budget: The staff report provided at the April 8, 2020 Special Town Council meeting articulated each of the budget changes to the Operating and Capital Funds.  https://purcellvilleva.gov/AgendaCenter.  As shown in the Summary of Changes, the revised annual budget estimate is $1.5 million less than the Town Manager proposed budget.   

DEADLINE FOR ACTION:

Under Section 15.2-2503 of the Code of Virginia (1950), the governing body shall approve the budget and fix a tax rate for the budget year no later than the date on which the fiscal year begins.

(all motions need to be voted on):

1.      Adopting the Budget Resolution

“I move that Town Council adopt Resolution Number 20-06-01, adopting the FY 2021 First Quarter Budget as amended by the Summary of Changes to the FY 2021 Budget and authorizing and the Town Manager to take all steps necessary and prudent to effectuate the implementation of the FY 2021 First Quarter Budget.”

2.      Adopting the Appropriations Resolution

“I move that Town Council adopt Resolution Number 20-06-02, an interim appropriation for FY 2021 First Quarter expenditures, and re-appropriating for expenditure in FY 2020 the Capital Improvement Program project funds that were appropriated by Town Council in FY 2020 but were not spent within FY 2020, and re-appropriating the seven project expenditures in the General and Utility operating funds that were appropriated by Town Council in FY 2020 but not spent within FY 2020.  Furthermore, Town Council will reconvene to consider and adopt an additional FY 2021 appropriation for Second, Third and Fourth quarter expenditures before October 1, 2020.”