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Budgeting for Multi -Year Projects Currently, the City adopts a budget for the operating funds of the City, including the general fund, program recreation, capital equipment and the utility funds. Current practice for project budgeting is to adopt a project budget as part of the Capital Improvements Program and the related bond issue. This budget is not currently entered into the finance system, however by entering these budgets into the finance system, budgetary controls could easily be added to the project expenditures. The current chart of accounts in use includes an account segment that is used for the project (each project is given a unique number) which accumulates the costs for each individual project. At the end of a project, staff goes back over the expenditures to determine if there were costs charged to the project that should have gone against another project. By adding the budgets into the system at the beginning of the project, it would assist in monitoring the expenditures on an ongoing basis and help to identify the revenue sources for the project. For multi -year projects, the total budget would be entered in the first year. In the second year, the budgeted amounts would be reduced for the amounts recorded in the first year. The benefits to be derived include that all revenue sources are identified up front and that staff members from differing departments can work together to identify the expected project costs. This should help to reduce coding errors in the processing of payments. An example of this methodology follows: Revenues Bond Issue Transfer from fund Received/ Remaining Original Expended budget for Budget in 2000 future year(s) $ 1,000 $ 1,000 $ 25 25 $ 1,025 $ 1,000 $ 25 Expenditures Construction $ 900 $ 750 $ 150 Engineering 80 50 30 Prof services, legal 25 15 10 Bond issue costs 20 20 $ 1,025 $ 835 $ 190 Town Center Construction Fund Over the past four years, the City has purchased two different parcels in the "Village Area" of Lino Lakes for the purpose of reselling the property for development. A third parcel was traded for the land the Civic Complex is located on. Future land sales are intended to cover the purchase of these three parcels. In addition, the proceeds from the sale of the former police station land and adjacent lots will also go toward covering these costs after repaying an interfund loan made by the Water and Sewer Fund in 1998. The total amount of the costs incurred on the acquisition of these parcels and the costs associated with them through the end of 2000 is $2,090,332. Two of these parcels were financed with contracts for deed; as of 12/31/00, the remaining principal balance of the two contracts is approximately $859,352. (8)