Committee reviews $6.5 million in prior-year encumbrances, reauthorizes ARPA allocations

Brian McCutcheon, accounting manager for the city, presented the first proposed 2025 budget reallocation (Exhibit B), explaining the packet would roll forward prior-year purchase order and contract encumbrances that remained open at the end of 2024. McCutcheon said the city’s new financial system distinguishes purchase orders from contract encumbrances but that both represent prior-year commitments that should be recognized in 2025.

McCutcheon told the committee the total roll-forward request across five funds is approximately $6,500,000, with about $5,500,000 in the general fund. He said two items account for roughly $3,200,000 of the general-fund total: about $2,100,000 for the Broad Street Market restoration project and slightly more than $1,000,000 for capital projects under the Facilities and Special Projects department, including ongoing HVAC and electrical rehabilitation at the City Government Center and the Public Safety Building.

Other roll-forward requests outlined by McCutcheon include about $235,000 in the State Liquid Fuels Tax Fund (for streets, salt and asphalt projects), roughly $715,000 in the Neighborhood Services Fund, about $3,700 in Parks and Recreation (City Island), and additional encumbrances in the Capital Projects Fund tied largely to streets work and the Capital Gateway Project.

McCutcheon and other staff clarified how the roll forwards are funded: the encumbrances will be recognized against beginning fund balances rather than representing an unanticipated draw on reserves. “Had these encumbrances been fully liquidated and spent in the prior year, it would have used the available cash within each one of these funds,” McCutcheon said.

Council members asked several programmatic questions. Councilman Jones asked why several ARPA projects and other initiatives funded in prior legislation had not yet been spent; staff said many of those initiatives require detailed program design, criteria development, or outside procurement (for example, geotechnical studies for a pool project or criteria for a delinquent trash-bill program). Administration staff reported that an RFP for a geotechnical study on the pool had been issued and that demolition work funded with ARPA had been bid out; staff said approximately $1,000,000 was allocated for outsourced demolitions (roughly 10 properties in the bid) with about $500,000 used for in-house demo equipment purchases.

Committee members asked procedural and legal questions about whether council could reallocate leftover line items (for example, a $10,000 youth commission line) into other uses; the law bureau and finance staff said council can propose amendments and that such changes would typically be prepared for action at the legislative meeting rather than in a work session. Staff also explained that reauthorizing ARPA-funded initiatives is necessary so bureau staff can continue project work; the first page of Exhibit B reports how ARPA revenue was treated and the second page lists the reauthorized projects and remaining allocations.

Vice President Green said she would recommend the proposed reallocation and reauthorization be placed on the next legislative agenda so council can act. No formal vote or appropriation was taken at the work session.