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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Mary DeLoretto, Chief Service Development Officer |
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PRESENTER(S): |
Daniel Hofer, Manager, Capital Assets and Project Controls Bill Greene, Chief Financial Officer |
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TITLE:
title
TBA2022-04-01 - Technical Budget Adjustment for Capital Budget and 2021 Carryover Report
end
AGENDA ITEM TYPE:
Discussion
RECOMMENDATION:
Approve Technical Budget Adjustment TBA2022-04-01 providing budget authority for defined capital projects, and approving the carryforward of 2021 budget authority
BACKGROUND:
Carryforward 2021 Budget Authority
Following the final year-end close each year, UTA calculates unspent budget authority from the previous year’s approved Capital Budget and determines if any of this budget authority is required to complete projects and/or support delivery of the Capital Program in the current year. Any requests to bring forward unspent budget authority from the prior year is vetted by the Capital Project Controls staff. For 2022, staff have identified carryforward in the amount of $98.2 million. The detailed list of required 2021 budget authority by project is enclosed in Attachment B.
February 23, 2022 Technical Budget Adjustment Correction
The Board approved a technical budget adjustment on February 23, 2022. After final year end close was completed for 2021, it was determined that the 2021 carryforward identified as available to support two of the projects was overstated by $350,000. This request corrects that overstatement and reduces the Capital Contingency by $350,000.
Technical Budget Adjustment
A request for a formal technical budget adjustment is being submitted for approval to transfer funds from contingency to address identified budget shortfalls in existing projects. Included in this technical budget adjustment request is also a request to correct a budget programming error and consolidate a 2021 carryforward request with a duplicate project in the 2022 capital budget.
DISCUSSION:
Carryforward 2021 budget authority discussion:
In 2021, UTA underspent its approved budget authority by approximately $153.6 million. After conducting the carryforward review, UTA requests that a total of $98.2 million in 2021 budget authority be brought forward to complete delivery of 2021 projects and support delivery of the 2022 Capital Budget. The remaining $55.4 million of unused 2021 budget authority will be deferred, reprogrammed, or eliminated as part of the 2023-2027 budget development process.
February 23 Technical Budget Adjustment Correction
The Technical Budget Adjustment approved by the Board on February 23, 2022 contained errors in the 2021 carryforward amount available for two projects. The Meadowbrook Expansion Project and the Tooele Bus Facility project carryforward were overstated by $16,000 and $334,000 respectively. This request reduces the 2021 carryforward with a corresponding offset (increase) in funding from the Capital Contingency. This error was discovered during 2021 reconciliation following year-end close.
Technical Budget Adjustments
There are five projects included in this technical budget adjustment request. Three are seeking funding increases from the Capital Contingency and two projects are being combined into one.
SGR408- Route End of Line Enhancements seeks a transfer from Contingency in the amount of $1 million. This will fund UTA’s participation in the Orange Street End of Line construction project with Salt Lake City. UTA has an agreement with the City to contribute to this project.
MSP272- Trax Operational Simulator seeks to transfer $700,000 from Contingency to procure equipment. The original budget request was an estimate based on the FrontRunner simulator procured previously. The Trax simulator has turned out to be more complex than the FrontRunner simulator. UTA is also experiencing increased costs for the equipment due to inflation. This requested funding will allow UTA to procure a second simulator station and additional programmable elements in the application. These elements will provide staff with a more realistic experience during simulator training.
MSP270- Transit Signal Priority Onboard Units seeks to transfer $53,000 from Contingency to procure equipment. Costs for these units have almost doubled since the original budget request. This project budget includes federal grant funds.
MSP254- Techlink Corridor Study seeks to consolidate carryforward budget authority with NP-69- Techlink Corridor Study 2022 budget authority. NP-69 was created in error during 2022 budget development. 2022 funding should have been added to MSP254. These projects are duplicative.
NP-69 was approved as part of the 2022 budget process. MSP254 is being brought forward to the 2022 capital budget as part of the carryover process. This request will consolidate the $450,000 from NP-69 to the carryover request for MSP254.
ALTERNATIVES:
The Board may suggest revisions to the proposed technical budget adjustments and 2021 carryover.
FISCAL IMPACT:
This technical budget adjustment request will recognize a net of $245,688 in 2021 carryforward budget authority and transfer $2,130,000 from the Capital Contingency to underfunded projects. The carryforward request brings forward $98.2 million in unused 2021 budget authority. The balance remaining in the Capital Contingency after the technical budget adjustment will be $1.95 million.
The combined impact of these actions does not impact UTA fund balances.
ATTACHMENTS:
Technical Budget Adjustment, April 27 2022 - Attachment A
2022 Capital Budget Summary - Attachment B