TO: Mayor and City Council
THROUGH: Krishna Namburi, Acting City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Supplemental Budget 2 for unanticipated City expenses related to the Airport Fund.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Strong and Diverse Economy.
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SUMMARY:
summary
Since the adoption of the FY 2025 budget, there have been unanticipated expenses for the Airport Fund related to the Minimum Revenue Guarantee with the commercial airline at the Salem-Willamette Valley Airport (Salem Municipal Airport). The City receives grant revenue from the United States Department of Transportation (USDOT) and Travel Salem to fund the Minimum Revenue Guarantee. Adoption of this resolution provides appropriation authority for the pass through revenue and expense.
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ISSUE:
Shall the City Council adopt Resolution No. 2025-5, Fiscal Year 2025 Supplemental Budget 2, increasing Airport Fund resource and expenditure appropriation authority for the Minimum Revenue Guarantee?
RECOMMENDATION:
recommendation
Adopt Resolution No. 2025-5, Fiscal Year 2025 Supplemental Budget (2), increasing Airport Fund resource and expenditure appropriation authority for the Minimum Revenue Guarantee.
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FACTS AND FINDINGS:
Resources
Add: Other Federal grants, 160-64131500-35615, $377,290
Add: Other grants, 160-64131500-35655, $139,540
Expenditures
Add: Other Special Payments, 160-64131500-54850, $516,830
During budget development for FY 2025, the Airport Fund did not include the full amount needed for the Minimum Revenue Guarantee. The guarantee is paid to the commercial airline when income to the airline from sales is not adequate to meet the revenue amount due to the airline under contract. This Minimum Revenue Guarantee is paid for through grants received by the City from USDOT and Travel Salem. These grants are used to offset the additional expense forecasted in the Airport Fund and were not anticipated during budget development.
BACKGROUND:
ORS 294.471(1)(a) authorizes a supplemental budget when an occurrence or condition that is not ascertained when preparing the original budget or a previous supplemental budget for the current budget period and that requires a change in financial planning.
As this action would cause an increase of 10% or more of the adopted budget a public hearing is required.
Kelli Blechschmidt
Management Analyst II
Attachments:
1. Resolution No. 2025-5
2. Resolution No. 2025-5, Exhibit A
3. Resolution No. 2025-5, Exhibit B