The Budget Demystified

So now its time to discuss the budget; there has been a lot of “talk” about the budget and audits, all talk and no facts. No one bothered to go to the library and take a look. No one bothered to call City Hall or talk to City Council, ask the questions, find out why no audits, people are making assumptions, slinging mud, but not finding out. Well here are the facts.

If you read the budget document (available at the Library) you will see that the General Fund non-personnel related costs (expenses) have been almost flat since 2004. The personnel related expenses did go up about $500,000 since 2004. These increases are largely due to increases in PERS (Public Employee Retirement System), increases in benefit costs, a 4% increase in wages for police and police overtime costs. What is so mysterious about that? They are all valid costs, some (such as PERS) completely out of the control of the City.

There have been NO additional positions. There is the same number of FTE’s (full time equivalents) in the budget. What has changed are the titles of some positions. Some were eliminated and replaced with others, but the count remains the same.

Now if you look at some of the other funds, you will also see some increases. With the addition of Paramedic service there was a large increase in the EMT/Fire funding. We all know about that. I think what everyone is focusing on are one time monies (revenues) that have been awarded to us. So the revenue side of the budget has increased in these special funds, thus the expense portion has increased also.

Most of these monies are grants, state or federal funds that have restrictions on how they can be used. They cannot supplant General Fund expenses or personnel, and must be used for specific projects. Many of these are capital improvement projects, streets, parks, etc. Many of these grants are monitored and audited later to insure the monies are spent appropriately.

So when people start screaming there is 10 million dollar increase in the budget, it is because they don’t know how to read and interpret a budget. Most of the increases are for CIP (capital improvement project) items funded by one time monies. We should be really glad that the staff is proactive in retaining these monies, applying for grants; otherwise we could not afford many of these improvements. The only caution is to make sure that the ongoing operating costs for these projects is taken into consideration, because those could affect the General Fund.

Now to address the audits, or lack of. First of all when the discrepancy first occurred we had a new City Manager. They were hired and trusted that their Finance Director knew what they were doing and was following the legal requirements for audits. However, the Finance Director apparently did not file any audits for 3 years. It was really a matter of incompetence. Unfortunately because The City Manager was under the impression that the Finance Director was doing there job, the whole filing issue did not surface for 3 years. You can point fingers to whomever you want. I personally think the then City Manger should be liable. The Finance Director is a direct report to the City Manager, and the City Manager should also have been aware of the legal requirement to file audits. He should have followed up with the Finance Director after the first audit was not filed. It is not the City Councils job to micro manage employees. Fortunately neither of these employees work for the City any longer. Plain and simple, the then Finance Director screwed up. The Staff and City Council are now rectifying the situation.

Now another thing to note; the City underpays employees, we have seen that with the Police, and when recruiting for positions. Often we get “newbie’s” who are relatively inexperienced and use the City as their training ground before taking off for bigger and better places. Some of these people are talented, knowledgeable and smart, some are not.