City reviews budget, gets missing funds held by county; golf fund improves, but remains at-risk with swimming pools fund
City staff conducted the quarterly budget review with City Commissioners during their Nov. 19 work session.
The review showed that for fiscal year 2019, which ended June 30, the city had reached a 22 percent fund balance for the general fund despite only projecting an 18 percent fund balance for the year.
City policy is to maintain an undesignated fund balance of 17-20 percent, or about two months of operating expenses for cash flow needs, maintaining the city’s quality, low-risk credit rating and to address unexpected expenses.
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That influx of cash for the fiscal year came from the county, where staff in the treasurer’s office discovered that $580,747.61 meant for the city had been sitting in a fund and hadn’t been distributed to the city since August 2016.
The funds are from the local option vehicle tax for online registration renewals. That’s a 1.5 percent tax that’s split between the county and city. The county gets about 1 percent and the city gets 0.5 percent, Melissa Kinzler, city fiscal director said during the Nov. 19 meeting.
Some city tax bills are being reissued
“It was put away in a fund and by error hadn’t been distributed to the city,” Kinzler said.
The city received the additional funds in August with an explanation from the county that stated: “The reports for July are attached. There is a bit of an explanation required. You’ll see journal entry 2020-00000192 on 7/1 in fund# 7850 for $580747.61. This is because it was discovered that the online registration renewal portion of the motor vehicle county option tax was not being distributed monthly as it should have been… since August of 2016!“
The county handles vehicle registration and renewals and sends reports to the city of its share. The funds from the online vehicle renewals had not been included in reports from the county to the city so the city had no way of knowing the funds were missing, according to the city finance office.
County Treasurer Diane Heikkila, who took office in January, told The Electric that “I don’t know exactly how it happened, but the revenue person that I have here now discovered this fund, started looking into it and discovered it had not been addressed.”
She said there had been a lot of turnover in the office previously, causing the fund to be overlooked, but the issue has been addressed.
County officials sworn into office
“It was an innocent mistake we hope,” Heikkila said. “The funds were there, they just hadn’t been distributed.”
The city applies all tax revenue for July and August to previous fiscal year, Kinzler said, which helped the fund balance.
Now that the error has been corrected, Kinzler said the city anticipates receiving about $20,000 more monthly from those online payments for vehicle registrations.
Kinzler also reviewed the at-risk funds, those that require close monitoring and have low or negative fund balances.
The golf fund remains on the list, but Kinzler said for the last quarter of fiscal year 2019 and the first quarter of the current fiscal year, revenues had increased.
For the first quarter of this fiscal year, which is July 1 through Sept. 30, revenues in the golf fund were up by $88,787 over the same time last year. Expenses were up by about $30,000 over last year, but down by about $40,000 from the year prior.
Kinzler said those were positive signs for the golf fund.
CourseCo updates city on golf operations since taking over management
Commissioners said they’d received mostly positive feedback about the golf courses since CourseCo took over management Feb. 1.
City Manager Greg Doyon said he thought the city made a good decision contracting with CourseCo. He said there were kinks to be worked out and getting the concessions operational at Eagle Falls would help, but “it looks like it’s headed in the right direction.”
CourseCo takes over management of city golf courses on Friday
The swimming pools fund remains at-risk with revenues being down, but expenses were also down.
Doyon said he’s directed staff to work on a more sustainable plan. The city had hoped the Mustang Pool option would work, but it’s had challenges with maintenance and the smaller size limits programming and revenues.
Feasibility study to replace Natatorium in the works; demolition planned by end of year
The city permanently closed the Natatorium in December 2018, citing safety concerns, and has not yet demolished the facility. Doyon said staff had planned to use Community Development Block Grant funds for demolition, but determined they’d have to change the city’s rules to do so.
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Staff is still moving forward with a request for proposals for a feasibility study for a future indoor acquatics facility. Park and Recreation Director Steve Herrig said he’s hoping to have an RFP out by the end of the year to start getting some options.