02-17-2009 City Council Study Session PacketCity of Grand Island
Tuesday, February 17, 2009
Study Session Packet
City Council:Mayor:
Margaret Hornady
City Administrator:
Jeff Pederson
City Clerk:
RaNae Edwards
T
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7:00:00 PM
Community Meeting Room - City Hall
100 East First Street
Larry Carney
Scott Dugan
John Gericke
Peg Gilbert
Chuck Haase
Robert Meyer
Mitchell Nickerson
Bob Niemann
Kirk Ramsey
Jose Zapata
Call to OrderCity of Grand Island City Council
A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS
Individuals who have appropriate items for City Council consideration should complete the Request for Future Agenda
Items form located at the Information Booth. If the issue can be handled administratively without Council action,
notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given.
B - RESERVE TIME TO SPEAK ON AGENDA ITEMS
This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve time to speak.
Please come forward, state your name and address, and the Agenda topic on which you will be speaking.
MAYOR COMMUNICATION
This is an opportunity for the Mayor to comment on current events, activities, and issues of interest to the community.
Call to Order
Pledge of Allegiance
Roll Call
Invocation
This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open Meetings Act
in conducting business. A copy of the Open Meetings Act is displayed in the back of this room as required by state
law.
The City Council may vote to go into Closed Session on any agenda item as allowed by state law.
City of Grand Island City Council
Item -1
Discussion Concerning Budget Amendment
Tuesday, February 17, 2009
Study Session
City of Grand Island
Staff Contact: David Springer
City of Grand Island City Council
Council Agenda Memo
From: Dave Springer, Finance Director
Meeting: January 27, 2009
Subject: Consideration of Amendment to FY2008-2009 Annual
Budget
Item #’s: E-5 & F-2
Presenter(s): Dave Springer, Finance Director
Background
The City Council approved the FY2009 Annual Budget with Addendum #1 by Ordinance
#9184 on September 9, 2008. At this time, after discussions with the State Auditor’s
office, it has been determined that a long standing procedure used in the budgeted
appropriations calculation was not the preferred method, and that it would be appropriate
to amend the current year’s budget and revise the process for future state budget
submittals.
Discussion
In the past, at fiscal year end, departments were asked to submit to finance open purchase
orders and contracts on which services have not been completed. These future expenses,
previously budgeted for, were then added onto the new year budget and titled “Revised
Budget’’. The State prefers that these encumbrances be estimated and included in the
appropriations at the time new budgets are submitted to the State, in September. The
effect on our budgets will be to increase the expenditure or appropriation line. This in
effect becomes a worst case scenario if every new appropriation and carry over
encumbrance were totally spent, which has never happened. However, that is what the
State wishes municipalities to be prepared for.
It is necessary to have adequate appropriations in order to let a contract or purchase order.
As large projects may cross over two or more years, it will be necessary going forward, to
rebudget any remaining work into the new budget for that year. Last year was unusual, as
the contract for Capital widening and the engineering for at the Wastewater Treatment
Plant was awarded to vendors, but only minimal work was completed, leaving nearly
$5.5 million to be encumbered. Total encumbrances for the proposed budget amendment
are $6,664,527. These encumbrances were already provided for in the 2008
Projected Disbursements column as it affects fund cash balances. Of that, $715,994 is
in the General Fund and reduces that fund’s cash balance from $ 6,001,104 to
$5,906,553.
Alternatives
It appears that the Council has the following alternatives concerning the issue at hand.
The Council may:
1. Approve the budget amendment.
2. Disapprove or deny the amendment.
3. Do nothing currently, but amend the budget later in the year if needed.
Recommendation
City Administration recommends that the Council approve the amendment to include
those encumbrances as of September 30, 2008.
Sample Motion
Move to approve the ordinance providing for Amendment #1 to the 2008-2009 Adopted
Budget as recommended.
Item -2
Discussion Concerning Balanced Budget
Tuesday, February 17, 2009
Study Session
City of Grand Island
Staff Contact: Councilmember Chuck Haase
City of Grand Island City Council
From: Chuck Haase [mailto:chaase@charter.net]
Sent: Thursday, February 12, 2009 11:01 PM
To: Jeff Pederson
Subject: Balanced Budget Letter for Packet
To: City Council
From: Chuck Haase, City Council Rep – Ward 5
Subject: Amendment to the City Fiscal Policies – To include a Balanced Operating Budget
definition
BACKGROUND – The City fiscal policies were formalized the 1st time in 1992. The goal at that
time, was to put in place a formalized standard of conservative financial performance to serve the
Community. These policies will be an important part of reviewing the Trending that Jeff Pederson
has introduced.
TODAY - In discussing with Finance Director and the City Administrator, they both view a
definition that includes using existing fund balance in defining the term “balanced budget”.
Including fund balance changes the definition to mean when you’re bankrupt. I would like a trend
that should send signals of needed change, long before the fund balance is gone.
RECOMMENDATION – I propose to add the following definition to the Fiscal Policies.
A BALANCED OPERATING BUDGET is defined when current year operating revenues
equal or exceed the current year operating expenses.
This simple definition is an accepted definition by the GFOA (Government Finance Officers
Association), and provides for a point of reference and trending that are intended to help the
Council, Staff, and Public understand and effectively communicate
There are other existing budget and fiscal policies that dove-tail into this definition that, taken
together make, conservative fiscal common sense. For example, there are policies that authorize
one-time revenues to be used for one-time expenses.
REPORTING – An important and necessary part of the communication process from the City
Administrator and Finance Director would be to report whether the operating budget is balanced,
and if not, what steps are being taken to insure that we move to achieve a balanced operating
budget