The city won’t have to cut back on services or purchases in this year’s budget to make up for a $2.3 million shortfall caused by an accounting mistake.
The city’s Board of Aldermen were told Wednesday that, instead, they can pull from other unassigned funds and realize savings to cover the $2.3 million gap that was in the city’s Rainy Day Fund as of June 30.
The city can pull about $1.96 million in unassigned funds in city’s Capital Improvement Program fund, account for $218,000 in additional grant money that has now come in and recognize $102,000 in Department of Public Works savings so far this year.
This news came as a relief to some aldermen, who thought that staff was recommending the city cut the Department of Public Works budget by the $102,000.
The department has actually saved that much on purchases or bids so far, said Gerry Kolbfleisch, the city’s finance director.
“I’m relieved that these are saving and not cuts,” Alderwoman Karen Young said.
Kolbfleisch told the mayor and aldermen on Wednesday that the error came when the city’s accounting department used the wrong number to calculate the estimated amount of fund balance that would be available for this year’s general fund budget.
At the close of each budget year, which ends June 30, the city is required to have unassigned money left over that is equal to 12 percent of total general fund revenue to fund its Rainy Day Reserve Fund.
Last budget year, the city was required to have $8.24 million available in the fund, Kolbfleisch said. But as of June 30, the fund balance available was about $5.95 million.
“It was an error,” he said.
The $1.96 million in the Capital Improvements Program fund is not currently assigned to projects. The city sometimes uses this extra money to pay for projects that go over their budget, but it doesn’t need that much, Kolbfleisch said.
But using it all would leave no buffer at all, he said.
Mayor Randy McClement said he has asked the directors of the city’s other departments to look for savings so far this year and report back to him.
McClement and staff will then present a final recommendation to the board.
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