Annually we conduct an audit of the city books. With the 2014 audit we noted that the city was
very close to budget, with few resources to be considered a surplus. The outcome for the general fund recognized
good budgeting, matching expenditures and revenues. In all actuality we were fortunate as revenues
exceeded budget by 7% but expenditures also exceeded budget by 7%. With this the cash balance in the general
fund remained somewhat consistent but dropped $316 from 2013 to 2014.
Typically an after audit transfer is accomplished. The city adopted a policy whereby if the
general funds reserve is in excess of 45% of the following year’s budget, the
difference would be transferred to an account that provides for future
improvements. After doing the
calculation there were some minor resources in excess of the threshold. That being said, with the budget experience in
2014, it was felt this transfer should not occur. The result was no general fund dollars were set
aside for future improvements.
We use the same philosophy when it comes to the sewer
fund. Sewer funds are managed using two
funds; an operating fund and a sewer capital fund. The operations of the sewer department are
budgeted annually and at year end we look at balances in the operating
fund. If they exceed the 45% threshold
for the following year’s budget, funds are transferred to the sewer capital
fund. This year there was a balance that
could be moved, amounting to $78,706. These funds were transferred and this improved
the balance of the sewer capital fund by that amount.
We are fortunate that revenues kept pace with expenditures
in the general fund in 2014 but we have come to a place in time where budgeting
and fiscal constraint have met their match.
Over the past 5 years the levy for the general fund has been set at less
than the levy that was set for 2010.
There have been two years with minor increases but the 2015 levy remains
lower than the levy imposed in 2010.
Considering the big picture of ongoing finances the city will find it
difficult to maintain this status quo going forward.
Sewer operations on the other hand have a great deal of
variables. These include the flow rates,
weather, repairs and other factors. When
things go well we have the ability to generate funds that can be reserved for
capital expenditures which was the case for fiscal year 2014. Saving operating expenses is important in
keeping sewer service rates low. Having funds
reserved for capital expenses in the long run keeps operation costs low by
being able to finance improvements without incurring debt. Having a healthy fund balance also gives some
comfort for any emergency situation that may occur.
