There was a lot of discussion and disagreement at the Jan. 3 Monticello City Council meeting concerning a budget amendment former mayor, Dave Goedken, vetoed.
A 2-3 vote to overturn the veto failed to pass, requiring a majority vote.
During the Jan. 16 council meeting, a work session was held on the need for budget amendments and process to go about approving them.
“Several misstatements and comments were made that need to be clarified,” stated City Administrator Russ Farnum in his memo to the council. “Many council members and citizens didn’t understand what the specifics of a budget amendment entail.”
According to the Iowa League of Municipalities, “cities are only required to amend (a budget) if they anticipate spending more than was budgeted in a given program.”
On the revenue side, a city only has to do an amendment when moving money into a different program area. A city is required to have a budget amendment to increase expenditures in program areas that will exceed the budgeted amount.
“Since the revenue side may not have to be updated, they often do not balance, because the budgeted amendment only shows the expenditure side,” stated Farnum. “In general, budget amendments only balance when moving money form one program area to another.”
There has also been talk about the “template” the city uses to publish budget amendments in the Monticello Express, per State Code. These templates are designed by the Department of Management (DOM). These templates don’t account for the different budget designations. For example, “Berndes Center” in the city’s budget falls under “Parks and Rec.” Through the DOM program, the “Berndes Center” is considered “Culture and Recreation,” which also includes the library.
“A budget is a guess of what you’re going to spend in the next year,” explained Mayor Wayne Peach. “Sometimes our guesses are not as good as we would like them to be, so we have to move some money around. The other thing to realize is that the city does not get all of its money at the beginning of the year. It is recommended that cities have at least 25 percent of their budget in reserve to cover the times when an expense comes up before money comes in through taxes.”
Farnum said it’s not like balancing one’s personal checkbook. He told the council that he and City Clerk, Sally Hinrichsen, have been struggling with making these budget amendments more transparent so the average citizen can understand them. He asked the council for suggestions.
“We need the details,” said Council member Mary Phelan. “We can’t go by the limited requirement to go in the paper. What would be helpful to all of us is if we could see those details at the time it’s posted, instead of a few days before the meeting. Because then we don’t really have time to ask you questions or absorb the information.”
Council member Candy Langerman said it can be hard for new council members to just jump in the budget conversation without any background.
“It’s not that I’m unfamiliar with it,” Phelan said. “My point was, it didn’t appear like there was an attempt to try and close the gap.”
She said she reviewed the 77-page document sent out by Hinrichsen and there is room for the city to be more efficient with its money.
“There are other areas where I feel we could be more efficient if we’re not going to spend all of that money by year end,” Phelan said. “And sometimes, that just gives a license to spend because departments will be reluctant to give that (money) up.”
Goedken added, “We raised taxes by $2 a $1,000 last year and here we’re continuing to add to this budget. Somewhere, we have to draw the line.”
Farnum offered to present a budget amendment to the council that can show where the money is coming from when there’s an increase in a program budget.
Parks and Rec recently purchased a storage shed. Goedken wanted to know where the money was coming from and whether the purchase was increasing the budget.
Jacob Oswald, Parks and Rec director, explained that the money is not coming out of the General Fund, but from his line item for facility improvements.
“Things come up during the course of the year. For us specifically, we’re not going to ask for more money unless there’s this crazy grant that comes up. We’ll move money around as we need to,” offered Oswald. “In my seven years, I don’t know that I’ve added money to my budget.”
“It would clear up a lot of confusion if we can show where the money is coming from,” reiterated Goedken.
Council member Jake Ellwood said city budgets and budget amendments are second nature for the city staff.
“When this gets thrown on us as a council, we have three days to figure it all out,” he said. “You guys work with these numbers day in and day out. You understand it. You know where it’s all going. Try to clear it all up for us to understand it.”
“It would be helpful to see where the transfers are coming from,” Phelan suggested. “Jacob, if you’re just taking the money from other funds and moving it around, I have no problem with that. But I can’t see that (with the way the amendment was presented).”