Council Budget & Finance Committee

Summary

Meeting Overview

The Budget & Finance Committee met on March 22, 2011, at 1:00 p.m., with the Chair presiding. The committee addressed five agenda items during the meeting, taking three votes and hearing four public comments.

The committee approved the 2010 Comprehensive Annual Financial Report (CAFR) and reviewed the Monthly Budget Report (1-9) on an informational basis. The committee also approved discussion of Council Links (items 10, 12-14) and approved the FY 12 Budget Discussion Timeline. One item referred to the committee (item 15) was deferred for later consideration.

Attendance

The following individuals were present at the meeting on March 22, 2011:

• Ellinger
• Lane
• Gorton
• Kay
• Farmer
• Myers
• Beard
• Lawless
• Blues
• Driscoll
• Maloney
• Stinnett
• Schoeniger
• Martin
• George

No absences or late arrivals were recorded.

Votes and Decisions

Motion on Reorganization Plan Presentation

A motion was made by Myers and seconded by Martin to have the mayor or CAO present the reorganization plan to the council for discussion and approval 1:40:27. This motion was withdrawn and did not proceed to a vote.

Motion on Council Links

A motion was made by Kay and seconded by Stinnett to use the proposed council links as presented, based on the current administrative reorganization 1:54:38. The motion passed by voice vote.

Motion on Council Budget Schedule

A motion was made by Schoeniger and seconded by Stinnett to accept the proposed full council budget schedule with adjustments for bond workshop and quarterly council meeting 2:00:35. The motion passed by voice vote.

Budget and Financial Actions

The meeting included presentations of two financial reports:

• Monthly Budget Report for February 2011 — A presentation of the monthly budget report covering February 2011 was provided to the body.

• 2010 Comprehensive Annual Financial Report (CAFR) and Audit Findings — A presentation of the 2010 Comprehensive Annual Financial Report and related audit findings was presented.

Public Comment

Four speakers addressed the council regarding concerns about the relationship between the proposed reorganization and the current budget process.

Gorton 1:03:29 questioned whether the current council links accurately reflect the actual administrative structure. He emphasized the need for a formal, charter-compliant reorganization process to be completed before the budget is finalized.

Lane 1:08:56 expressed concern that the budget process is being hindered by an unapproved reorganization. He urged the administration to present the restructure proposal before the budget is finalized.

Stinnett 1:50:51 highlighted a significant administrative risk: if the reorganization is not approved in advance, the budget may need to be completely redone, creating what he characterized as an administrative nightmare.

Kay 1:54:38 offered a different perspective, suggesting the council continue with the current council links as proposed in the budget. He noted that assuming most of the reorganization will carry forward would help avoid administrative disruption.

The public comment period reflected a central tension in the meeting: whether to proceed with budgeting based on the current structure while reorganization remains pending, or to delay the budget process until the reorganization is formally approved and finalized.

Contested Items

Council Links and Administrative Reorganization

A procedural dispute arose regarding whether the current council links should reflect an informal reorganization that the administration had implemented but had not yet received formal council approval. Committee members disagreed on whether to adopt the proposed links ahead of an official charter-compliant reorganization process. The committee ultimately agreed to use the proposed links, but members emphasized the importance of completing a formal reorganization process that would comply with charter requirements.

Budget Timing and Reorganization

Council members were divided on whether to delay the budget process to allow for a formal reorganization vote. Some members argued that proceeding with budget approval before completing the reorganization would create an administrative nightmare if changes needed to be made afterward. This split vote reflected concerns about the sequencing of these two significant processes and their potential interdependencies.

2010 Comprehensive Annual Financial Report (CAFR)

The committee reviewed the 2010 Comprehensive Annual Financial Report (CAFR), which received a clean audit opinion (unqualified). 0:00

Presentation and Key Findings

The external auditor, Mountjoy Chilton Medley, reported on the audit results. The report identified two material weaknesses related to accounting practices:

• Prior period adjustments for compensated absences
• Pension liabilities

Both material weaknesses were corrected during the audit process.

Delays and Staffing Issues

The committee noted that the CAFR was delayed due to leadership transitions and a missing Director of Accounting position. Despite these challenges, the audit was completed and the report received a clean opinion.

Outstanding Items

The following items remain pending:

• Single audit report
• Management letter

Key Speakers

The discussion involved Driscoll, Phyllis Cooper, and Brad Smith.

Outcome

The 2010 Comprehensive Annual Financial Report was approved by the committee.

Monthly Budget Report (1-9)

38:43

The committee reviewed the February 2011 revenue and expenditure data during this presentation. Key speakers included Driscoll, Stinnett, and Lawless.

Revenue Performance

Employee withholdings exceeded budget expectations, running 2.4% above the projected figures. However, other revenue streams underperformed. Net profits and franchise fees both came in behind budget during the reporting period.

Expenditure Analysis

On the expense side, the committee noted personnel savings resulting from hiring freezes and staff vacancies. These reductions helped offset some budget pressures in the personnel category.

Notable Variance

A significant $1 million variance was identified and attributed to a library payment, which accounted for a substantial portion of the month's budget deviation.

Committee Action

The committee requested more detailed financial breakdowns for internal review, indicating a desire for deeper analysis of the budget performance beyond the summary figures presented. This outcome was informational in nature, with the presentation serving to update the committee on the month's financial status and establish a foundation for further detailed examination.

Council Links Discussion (10,12-14)

1:00:40

The committee discussed the alignment of council links with the current administrative reorganization. Key speakers in this discussion included Gorton, Lane, Maloney, Myers, and Kay.

Concerns Raised

During the debate, concerns were raised that the current structure had not been formally approved by the council and could potentially conflict with the charter.

Motion and Outcome

A motion to use the proposed links as-is was brought forward and passed. The committee approved this approach to proceed with the proposed council links structure.

Next Steps

The committee established a plan to hold a special meeting on April 12 to review the reorganization before the budget presentation. This scheduled meeting would allow for further examination of the administrative reorganization prior to budget discussions.

FY 12 Budget Discussion Timeline

1:55:09

The committee discussed the proposed budget schedule for fiscal year 2012. Key speakers in this discussion included Schoeniger, Stinnett, and Gorton.

The discussion centered on establishing a timeline for budget-related activities, with particular attention to scheduling a bond workshop. The committee identified the need to hold a bond workshop in April and determined that April 28 would be the appropriate date for this event.

In addition to the bond workshop scheduling, the committee addressed adjustments to the quarterly council meeting time as part of the overall budget discussion timeline.

A motion to accept the proposed schedule was brought before the committee and passed. With this approval, the bond workshop was officially scheduled for April 28.

Items Referred to Committee (15)

1:35:04

The committee discussed the administration's reorganization plan and the requirement for formal presentation to the council. Key speakers included Maloney, Driscoll, and Myers.

The committee emphasized that the administration must formally present its reorganization plan to the council as required by charter. This formal presentation was identified as a necessary step in the review process.

To accommodate this requirement and allow adequate time for review, the committee agreed to schedule a special meeting for April 12. This meeting will be dedicated to reviewing the reorganization plan before the budget is presented to the council.

Outcome: The item was deferred, with the understanding that the reorganization plan review would proceed through the scheduled special meeting on April 12.