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HomeMy WebLinkAbout23- City manager's office ORIGINAL CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION From: Charles McNeely, City Manager Subject: Ways and Means Committee request to list fund/account balances on Dept: City Manager's Office Council agenda items. Date: February 10, 2010 Council Date: 2/16/2010 Synopsis of Previous Council Action: 1/20/2010—Ways and Means Committee recommended administrative policy change to list fund/account Balance on Council agenda items. Recommended Motion: The Ways and Means Committee recommends that the request to list fund/account balances on Council agenda items be approved. Signat e Contact person: Teri Baker or Barbara Pachon Phone: 5 129 or S 4 Supporting data attached: Ways and Means Staff Report Ward: NA FUNDING REQUIREMENTS: Amount: Source: (Acct. No.) -0- (Acct Descri t� inn) -0- Finance: Agenda Item No. 2-3 2-1 (0- l0 CITY OF SAN BERNARDINO-REQUEST FOR COUNCIL ACTION STAFF REPORT Subiect: Ways and Means Committee request to list fund/account balances on Council agenda items. Backeround• At the November 4t December Wh, and January 20th Ways and Means Committee Meetings, the Committee discussed the listing of fund/account balances on Council agenda items. The Committee requested that staff provide examples of how listing account balances on agenda items might work. Staff from Finance and the City Manager's Office went through two recent council meeting agendas and outlined some of the issues that may result from listing account balances (Ways and Means Report is attached). After an extensive discussion, the Committee understood that listing the account balance on agenda items would not provide an accurate picture of available funding; however, the Committee is recommending that the full council adopt this as new administrative policy requiring that council items with funding requirements include: • Original Budget Amount • Current Balance • Balance after item is approved While this information may certainly be listed on agenda items, staff wants to make sure that the Mayor and Council are aware that balances can change on a daily basis and that this information may not provide the most accurate and up to date information. This would be an extra step for departments when preparing council items and would not require a significant amount of time. However, if the Mayor and Council are interested in a thorough analysis of each account balance to determine available funding, that would take a significant amount of staff time. Financial Impact: None. Recommendation: The Ways and Means Committee recommends that the request to list fund/account balances on Council agenda items be approved. However, staff is concerned that listing account balances on every council item will not provide the most useful source of information. For that reason, staff is not recommending that account balances be included on Council items. As an alternative, General Ledger Reports for each fund are available monthly and could certainly be made available for your review. CITY OF SAN BERNARDINO CITY MANAGER'S OFFICE INTEROFFICE MEMORANDUM TO: Ways and Means Committee FROM: Teri Baker, Assistant to the City Manager 0 THROUGH: Charles McNeely, City Manager SUBJECT: Request for Fund Balance information on Agenda Items DATE: December 7, 2009 At the November 4`h Ways and Means Committee Meeting, the Committee requested that staff come back to the committee with examples of how listing account balances on agenda items might work. In an effort to make sure the council would receive the most useful information, staff from Finance and the City Manager's Office went through the past two council meeting agendas. This exercise proved to be extremely time consuming and staff is not certain that the listing account balances will actually help. Below are some of the issues staff identified: I. The adopted budget outlines a plan for departments to go by. An account balance is likely for a budgeted item not yet spent, such as monthly payments, supplies, contracts, etc. It's common for departments to have payments that are due at specific times of the year and follow usage or consumption trends. As an example Refuse green waste tonnages typically are flat during the first part of the year then spike from March to the end of the year. Also, street paving follow a seasonal trend. Most paving is done during the warm months of year. Account balances should not be confused with "available funding." 2. Council items are due 3 weeks prior to the council meeting. The account balances may change drastically by the time the item is presented to council. Payments are issued twice monthly so the time between when the council item is submitted to the City Manager's Office and when it's presented to council often changes the balance drastically (as staff discovered going through this exercise). 3. Contract purchase orders do not encumber funds as regular purchase orders do. Contract purchase orders are more like a line item in a budget where the funds show as available until actually spent. Therefore, there could be a large amount of a fund balance that may seem available yet there is a contract purchase order pending. Also, regular purchase orders encumbrances are changed frequently. Whether increased or decreased also affects the available balance of an account. 4. CIP Projects are often separated by funds and they often have change orders. For instance there was a Matich contract on the 11/16 agenda that had three separate account numbers, one for the street portion, one for the storm drain portion, and one for street lights (for a budget transfer). Listing the account balance on each of those accounts really serves no purpose unless the project is being closed out and you know the bills have been paid and no change orders will be made. 5. Staff found an instance where the account balance was zero at the time the item was presented to council. This is because the project was not completed last fiscal year as planned and the funding for the project is on the carryover list. Until the carryover list is approved, the funding will not show in that particular account. Staff also found an instance where there was a zero balance in the account, but$5000 was needed to fund the project. In that case, the $5000 was to be transferred administratively (because it was under the$25,000 limit) so it did not show in the council item. 6. There was another instance where there did not appear to be adequate funding and we realized that a Purchase Order had recently been closed out which freed up funding in the account; however, the transaction wasn't posted in the system yet. Also, along these lines are budget amendments that are requested under $25,000. An account listed on a report may have a pending budget amendment. These are just a sample of issues that could impact account balances that staff discovered in going through two agendas. While account balances certainly may be listed, staff believes it is important that the committee is aware that balances can change on a daily basis. If the Council is interested in reviewing monthly account balances, this information is available on the Monthly General Ledger Reports that are provided to departments and could certainly be made available to Councilmembers as well. Please understand that staff is trying to provide you with the most useful information possible and we are concerned that listing account balances on every council item will not serve the purpose that you are intending it to. Also, please keep in mind that staff must adhere to the adopted budget and any changes that need to be made (over $25,000) must be approved by the council. We look forward to discussing this matter with you and coming up with a solution that will best assist you in your re$ponsibilities as councilmembers.