Concordia to change fiscal year start date

Wednesday, October 19, 2016

For approximately the past year, discussions have taken place at various Concordia Board of Aldermen meetings about the city's fiscal year. The main area of concern relates to the budget. At present, the city's budget is approved prior to the April municipal election. Because of this, there is a potential oncoming board members would not have an opportunity to review the next year's budget before it is approved. At the meeting Monday, Oct. 17, board members started the next step to move the start of the city's fiscal year of April 1.

The city typically starts its next year budget preparations in November, according to Concordia City Administrator Dale Klussman. Unlike other entities, the city has to have a budget in place prior to the start of the fiscal year, he added.

Klussman went through three options the aldermen could take with the city's fiscal year -- they could keep it April 1, move it to July 1, or even Oct. 1. If changing the start date the city would have to pass a proper ordinance and either make amendments to the existing budget through to the new start date, or create a new budget to fill the gap between April and July or April and October.

Keeping the April 1 date would not incur any additional audit fees and there would be no fluctuations in revenues, expenses, beginning balance an cash on hand. However, keeping it would mean no input from newly elected personnel, ties department heads and administration to determine budgeted expenses versus new expense priorities. It also means Klussman has to estimate nine months worth of insurance premium costs for property, liability, and health insurance, while knowing actual costs for three months. The April 1 start lines up with the Local Governmental Employee Retirement System (LAGERS) year.

Moving to July 1 allows the principles of the adopting board to be reflected. However it splits summer activity operational costs -- aquatic center and sports complex -- into two fiscal years. It also will require additional amendments and possible increase for an initial audit. The city would know actual insurance premium costs for 12 months, and LAGERS would have nine months actual costs and three months estimated.

An Oct. 1 start would also reflect the principles of the adopting board. Also, pool and baseball seasons will have concluded, the Concordia Fall Festival and its related expenses will have concluded, and cash flow will be enhanced in the first quarter due to the payment of property taxes. The city will know nine months actual insurance premium costs, while three months will be estimated. Lagers costs will be split as six months actual, six months estimated.

It was the recommendation of Klussman the city move its fiscal year start date to Oct. 1. This sentiment was echoed by Concordia Mayor Michael Brown. There are financial impacts relating to the proposed change.

The city has various bonds and in those bonds are certain covenants, or agreements relating to repayment. The city will have to have a six-month audit of a April 1 to Sept. 30 budget to make sure it meets the bond covenants. The city also has to fill out a Electronic Municipal Market Access (EMMA) report, which notifies bond holders of the changes to the city's normal operations. A report of each audit is also required.

Aldermen were in agreement with Klussman and held a first reading of the proper ordinance. Klussman recommended tabling the second reading so he can bring to aldermen the costs associated with conducting the EMMA notification. Aldermen followed his recommendation.

City beat

The following items were discussed at the Concordia Board of Aldermen meeting Monday, Oct. 17:
--Approved request from Bonnie Fleming to establish payment plan for water sewer bill. According to Concordia City Administrator Dale Klussman, during the meter replacement project there was no water usage reading on the bill for August, but was included on the September bill along with the September usage. Fleming will play $90 by Nov. 4 and the remainder of the balance by Dec. 5.

--Denied request from Shelter Insurance -- per city ordinance for payment due date -- for relief of late penalty on its September water bill. Bills were due Sept. 10, which was a Saturday. The city allows for payment on Monday following weekend due date. Payment was received Sept. 14.

--Approved water/sewer bill adjustment of $23.10 for Concordia resident John Humphrey after city discovery of customer side water line damage.

--Approved sewer bill adjustment of $7.91 for Concordia residents JD and Leslee Diamond. They noted they had a cracked exterior hose which was causing a water usage leak, which they will pay. They were only seeking adjustment for the sewer unit charge.

--Authorized lease purchase of Ford Explorer Interceptor at fleet pricing of $37,903.72, to be paid out over 60 months at $719.87 per month. This finalizes the decision made at the Oct. 3 aldermen meeting regarding which vehicle the city would purchase.

--Approved bid language for Ada Street Sewer Extension to be advertised in The Concordian Oct. 26. The city will use this bid as the basis for future bid proposal language

--Authorized Klussman to move forward with advertising among tree trimming services to conduct trimming of limbs over road right-of-ways.

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