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Council grills finance director on reserves, stormwater backlog and capital timing during treasurer's report
Summary
Council members pressed the town's finance director on May 27 about reserves, enterprise fund accounting, delayed capital projects and a backlog of stormwater work; staff promised follow-up detail.
Council members on May 27 spent a sustained portion of the La Plata Town Council meeting questioning Finance Director/Treasurer Ms. Larson about the town's cash balances, reserves and the accounting treatment of capital projects.
Ms. Larson told the council that the town is audited annually and that audited financial statements for the past 10 years are available online. On the question whether the town will end the fiscal year with a deficit (without using reserves), Ms. Larson said, "I do not believe so," and cited stronger-than-expected investment earnings and some revenue/expense amendments that have offset shortfalls.
Council members repeatedly asked for clearer benchmarks and written road maps for reserves. Ms. Larson said the town currently maintains multiple reserve accounts (building reserve, vehicle reserve, a general rainy-day fund) but that enterprise funds generally lack separately designated reserves. She referenced Government Finance Officers Association guidance for best practice and said "we need to reevaluate" the general fund reserve because the town's budget is larger than when the prior reserve level was set.
On capital projects, staff identified Mod 2 (a major sewer plant project) as delayed; the council and Ms. Larson discussed accounting differences between modified-accrual accounting (general fund) and accrual accounting (enterprise funds), noting that capital spending may be budgeted in one year and capitalized and depreciated over time. Ms. Larson said specific Mod 2 components have started ("the base of the clarifier has, which is part of mod 2") but that substantial spending will show in FY2026 capital budget rather than FY2025 operating reports.
Stormwater management work and MS4 projects drew sustained attention. Ms. Larson reported an FY2026 MS4 budget of about $1,360,000 and said some of the related projects were moved into FY2026 because they were not completed in FY2025. Councilman Paul Guttenberg and Councilman Patrick McCormick pushed staff to produce a consolidated list and cost estimate for the backlog of stormwater maintenance and capital projects so the council can decide whether to fund them with fund balance or fees. Ms. Larson said public works had provided a site-improvement listing and she agreed to share it with council members.
The council also questioned inspection-related costs (building inspections handled through PlanCheck and treated as pass-through revenue and expense) and the variability of enterprise fund revenues (differences in revenue recognition timing, major facility fees on sewer). Ms. Larson explained that some variances come from permit timing and from capital projects not yet started.
On compensation and elected-official pay, members asked about stipends and payroll figures. Ms. Larson and HR director Monica Kennedy confirmed numbers presented in the report for mayoral pay and stipends; the council requested more detail and line-item breakdowns for salaries and benefits.
No ordinance or formal action resulted directly from the treasurer's report; staff committed to provide additional documentation and to place reserve-policy and stormwater-backlog items on a future work session agenda.
