Everett City committee approves $122,704.38 from general fund to pay prior-year bills

The Everett City Committee of Ways and Means on Jan. 9 approved an amended appropriation of $122,704.38 from the general fund budgetary fund balance to pay prior-year outstanding bills, voting in favor after finance staff described how invoices dated to the previous fiscal year were discovered after the books were closed.

The appropriation matters because, finance staff said, once a fiscal year is closed the only municipal mechanism to pay prior-year bills for budgeted items is to request council approval and use available appropriations rather than raise taxes. Miss Deimas, a finance department staff member, told the committee that the city reported its numbers to the state and that the requested payment would come from available resources rather than additional taxation.

Miss Deimas told the committee the original request was for $94,508.59 but the administration asked to amend the figure to $122,704.38 to capture several additional invoices identified during a final cleanup. "Once we close our books, the only mechanism that municipalities have, to pay prior year bills for budgeted items are to present them to city council for approval," she said. She described multiple reasons for the missed charges: missing purchase orders (POs), vendor delays in submitting invoices, and staff turnover.

Committee members pressed for details on the largest items. Miss Deimas said the unemployment assistance invoice was the largest outstanding item; she said the prior-year budget had sufficient funds in that line item but that the administration may need to request a supplemental appropriation depending on how the charge is ultimately processed. She also identified a $10,005.77 charge from United Rentals for a bucket-truck rental while the city’s own bucket truck was unavailable, and cited invoices from vendors described as a North Carolina plaque supplier and equipment vendors for the fire department.

Finance staff said none of the listed invoices were encumbered with POs at the time the charges were incurred, which is why they were not captured in open-PO reports. Miss Deimas described steps the department is taking to reduce recurrence: monthly reviews between the new budget director and department heads, reminders before fiscal-year close, and encouraging departments to use blanket POs for frequent vendors. "We send out instructions, reminders, what they need to do," she said. "A lot of the departments have been utilizing those." The new budget director has been meeting with department heads to review budgets and outstanding items, finance staff said.

Council members asked procedural questions and raised concerns about oversight. Councilor Smith, chairwoman of the committee, and other members noted that line-item reductions in last year’s budget could have contributed to the apparent underfunding of the unemployment line. Miss Deimas said the unemployment line had been reduced in the prior-year budget and that the office is reviewing whether a supplemental appropriation will be necessary.

The committee voted to amend the appropriation from $94,508.59 to $122,704.38, then voted for favorable action on the amended appropriation. The motion passed on an aye vote; four members were present and voted in favor. The committee then adjourned.

Votes at a glance - Motion: Adopt order appropriating $122,704.38 from the general fund budgetary fund balance to pay prior-year outstanding bills (amended from $94,508.59). Outcome: approved. Vote tally: 4 yeas, 0 nays, 0 abstentions.

Finance staff said they will continue monthly reviews with department heads and follow up if a supplemental appropriation for the unemployment charge becomes necessary.