Ione council workshop: ARPA deadline, missing audits and tight FY25‑26 budget prompt staff direction

Ione — At a special Ione City Council budget workshop on Aug. 27, council members and staff focused on outstanding audits, the remaining $1.5 million in American Rescue Plan Act (ARPA) funds that must be obligated under federal guidance, and a proposed fiscal year 2025–26 budget that does not include the policyized transfers to reserves.

Finance staff also told the council the city’s multi‑year audit work is nearing completion and that staff will return revised year‑end figures at the Sept. 16 meeting. Councilmembers and commenters pressed for clearer tracking of transfers between funds and questioned rising outside legal and investigation bills.

The council workshop matters matter because the ARPA guidance includes a Dec. 31, 2024, obligation deadline for new obligations and because Ione’s audit backlog and legal costs affect how much the city can place into operating and capital reserves under its 2023–24 policy.

Finance manager Andrea reported staff correspondence with the city’s audit partner and said the auditor will complete a final review between August and September, after which staff must prepare the management discussion and analysis (MD&A) that accompanies the audit. Andrea told the council a worksheets of transfers between funds, prepared by staff member Jane, will be updated and presented at the Sept. 16 meeting. "There's no missing $3,000,000," Andrea said, explaining that the amount represented transfers between funds rather than missing cash.

On ARPA, staff member Debbie read Treasury guidance in the meeting packet and told the council, "Any funds not obligated for eligible uses by 12/31/2024 must be returned to the Treasury." Debbie recommended city staff meet with department heads to pull qualifying receipts and match each expense to permissible ARPA categories so the city can use the remaining ARPA balance. "My recommendation is that I meet with the department heads and get their receipts ... so that we can utilize the remaining $1,500,000 of the ARPA funds," she said. The council gave direction for staff to proceed with that matching and to return with documentation at the next meeting.

Public comment raised two recurring concerns. Resident Dave Johnson asked about a previously approved censure investigation budget of $15,000 that he said appears to have grown: "it was $15,000, and now it's almost up to 29,000 ... we're approaching 40,000," he said. Andrea replied that most of the charges fell into FY24‑25 and that the bills will be reflected in the year‑end report and accompanying budget adjustments on Sept. 16.

A public commenter and a council member also pressed staff about high outside legal expenses. Andrea told the council that projected legal costs for the year are higher than budgeted — she estimated the year‑end legal expense will be closer to roughly $35,000 than the $20,000 budgeted — and urged careful management of legal spending.

On capital matters, staff and council members described a completed interconnection pipeline between the pond plant and the tertiary plant that staff said allows the city to recirculate and better treat water. A staff speaker announced the town "is officially interconnected," which staff and council said will provide operational flexibility and could reduce outside water purchases for facilities such as Howard Park.

Council and staff also reviewed the proposed FY25‑26 budget packet. Andrea said the draft budget is tight and based on revenue projections without relying on un‑audited fund balances; because the city has not completed audits covering several years, the budget does not include transfers to reserves. "There is not ... $998,000 that shows — we do not have the funds with this budget to put to that reserve," she said, referencing the council’s 2023–24 reserve policy (5% operating, 7% capital).

Staff identified three items that make the draft budget feasible: ongoing interest revenue, Measure M receipts that are tracked separately, and the current staffing model of a mostly volunteer fire department that keeps general fund costs lower. Multiple council members said the city must plan for the future if volunteer coverage declines because converting to paid staffing would materially increase the cost of fire services.

Additional administrative items discussed included: the creation of an activity code for the Picnic Hill grant to track receipts and expenditures; questions about developer‑funded sewer and intersection work related to the Gold Village development and Axios Homes; a review of interfund loans and whether general fund payments to enterprise funds should be treated as loan payments; and a review of the salary schedule and a reminder that any off‑budget contract changes should be brought to finance and the clerk for a budget amendment before council approval.

The council held a closed session later in the evening on "anticipated litigation with legal counsel." After returning from closed session, the mayor reported that "information was received and direction was given." The meeting then was adjourned.

What happens next: staff will return an updated FY24‑25 revenue‑over‑expenses report and the ARPA receipts documentation at the Sept. 16 meeting. Council asked for tighter controls on off‑budget expenditures and for clearer documentation when funds are moved between accounts.

Questions or requests for documents mentioned in the meeting were assigned to staff; council did not take formal votes on budget adoption at the workshop.