Herington approves $130,000 transfer from electric fund to cover shortfalls in general and sewer funds

The Herington City Commission voted to transfer $130,000 from the electric fund to the general fund to address current deficits and to allow accounting entries to cover a shortfall in the sewer fund. City staff said the transfer is necessary to finalize the draft audit and to make the sewer fund whole for the fiscal year.

Finance staff told commissioners that an earlier $27,000 engineering fee that should have been billed to the water department was identified and corrected, reducing the amount that otherwise would have required coverage. Staff described $46,000 in capital outlay for the sewer department that included major repairs (about $30,000 for rebuilt screw pumps), and a revenue shortfall of about $23,000 in the sewer fund. Staff said those combined items and previous misestimations of employee costs contributed to the need for the transfer.

Because the city cannot transfer directly from the electric fund to the sewer fund, staff said the $130,000 will be transferred to the general fund and then journaled into the sewer fund. City staff reported the electric fund had a balance in the range of approximately $1.8 million at the time of the meeting, and that the fund could absorb the transfer. The motion to transfer $130,000 passed on a recorded roll call.