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City projects operating surplus; moves to consolidate 52 bank accounts
Summary
City CFO reported an improving year-to-date financial position, a proposed neutral budget amendment to add capital and pension funding, and a plan to close 16 of 52 bank accounts to simplify accounting; committee requested follow-up on delinquent-tax collections and pipeline grant details.
City officials told the Budget and Finance Committee on Dec. 16 that the city is tracking to an operating surplus for 2024 after a year of lower-than-expected expenses and will consolidate multiple bank accounts to simplify accounting.
Richard Fromm, chief financial officer, told the committee the city held $23 million in cash at the end of October and about $16 million in specialty accounts. "We have significant cash of $23 million at the end of October," Fromm said. He said vacancies totaled 54 and seven employees were on workers' compensation. Revenues through October were about $56 million and expenses about $47 million; the city spent roughly $6.8 million in October, about half of which was pension-related. Fromm said cash improved from $23 million at the end of October to $24.9 million at the end of November.
The CFO described a proposed second budget amendment that he said is "ostensibly neutral" on paper but is intended "to allow the city to invest more into the capital and more into the pensions." Fromm said the amendment would reallocate budgeted amounts so increases in some areas are offset by decreases in others; the amendment was noted as being on the upcoming agenda for formal approval.
A major administrative change presented to the committee is a plan to consolidate bank accounts. Fromm said the city currently uses 52 bank accounts across five banks. Fifteen accounts are "untouchable" because they are tied to the city's bankruptcy and debt obligations; of the remaining 37 controllable accounts, the finance staff identified 16 accounts recommended for closure and three that require further research to determine if funds are dedicated. Fromm said some accounts showed only incidental balances of a few dollars while one account held $1.6 million that the state had deposited but not yet transferred into the general fund. "We're trying to consolidate that," he said, adding the change is aimed at simplifying reconciliation and getting better interest rates with a primary bank.
Fromm and the committee explained the distinction between funds and accounts: funds are accounting buckets that can exist across multiple accounts. The staff also identified 71 places where money had been posted during the year that did not serve a clear accounting purpose; the plan is to reduce the number of funds and accounts so routine operations and audits require less manual searching.
Members of the public asked for more detail on several items. One attendee asked what the "pipeline" figure of $17.4 million in the financial highlights referred to; Fromm said the pipeline represents grants either pending decision or likely to be applied for in 2025 and that a list of those grants can be provided to the public. Another attendee asked about delinquent tax collections; Fromm proposed a future committee presentation on the status of real estate and rubbish delinquent accounts and said improvements and legal process changes are being implemented to increase collections in 2025.
Committee procedure items recorded during the meeting included a motion to approve the minutes of Oct. 28, 2024, which was moved and carried by voice vote, and a motion to adjourn, also approved by voice vote. No formal vote tallies or named movers/seconders were recorded in the transcript.
The committee asked staff to provide: a public list of the pipeline grants referenced in the highlights; further research on two reserve accounts that may be dedicated to specific purposes before consolidation; and a follow-up presentation on delinquent-tax collection strategies.
The Finance Department said it will load monthly budget numbers into the accounting system in late December so departments have monthly controls and routine review beginning Jan. 1, 2025. Fromm said the change is intended to give departments periodic reporting capability instead of waiting for year-end budget entries.
The committee did not take a formal vote on the budget amendment during the Dec. 16 meeting; staff indicated the amendment would be presented for approval on the next meeting's agenda.
