Acting city manager Mr. Smith told the Homewood City Council on Dec. 22 that a set of budget amendments would correct accounting errors and bring nine of the city’s 24 funds into balance.

"We're not we're not moving money around. We're just this is all budgeting. We're correcting the budget," Mr. Smith said as he outlined the changes, which staff described as housekeeping to match the city’s financial software to approvals made earlier this year.

Mr. Smith said the corrections include removing phantom revenues and expenses that rolled forward in the grants fund because numbers were not entered into the finance system, using carryover fund balance to cover temporary deficits in the 7¢ and 4¢ gas tax funds, and shifting one salary previously charged to a municipal court fund into the police general fund so court funds stop running an operating deficit.

The presentation included these concrete figures: nine funds currently showed a deficit and require correction; the construction/bond fund currently has about $2,200,000 not yet encumbered for capital projects; the city proposes to use roughly $4,200,000 of carryover fund balance to help support capital spending this year; and administrative salary lines were trimmed by about $300,000 by holding vacant positions. Mr. Smith also said the city anticipates closing an environmental escrow fund with roughly $88,000 returning to the general fund if monitoring requirements are satisfied.

Councilors and staff discussed how the city accounts for long-lead purchases such as fire apparatus. Mr. Smith said a $2.8 million fire truck that is on order will not be paid until 2029 and therefore need not be charged to this year's operating budget; the council discussed options to commit fund balance over several years so the future payment will be reserved.

Several council members asked how the deficits arose; Mr. Smith and staff said the primary cause was administrative breakdowns during last summer’s budget process and mis-keyed entries in the financial software, not the absence of funding. Staff said they will finalize the line-item corrections and return for the council’s midyear review, tentatively scheduled for April or May, when the council will reassess revenues and revisit deferred projects.

What happens next: the council carried several public hearings to Jan. 12 (so speakers need not attend tonight) and will consider the formal ordinance or amendment language at future public meetings after staff completes the technical corrections and posts the updated amendment documentation.