New controller outlines revenue variances, PSAP fund shift and ongoing delay in audited ACFR

Jeff McKinnon, Bloomington’s new controller, presented the fiscal committee with a review of 2025 revenue and appropriation variances on Feb. 15, explaining that some large differences reflect where the city deposited receipts rather than an overall loss of revenue.

McKinnon said a periodic supplemental distribution of local income tax from the state produced unexpectedly large positive variances in controller office lines — he cited roughly $1.3 million hitting the general fund and about $1.7 million hitting the economic-development LIT fund — and said the city will know the supplemental distribution amount by about May 15.

The controller also outlined a structural change that affects reported figures: dispatch-related LIT revenue was moved into a separate PSAP (public-safety answering point) fund last year. “Dispatch expenditures and revenues were appropriately recorded in the PSAP,” McKinnon said, but the reallocation makes public-safety lines appear deficient even though money was received and spent in a different fund.

McKinnon walked the committee through remaining appropriations (which he emphasized are not cash balances) and identified a large unspent appropriation in the human-resources salary account as well as an unexpectedly large unspent health-insurance line; he agreed to investigate and report back.

On audits, McKinnon said bringing the city’s audited Annual Comprehensive Financial Report (ACFR) up to date is his top priority. He described the multi-step workflow — city staff compile accrual data, consultants translate and package it, and the auditor performs testing — and told the committee the process remains underway. “We are still probably, from talking to the two firms involved in this, probably still a few weeks out from the translation of the ACFR,” McKinnon said.

Members and public speakers pressed for firmer timelines and oversight. Resident and frequent fiscal commenter Kevin Keough told the committee that the 2024 ACFR deadline was missed and that delivering audited financial information late is “no longer decision useful” for governing and budgeting. Keough urged the committee to direct the administration to target publication of audited ACFRs within six months of year-end and to pursue the Government Finance Officers Association’s reporting standards as a governance objective.

McKinnon responded that staff have prioritized the audits, that earlier fiscal years’ backlogs and new accounting standards (for leases, capital assets and subscription-based IT arrangements) increased the workload, and that the 2025 AFR (unaudited report) will be posted on the controller’s website before final audited translation is complete.

The committee asked for additional detail on interfund transfers and said it wants follow-up reports that break down where revenue sources are flowing into each fund; McKinnon agreed to provide an interfund-transfers report and other requested clarifications.

The committee did not take formal action on the ACFR timetable at the meeting; members agreed to continue oversight and to request follow-up information from the controller’s office.

The controller flagged that state law changes referenced in the meeting (discussed as SEA 1/SCA 1) will likely reduce property-tax receipts over coming years and that the city should plan for tighter budgets.