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Adviser urges Beaver City to create capital and debt-service funds as council ties transfers to projects
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Summary
At a special Beaver City Council budget work meeting, administrative adviser Roger Carter recommended creating a capital fund and a debt-service fund, cautioned against budgeting anticipated grants before receipt, and asked the council to prioritize capital projects ahead of the May tentative budget.
Roger Carter, an administrative adviser invited to Beaver City’s special budget work meeting, told council members that local budgets should be structured to make priorities and transfers transparent and recommended creating a dedicated capital fund and a debt‑service fund for multi‑year projects.
“Budgets are amazing tools. They are not just dollars and cents ... They are communication devices to the public,” Carter said, urging the council to use fund structure to show what the city values. Carter walked the group through basic fund accounting, distinguishing the governmental general fund (Fund 10) from proprietary or enterprise funds such as water, electric and sewer.
Carter warned against recognizing anticipated grant or bond proceeds as current revenue before money is in hand. He advised, “I strongly recommend that the cities do not include the grant in their budget unless the money is in hand,” and gave a cautionary example of a city that overspent when grants did not materialize as expected.
Council members and City Manager Boomer reviewed specific line items the council flagged as unclear. Councilors asked about a roughly $1,050,000 transfer shown as a contribution to the general fund; staff and Carter tied that amount to prior‑year receipts and an insurance settlement that was carried in fund balance and is now planned to be spent in the current year. Carter recommended reconciling the corresponding expenditure entries and, where appropriate, moving planned multi‑fund project revenue into a capital account so the general fund’s 35% fund‑balance cap is not distorted.
The council discussed other large line items that need tying to projects: a $600,000 capital outlay for streets (likely linked to Industrial Park work and state or GOEO grants), capital outlay equipment variances (an $81,000 actual versus a $10,000 budget line), and recurring smaller maintenance budgets for parks and the rodeo grounds. Staff agreed to track outstanding county invoices for economic development (original budget shown as $20,000) and to clarify which years various revenues were realized.
On transfers between enterprise funds and the general fund, Carter said the practice is common but must be transparent. “If you transfer money as a transfer from an enterprise fund to the general fund, you’re to hold a public hearing on it,” he said, recommending separate, explicit line items so ratepayers understand how enterprise margins are used.
Next steps agreed by the council included: each council member providing a prioritized list of capital requests so the City Manager can include them in FY2027 planning (staff to aim for discussion at the April 15 council meeting), staff reconciling insurance and bond‑related revenues with actual expenditures at year‑end, and considering establishing a capital fund and debt‑service fund for clearer accounting. The City Manager said he will use the meeting notes to close FY2026 and prepare the tentative FY2027 budget for presentation in May. The meeting ended after an unrecorded procedural motion to adjourn was moved and seconded and carried without objection.