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Ocean Shores finance committee probes drop in general fund to $1.7 million
Summary
City finance staff told the finance committee the February low reflected timing and one-time expenses, not only changes to cost-allocation; staff described a shift to quarterly true-ups with enterprise funds and pledged to provide more detail on LGIP allocations and the new utility fund accounting.
Ocean Shores finance staff told the city’s finance committee on Tuesday that a fall in the general fund balance to about $1.7 million reflects timing and one-off expenditures rather than only reductions in transfers from enterprise funds.
The committee opened with a public comment in which a resident asked whether cost-allocation transfers into the general fund had been eliminated and why LGIP interest earnings appeared to rise. Finance staff answered that the city has moved to a baseline cost-allocation method with quarterly “true-ups” to reconcile what enterprise funds owe, and that prior outside cost-allocation work had inflated transfers.
“...the cost allocation that we previously had through the other company that we paid $25,000 for did huge deficiencies on things and they utilized those deficiencies to inflate the number that came from those enterprise funds into the general fund,” finance staff member Shante said, explaining the change to a lower, baseline approach and quarterly reconciliation. She added that some revised allocations are substantially smaller and that the city will review them each quarter.
Staff told the committee that a large, early-year insurance payment — “specifically 319,000” — plus the absence of one-time revenues such as grant and ARPA receipts in recent years account for much of the drop. “Our biggest source of revenue and our most diligent source of revenue is property taxes,” Shante said, adding that those receipts and seasonal patterns typically push balances back toward target later in the year.
On LGIP (Local Government Investment Pool) interest, staff said apparent increases were driven by temporarily larger cash balances held in the LGIP — including business-license receipts and county deposits — and that interest is then allocated among funds according to set percentages. Staff said they would research and report how those allocation percentages were established.
The committee also asked about an apparent negative, biennium-to-date revenue figure in the new utility fund (Fund 144). Staff explained that budgeted amounts remained on old Fund 439 while expenditures are posting to Fund 144; until the quarterly true-up and transfers occur, the new account can show a negative position on paper even though the city will adjust the books to reflect actual revenues and transfers.
Committee members pressed for additional detail. Staff committed to providing the finance committee with a more detailed memo and to performing quarterly reconciliations to ensure enterprise funds and the general fund are aligned.
The committee adjourned after scheduling follow-ups; staff said the finance committee packet and the budget materials are available with the agenda online.
