Pawnee City auditor says FY 2024-25 budget rise driven largely by two grant-funded projects

City Auditor Julie Bauman told the Pawnee City Mayor and City Council on Sept. 9 that the proposed fiscal year 2024-25 budget shows a 13% increase over the prior year largely because the city has applied for two sizable grants to pay for projects such as street repairs. "A large portion of that is made up of the sizable grants that the City is hoping to receive," Bauman said, adding that "those two grants equal over $1 million dollars in funding."

The hearing, convened at 6:30 p.m. at the Cornerstone Community Building, opened after a motion by Council Member Susan Eisenhauer and a second from Council Member Donnie Fisher. Mayor Charlie Hatfield said some residents had asked about the apparent budget rise; he said he told them the city was "applying for multiple grants" and that grant revenues will be offset by corresponding grant-funded expenses. Bauman emphasized the point: the grants increase both revenues and expenses and therefore do not reflect ongoing increases to general operating revenue.

Bauman and Mayor Hatfield also explained that Pawnee City did not seek additional property tax revenue beyond the statutory 2% allowance. Bauman said valuation rose about 5% from 2023 to 2024, which reduced the "asking" tax rate by roughly 3%. "It is important for the Citizens to understand that it is not mismanagement by the City," Bauman said.

Council Member Susan Eisenhauer noted the council had not given themselves raises during her time on the council; Mayor Hatfield said it had been more than a decade since the last increase. Bauman described the municipal budget as "actually a working document all year long and not just a document that is thrown up on a shelf and never looked at again," and said she stresses year-round review to other municipalities she advises. Clerk Tamela S. Curtis and Deputy Clerk Kellie Wiers said they routinely monitor purchasing and fiscal practices.

Council members pressed for clarity on unspent appropriations and reserve transfers. Eisenhauer asked what happens to unspent park budget funds; Bauman said unspent capital outlay or operational savings increase the general fund cash but cautioned against transferring too much into reserves because the city needs working cash to pay claims and payroll. She warned that overly aggressive transfers can cause the city to have to transfer funds back to general checking to meet obligations.

Eisenhauer also raised the pool recoating project, saying the grant application might not cover the full estimated cost. Clerk Curtis noted that contractors have begun work on 10th Street and that upcoming capital payments will draw on the general checking account; Bauman recommended completing the city's annual audit before moving large sums into reserve accounts.

Mayor Hatfield asked whether council members should rotate responsibility for different funds; Bauman said some cities rotate responsibilities but cautioned that frequent rotation can make it harder for a council member to stay on top of a fund.

When Council Member Pat Hatfield asked what would happen if the grants are not awarded, Bauman said the budget would revert to the regular operating budget and the city would not spend grant funds that were not received. There was no public comment.

Council Member Eisenhauer moved to close the Budget Hearing at 7:00 p.m.; Council Member Vickie Zelenka seconded and a roll call vote was unanimous. The council did not take a formal vote on the budget at the hearing; next steps discussed included completing the annual audit and waiting on grant awards before any fund transfers would be made.