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Council presses for detail on 2025 budget amendments as finance staff recategorizes 2020 bond
Summary
Councilors on Sept. 9 pressed staff for a line-by-line breakdown of proposed 2025 budget amendments after noticing unexplained variances; finance staff said the town's accountant had misclassified a 2020 bond into the utility fund and that reclassifying it to debt service explains a large portion of the difference. Staff said any surplus in debt service is being reviewed with bond counsel and DEQ before considering transfers for sewer projects.
Council members pressed town finance staff on Sept. 9 for clearer detail about proposed amendments to the 2025 budget, asking for line-by-line comparisons to identify where revenue or expenses changed and why the amendment instrument’s breakdown columns were blank.
Councilors noted differences in revenue and expenditures across funds — the general fund and utility fund showed a combined variance of roughly $215,940 from forecast — and asked staff to provide the underlying detail before introduction and adoption. "We just need to know the difference because we don't know what's increasing, what's decreasing," one councilor said.
Finance staff (Dette) explained a major source of the discrepancy: "we determined that the accountant had taken the 2020 bond and put it into the utility fund when in fact in effect that bond is secured by general obligation. So that bond needed to be in the debt service," she told the council. The reclassification increased debt service entries in the amendment.
Staff and councilors discussed timing for formal introduction and adoption. The council expects an introduction at a September meeting (noted for Sept. 23 in discussion) and potential adoption on Oct. 7; staff said the CPA’s schedule will determine how soon detailed worksheets can be distributed. Council members asked that materials be sent several days in advance so aldermen have time to review and prepare amendments.
Budget discussions included how debt-service reserves affect available capital. Staff said they are reviewing bond reserve requirements with bond counsel Foley & Judel and the DEQ loan administrator to determine whether any excess funds in debt-service accounts could be transferred to capital projects such as sewer improvements or a gas-line connection to Aida Meadows. Any such transfers would be subject to bond covenants and legal review.
Separately, staff reported that the Keller Street lift station design is under way; the task order was signed and the project is included in the existing budget, though a completion date was not set.
Next steps: staff will provide the detailed budget-to-actual worksheets and the amended budget instrument in advance of the introduction meeting so councilors can review and flag items for amendment before formal adoption.
