Saturday, May 25, 2013
Covering Dallas, Monmouth, Independence, Falls City and surrounding areas since 1868
October 30, 2012
DALLAS -- The Dallas City Council needs to find a way -- and soon -- to cut approximately $500,000 to make expenditures match revenues in the current fiscal year budget.
The cuts are necessary after the city discovered it will need to pay back a large sum of money spent inappropriately in 2010-11, along with other questionable budgeting practices.
Interim City Manager Jon Nelson said he will make a recommendation for those cuts at Monday's city council meeting.
Nelson was still drafting the proposal late last week, but said all options are on the table.
"There's a variety of ways that need to be looked at -- layoffs, not filling vacant positions, and a reorganization," Nelson said. "Everything gets considered and is being considered."
The budget issues were uncovered last month when Nelson was looking for ways for the city budget to absorb a $225,000 increase in PERS costs in the 2013-14 fiscal year.
The most serious problem was a fiscal year 2010-11 transfer of about $583,000 from the sewer systems development charge (SDC) fund to pay for an infrastructure planning study -- an improper use.
SDC funds are collected from developers and designated to expand systems, such as sewer and water, to handle additional service. The misspent money has to be paid back from the city's general fund within a year.
Another transfer in 2008-09 of sewer SDC fund interest earnings amounting to $784,000, while not illegal, could lead to problems down the road when the city needs to expand its sewer system.
Also of concern are transfers from the city's utility and fleet funds to the general fund to pay for administrative costs. It's an accepted practice for those departments to pay for administrative, finance and legal services. However, the amount of the total transfer has increased rapidly from $700,000 to $1 million in recent years. The result may be those funds are paying more than their fair share.
Nelson requested having until Monday to investigate the situation and prepare a cost reduction plan to balance the budget, but stressed the council should consider taking action soon.
"It's up to them," Nelson said. "I had asked them to have until the Nov. 5 meeting to come up with the reductions. If they don't like the proposal, they will need to identify where we go from here."
The Dallas City Council will meet Monday at 7 p.m. in the council chambers at City Hall, 187 SE Court St.
For more information: 503-831-3502.