BUDGET COMMITTEE MEETING MINUTES April 13, 2021 Meeting conducted via Zoom (Meeting recording can be watched here or by going to https://videoplayer.telvue.com/player/w9sPsSE7vna3XTN_39bs1rEXjVWF0kfP/media/634166?fullscreen=false&showtabssearch=true&autostart=true, timestamps are also noted in these minutes)
Chair Shane Hunter called the meeting to order at 3:00 p.m. via online meeting on Zoom
Councilor Paula Hyatt
Councilor Stephen Jensen
Councilor Shaun Moran
Councilor Gina DuQuenne
Councilor Tonya Graham
Councilor Stefani Seffinger
Mayor Julie Akins
CITY MANAGER ANNOUNCEMENTS (Time Stamp 00:01:36) City Manager Pro Tem Adam Hanks clarified to the Committee on the package that was presented to the Committee in the first meeting including the proposed changes to the food and beverage tax and franchise fees. He reminded the Committee that these two items go together and that if one is changed it will change many other presented parts of the budget. He also specified that all these changes do not need to occur by July 1st so there is time to work with the Parks Commission and Council on any changes that are made.
Hanks added that these items are not the solution but are a step toward the solution and that these as they will explain further are a foundational piece that sets in motion policy changes and other financial decisions for the current and future biennium.
Lastly, Hanks spoke on a memo that was sent to the Committee in response to needed clarifications on assertions and accusations that came to Council, Budget Committee and staff (see attached).
Hunter spoke to the Committee on its role (Time Stamp 00:05:31). He clarified using examples what is a policy of City Council and what is something that the Committee will be working through. He also explained the format noting what information would be presented by staff in this and upcoming meetings. He asked that the committee direct questions to him as the Committee chair but that questions could be asked preferably after each fund has been presented by staff, as time will be given. Emailed questions will also be accepted.
APPROVAL OF MINUTES (Time Stamp 00:08:45) Bachman/Alphonso m/s to move approving the March 30, 2021 meeting minutes as presented. DISCUSSION: None, Voice Vote All in Favor, Motion Approved
PUBLIC FOURM (Time Stamp 00:09:28) Written Testimony Submitted (see attached)- No discussion from the Committee.
Oral Testimony Given – No requests to give oral testimony to the Committee were sent prior to the deadline.
FUNDS PRESENTATION(Time Stamp 00:09:58) Melanie Purcell, Finance Director presented to the Committee a presentation on Funds (presentation attached). She spoke first to Governmental Funds, what these funds cover, the challenges and the opportunities associated. She also spoke to the General Fund balancing priorities going forward.
Councilor Shaun Moran asked about a gap and imbalance that he noted within the budget book. He asked most specifically about the $5.2 million listed on page 12 regarding sustainable revenues and expenditures, as well as a reference to $2 million listed on page 16. This $2 million he referenced was to a structural imbalance of contingencies and notes that according to the text this will grow to 3 million over the biennium. His question to this is what is being done to balance this gap. Hunter suggested that this may be a question for after the presentation.
Mayor Julie Akins added that she wondered if it would be possible to ask questions during the presentation. Hunter responded that the question may be in the presentation and that he would prefer deeper analysis questions be written down and asked at the end or emailed to Purcell for an answer. Councilor Stephen Jensen stated that he agreed that the question asked would be best asked in the end.
Purcell went on to speak on key issues within the General fund, issues listed include maintaining COVID reduced operational staffing levels and looking at a holistic approach to utility rate relief. She also related this to the balancing approach that was used for the General Fund, these included focuses on types of activities, uses of a federal stimulus package and the possibility of more grants. Purcell went on to speak to changes in operations, including the full implementation of a cost allocation plan, deferral of vehicle replacement, less administrative or support staff and employees paying a higher share of insurance costs. Changes in service both current and future includes a reduction of hours for public access, use of technology, grant funds, as well as changes to General Fund revenues, and a possible look at a reduction in staff Purcell stated.
Next Purcell added information on rate relief and funding stabilization in addition to the General Fund forecast. General Fund revenues including a source by type, property taxes, property tax rate comparisons, user taxes, and charges for services including fees and permits, as well as transient occupancy taxes, and franchise fees were also presented to the Committee by Purcell. She also spoke to franchise fees as part of rate relief and funding stability.
Additionally, Purcell explained General Fund expenditures and sources by type. Going into more detail she explained the anatomy of expenses within this fund. She presented to the committee what is mandated and what is variable.
She lastly spoke to Policy decisions that will need to take place in the future.
Moran clarified his question asking what the overall structural deficit was and if it was the $2.5 million or $2 million discussed previously. She responded that where staff started was around $5.2 million prior to receiving state retirement and insurance numbers. She further explained that there is also a reoccurring debt between $2 million to $3 million deficit that needs to be addressed. The $5.2 million she explained is where staff started, and they then broke this down. She added they became comfortable drawing against this as an extra surplus had been built up. Without federal funds this would not be possible she went on to say, which will allow Council time to make decisions. Moran then asked if it was assumed that federal funds will go into the General Fund. Purcell answered that the purpose of the funds is General Fund revenue replacement, but there are assumptions on the use of the funds.
Saladin Amery, Committee Member asked Purcell if she could clarify that the information above would mean that in fiscal year 2022 that the budget would be running at a deficit of $2.5 million. Purcell explained that these funds are spread out over FY21 and FY22 and that the remaining balance is an operating deficit. Amery added that this would mean that the Committee is looking to find cuts of $2.5 million to bring this amount down. Purcell responded that staff is looking at a longer-term solution rather than looking at cuts within the first year as there is more fund balance then is required by policy. This she added could be used as a time to have conversations, so this does not reoccur in the future. Amery ended by asking if the hope would then be to have the balance go down to zero. To which Purcell confirmed.
Bob Kaplan, Committee Member then asked if previously listed items totaling over $3 million dollars were already reflected in the presentation or if these reductions would further change the overall number. Purcell stated that those items listed are already reflected in the presentation.
David Runkel, Committee Member asked about the proposed budget presented in relation to page 43 and a possible typo in the amount of $47 million that is listed for the budget amount. He also added that some of the numbers listed do not match up with what was presented. Purcell agreed that some numbers have since been corrected, sent out and reposted. He then asked when he went through the General Fund by department, he kept seeing major increases compared with the last fiscal year that ended June 30th. He commented that with the current financial situation departments should be holding the line. Purcell responded that much of what he was looking at was actuals in areas where there were significant vacancies and the proposed budget always budgets to 100%. Runkel furthered asked to clarify if there were vacancies in the last budget. Purcell responded yes saying that many of them still exist. Runkel asked about costs in Human Resources, to which Purcell stated that the increase in costs was due to outside counsel for labor negotiations. He further added that in past years the budget was gone through line by line and department by department and it would be helpful for the committee to look over the budget document and see where spending is proposed.
Amery asked about items on page 18 of the proposed budget in regards to the $2.5 million deficit that will be carried forward and cuts that need to be made to subsidize and take amounts down to zero. Looking towards the future he sees a deficit that increases from $2.5 million to $4 million. Purcell responded by noting the assumptions presented, focusing on the growth of labor contracts and employee benefits considering that this does not reflect any service changes. Amery then asked if these items were required by law or if this is an assumption of what it should be. He spoke to the City making less and the revenues streams being down by 60% and most citizens are making less as well, and this 5% increase cannot be justified. Purcell then explained that the City does not have control over the rate that the healthcare market is at, as well as PERS rates. These numbers she added are dictated to the City. She then explained the unfunded and funded liability. The influencing factors of programs can change this number and that is why she explained conversations need to take place surrounding this. Amery explained that since over 60% of the costs of the budget are personnel the City should be looking at ways to cut this amount down with unnecessary benefits like car payments.
Councilor Gina DuQuenne stated that looking at the General Fund over 50% is personnel. She suggested a roll back of wages similar to those in 2019-20 for Department Heads. She asked that Purcell bring this information back to the Committee. She added that it was important to do this and that she would not ask anyone to do anything that she herself has not already done.
Akins also suggested looking into contributions of PERS and Healthcare for employees. She also suggested a change in car allowances. She then asked about the previously passed public safety fee and what funds from this were used for. Hanks noted that some officers were funded from this revenue stream but staffing levels are still the same as 15 years ago, as part of the funding for more officers never came in. Hanks added that these funds go into the General Fund, but that Council could make a policy change to it. Hanks also added that many items related to staff are part of a contract. He suggested looking at the scope and scale of change, one of these being staffing levels including implications that go beyond the City and will affect the community.
Ellen Alphonso, Committee Member stated that she is less interested in the reduction of staff or benefits. She stated that the City needs to remain a competitive employer and retain good talent as this improves the efficiency of government.
Councilor Paula Hyatt asked about the strategy of the healthcare benefit package. She added that part of the cost share percentage has been shifted to employees, but nothing with premiums has been shifted yet. She asked as the strategy’s over the next two-three biennium’s in regard to the healthcare benefits, as this is one of the largest cost share drivers. Purcell stated that this is a conversation between Council, HR and Legal that is coming up. Many of these labor negotiations sessions that are coming up will look at consistency so that issues don’t come up she explained. She added as far as a strategy, a national committee that she currently sits on, are looking at these sorts of topics and recommendations. Hanks added that the employee share had been discussed in the Cost Review Adhoc Committee but these plans take time to fully implement. With seven different groups of staff he added that all of the elements in compensation need to be looked at as to what is being gained when making changes. He also stated that many times the City is not in the dominant position with these contracts and that bargaining structure of some groups is done differently.
Moran thanked Hanks for bringing this up adding that he had been a part of the committee looking at these costs. He added that the time has now come to look from analysis to results. He also stated that he agreed with Alphonso on wanting the highest quality of people and that the City pays a competitive rate. He stated that most employees are making over a $150,000 in total compensation which is up from the last biennium. Speaking to the current pandemic everyone needs be cognizant of what is at stake realizing that the citizens of Ashland are tapped out. He added that he would like to pull this back to the 2018-19 level. 40% of staff are not represented he explained and that along with department heads they should be realizing what rate payers are going through and that the committee should be willing to discuss this.
Moran went on to ask about the $4.3 million in aid that was coming to the City from the federal government and why it is being assumed to be for the structural deficit as he thought the use was for infrastructure. Purcell stated that these funds were specifically cited to be used for revenue replacement and that if Council chooses not to back fund the General Fund slashing services would take place. This she added is where Hanks and she had begun but that it had not been pretty and that this has been coming for a long time. She went on to say that the funds from the federal government will allow the City to make thoughtful decisions.
Councilor Tonya Graham stated that there was time for strategic planning. She further explained that out of the last budget cycle the deficit was clear and that’s when the Cost Adhoc Committee had been created. The strategic planning was set to begin when COVID hit so conversations with the community did not take place. She added that the City is facing the same structural shortfall as line items are large and are growing faster than the property tax. There is a desire she explained to keep everything the City has ever done, and this is done by scrambling, which she explained cannot be done anymore. She suggested that looking at first year changes and the capacity to have thoughtful conversations surrounding the budget.
Runkel asked about when departments would be presenting. Hanks noted that they are not scheduled to attend as this is a City Managers recommended budget and himself and Purcell would be addressing questions. Runkel then specifically asked about increases in the Fire department material and services and operations budgets. Purcell and Hunter discussed the best format to answer this question and agreed that it may be easier to answer this in an email. Purcell further explained that there was a massive change in the central services allocation plan particularly in areas of vehicle repair and replacement, which greatly affected Fire and Police. Additionally, included in this is replacement gear and an ambulance. Runkel further asked about costs in Administration, the City Manager’s office, Legal Department, Information Technology, Finance administration, Accounting and Risk Management. Purcell explained that these were due to labor negotiations, unfilled positions, increases associated with software, redistributed costs from the change away from central service, and an increase in insurance costs. He lastly asked about costs to Ashland Fiber Network which Purcell asked to be deferred to the next meeting as it is an enterprise fund. Runkel asked about this being in the General Fund part of the budget to which Hanks responded that it was organizationally there, but it was indeed an enterprise fund. His last questions had to do with increases to Public Works. Hunter advised that those specific of requests would be best in an email. Hanks then stated that most of Public Works are in enterprise funds, which would be gone over in the next meeting. Runkel further asked about these funds being in the General Fund portion of the proposed budget and Hanks replied that just Public Works administration and engineering were a part of this.
Hyatt went back to the question about strategy. She added that some decisions made previously may be making it more difficult given the current financial situation. She added looking back at the 2017 budget that some decisions had been made regarding the parks assessed value and policies on the locations of parks. She further explained that the allocation in the last biennium had dropped and that parks is being setup in a way that is not advantageous or supportive of the parks mission. She questioned if the comp plan needs to be revisited in regard to the location and maintenance of parks. Looking at undeveloped lands she explained could be looked at as a solution to the affordable housing situation, which would also add a greater tax base which would allow for more funds to sustain parks. Property she added needs to be used to encourage people to move to Ashland, so that tax revenues are not lost and if revenues are lost it will become increasingly hard to fund value added services like parks. She ended by explaining the contract that this body has is the charter and what is listed is what should be provided to the residents, so the input from the Citizens is vital. Looking at the charter she added would make the priority fire, police and then parks. Other decisions she noted are making it hard to support the mission of parks.
Hunter put the meeting into a break at 4:42 p.m. asking that any other questions regarding the General Fund be emailed to Purcell as the committee would be discussing the reserve fund upon its return. (Time Stamp 01:41:58)
Hunter called the meeting back to order at 4:51 p.m. (Time Stamp 01:51:16)
Hunter asked that the presentation on the reserve fund begin.
Moran asked about a point of clarification, by stating that Hanks had stated that Ashland Fiber network would be discussed at the next meeting but wanted to know if there would be a way to discuss the information technology department overall and not just Ashland Fiber Network, as there are questions that pertain to that department. Hunter responded that this should be possible. Hanks noted that this is one department with two divisions one being an enterprise fund.
Amery also made a request regarding a report that he thought previous Councilor Dennis Slattery had done regarding a deep dive into the financials of Ashland Fiber Network. Hanks stated that he could seek this out to see if it had occurred but that he was not aware that it had.
Purcell spoke about the reserve fund, its uses, and its revenue stream. (Time Stamp 01:53:48) (presentation attached). Hanksspoke to the policy resolution on the reserve fund that had recently been adopted. She then went on to speak about the parks General Fund, this fund she noted is funded by a transfer from the City General Fund. (Time Stamp 01:56:47) Hanks added that the conversation being had makes it seem that the food and beverage revenue is a windfall to Parks, which is not the case as this is only a change in revenue stream.
Moran asked about what the rationale was for doing this if the General Fund is still liable, as he understands that the goal is to export the volatility of the revenue stream. He added that there are assumptions being made about the levels to the food and beverage tax. Purcell added that this is true but that the General Fund would not cover costs to the Parks fund to make up for any deficits. She spoke to Hyatt’s comments about goals for Parks. Moran further clarified if this would mean that there was no other money but food and beverage tax going to Parks. Purcell explained that there will still be a property tax transfer as set by ordinance that will decrease over time as it is a percentage. Hanks added that there is a connection for Parks and food and beverage tax funds. He also explained that other Departments such as Police, Community Development and Fire are regulatory required, and that Parks can be more flexible with funding.
Amery asked what the purview of the Parks Department was outside of maintaining City wide parks and open spaces.
Councilor Stephen Jensen asked about a point of order as to whether the conversation was being diverted from the task at hand. Hunter stated that he thought that the Parks General Fund presentation was finished and that the meeting could be opened for questions.
Kaplan asked about the next two fiscal years presented for the Parks General Fund revenues and their balances. He also asked why the revenues were so much lower than the expenses.
Hunter ask to confirm that Jensen’s point of order was addressed and Amery stated that his question was not to waste time, as future revenue streams were talked about he wanted to know if Parks would be responsible for helping these revenue streams come into the community. He wants to make sure that they are getting a stable revenue stream in order to do this. As cuts are still being talked about, he added there are also increases in lines that are relying on future incomes. In the past he explained these incomes were not stable and can be influenced by unpredictable factors.
Purcell confirmed after Hunter asked if the Parks General Fund presentation had been completed. Jensen confirmed that this satisfied his point of order.
Kaplan explained his question. Purcell answered that Parks is drawing down their ending fund balance and that along with the City, Parks will have to make some decisions going forward as to what happens next. Kaplan then asked what the ending fund balance was for this fund. Purcell stated that she did not have this but she would get this to the Committee. Kaplan asked if this was a part of the recent policy change, which he did not think it was. Purcell stated that it did apply to the Parks but that there was a little more discretion in their decision to abide by this. Hanks added that this is a long-standing part that is weaved between the Budget Committee, Council and Parks. The decisions of Council are constrained as it relates to Parks due to them electing a separate body and what they do with their money is the decision of this body. Kaplan explained that he saw that the ending fund balance for parks was $1.3 million and that most of this would be used up.
Hyatt began by stating that by knowing that there was an understanding that the Citizens’ Budget Committee was setting the allocation for Parks that would then be approved by Council, the point made by Amery was critical to understanding the expectation of the services provided. After looking at the combination of funding streams she added which include tax revenues, combination of food and beverage charges and charges for service she believes having the property taxes will allow the City to pay operational costs. Reading Ashland Municipal Code 4.34 regarding Food and Beverage, the City she noted is only allowed to do repair, rehabilitation, planning and acquisition not operations. Hyatt further added that she feels there needs to be a mix with a little bit of property tax to cover the operational portion and that if agreed to by the Committee, food and beverage tax can be used to work on the other aspects. She stated that she felt that this was a part of the decision that needs to be brought back to the people during the year when decisions need to be made. Her belief is that Parks will help bring the City back from a very difficult economic situation and they need to set up as such.
Moran added that citizens have been willing to pay the property tax because it helps to fund Parks. His concern was that if Parks draws down on their ending fund balance that it will be blown through in the next two years for operational expenses and this feels as if the can is be being kicked down the road again. Moran suggested a conversation on what happens when the ending fund balance has been drawn down, just like in the City’s General Fund. He added that in the City’s General Fund revenues can be raised, cuts can be made, or the 40 million in ending fund balance from citizen paid high utility bills over the last ten years, which he does not think is the solution to solve the structural deficit. He would like more clarification he added regarding drawing down the ending fund balance if this was to be approved and what would happen when this money is gone.
Councilor Stefani Seffinger added that over the years Parks has been asked to do more and more including Senior Services and help with Homeless Services.
Akins reiterated that it was important to note that the City cannot set policy for Parks and that staff for Parks report to the Commission. She added it was important to note that whatever money is given to Parks will be theirs to set the priorities with. Pioneer Hall and the Community Center she noted still belong to the City and Parks does the rentals on them. She went on to say that her hope is to solve the issues on these soon. Akins also added comment on the affordable housing fund and the marijuana tax. She wanted to have dialogue around this and the funding source of a sale is not a stable revenue source she stated. She requested Purcell’s response on this. Purcell responded that this was in today’s agenda.
Graham wanted to confirm something that had be previously stated by Kaplan and Akins regarding the expenditures for Parks. She added that it seemed to her that the Committee can decide on how much is assigned to Parks but it’s their decision around whether to draw down their ending fund balance. Her assumption she stated was that Parks would do something similar to what the City has done looking at the structure over time and adjusting plans. Purcell responded that this is what is at the heart of the conversation being had.
Purcell then presented information on special revenue funds. (Time Stamp 02:23:01) (presentation attached). These include the Community Development Block Grant, the Street Fund, Airport Fund and the Housing Fund. She explained what each was, how revenue was collected and how it can be used.
Akins responded to the explanation on the Housing Fund and how it does not answer the question on long term stabilized funding, which she understands would be a policy discussion. She further asked if the option to put money from the sale of surplus property was used, would there also be an option to put the money back in for affordable housing after it has been put in the General Fund. Purcell stated that this was possible. Hanks added that this is a Council decision, but it is capped at $100,000 with excess marijuana tax going into the General Fund.
DuQuenne added that she agrees with the variability of the surplus properties and that the marijuana tax revenues seem to keep giving. She believes that the funds from the sale of surplus property should go into a strategic plan keeping marijuana tax funds solid in the Housing Trust Fund. Hanks responded that as this a policy decision, that Council would need to decide what to do with the proceeds with the sale of surplus property. Council will need to make a decision he added on the level of resource allocation that they want to be put toward affordable housing.
Moran added that it needs to be clear that what is being proposed on slides 54 and 55 is more debt that taxpayers will have to pay for Streets. Further looking at page 204 of the proposed budget he noted that in the future, $7 million of debt will be needed to fund Streets. He believes this a stretch considering the funding source that is had at this time. This leaves Streets vulnerable as the solution will just be to ask taxpayers to pay more debt which he believes is not a solution. Hanks added that this is what is in ordinance, and that Food and Beverage Tax is there to utilize debt servicing larger projects. He explained if Council was interested in cash financing of projects that is what has been intended. If cash funding is done, then cash will be held longer, and the projects will increase in cost before the City is able to get to them. He added that there has to be a balancing act with debt servicing to get to projects before they are broken. Moran agreed with this and stated that he has proposed not raising utility bills but accessing debt markets which are the cheapest in American financial history. Hanks responded that is what is being done. Moran responded that he thought what was being said, as if it was the only option, he is trying to spur a conversation about some optionality. He added that in the past debt servicing should have been used as opposed to higher utility bills. Hanks then explained that revenue is needed to pay the debt service, however. Purcell clarified that debt service is premised on the idea that you are either using food and beverage which already exists or as proposed in the budget the use of franchise fees. This would mean the burden of utility costs would be lowered by the franchise fees. The idea is to align them so rather than rate payers or taxpayers being a part of a utility tax or bond referendum, the budget is recommending the opposite
Graham asked about the Clay Street Project which is fully grant funded and if this project would be taking place in this biennium and if it is a part of the funding listed. Hanks stated that this may be towards the end of the biennium but he would need to check on it as changes have been made in the grant, but he expects that it may be in the engineering stage but maybe not construction.
DuQunne asked about the $4.3 million and if it can be set aside to be used for future Streets projects. Purcell responded that it could not be used like this, as it has not been permitted under the federal statue, but this could change. Hanks added that this a great conversation to have, if this was allowed and because of that the question would be asked about what doesn’t get funded in the General Fund. DuQuenne asked that the question about rolling back rates for Department Heads as she wanted to make sure that it was answered and brought back to the committee at its next meeting. Purcell stated that she would get this information out to the Committee.
Moran stated that he wanted to respond to Hanks’ comments and pulling the fear factor card by saying its Police or Fire. He explained that Runkel’s comments that Hanks’ office is indicating an increase a couple hundred thousand dollars, Human Resources at $150,000, Information Technology at $200,000 and Legal up $100,000 should be looked at. He further commented that the Human Resources and Legal Department’s cost $1.1 million. He asked if other ways had been investigated to reduce costs in these areas including Courts, Community Development, and the Administration office. He stated that he would caution the group that no one is saying for cuts to Fire and Police and that Hanks’ is the only one saying this. What he added that he is talking about is having a broad discussion on other ways to “peel the onion” in looking at the General Fund, which may entitle that Department Heads and senior staff take a pay cut. He wanted to prevent or be hesitant about pulling the Police and Fire card when it comes to cuts. He asked that the narrative around this be changed.
Graham stated that she would appreciate it if staff were spoke to with respect and that characterizing this as pulling a fear card is inappropriate. She then asked Hunter if there was another presentation in comparison to the time. Hunter and Purcell both responded yes.
Purcell presented to the Committee the Capital Improvement Fund, Parks Capital Improvement Fund, Debt Service, what they are, what revenues are used and what each is used for. Debt service she spoke to is set by an approval of the voters. (Time Stamp 02:42:25) (presentation attached).
Alphonso asked about the Capital Improvements Fund. She noted that she saw a swing up in the expenditures and asked of the expectation is that this will operate in a deficit below the revenues or if the budgeted plan is that this will be a balance budget. Purcell responded that this will be a balanced budget and that funds had been set aside towards some significant projects. She added that facility operations had been taken out of this fund due to it not truly being capital. This was put into General Fund as an operation in Public Works. Hyatt commented that many points are put out as places to look into and thanked staff for the explanation on the $150,000 in Human Resources as being for labor contracts. She also spoke to the thoughts behind Municipal Court which she thought is required by charter, operate four days a week and that it must be funded unless there is a charter change. Purcell responded that it is a chartered department but that she would need to check into the hours of operation. Hanks added that he thought there was some flexibility in the hours but that there are timelines that have to be met.
Moran asked about the Central Service Funding merging into the General Fund. He noted that as of December 31st that there was about $2.5 Million that was in the Central Service Fund that was growing and that at the end of this year $3 million would be reflected. He then asked why is this happening as these are fees that should be charged to the various funds and if the idea is that once the Central Service Fund merges into the General Fund, the $3 million in ending fund balance will be returned to the various funds that it came from. Purcell responded that she does not see there being that high of a balanced due to the distribution in the current biennium and how costs are allocated. She added there is an offset due to more vacancies then expected in the Central Service Fund, this balance will roll into the General Fund. She also stated the fund does not operate to make a profit. However, if there is one its stays with department that receives the funds. The cost allocation plan she explained is part of this understanding of not having departments subsidize. Moran explained that most of the disproportion funds came from the enterprise funds and that this may explain the urgency to merge the Central Service Fund into the General Fund. Purcell explained that this is not the case.
Kaplan spoke to Moran’s point and asked about the standards from auditors and if these conformed to good practice. Purcell stated that she would check back with the Auditors to see if this something that is tested. She added that as this was spoken to earlier that it is her understanding under federal regulations there could not be a deviation from the plan that was developed by outside consultant as it dictates what should be charged.
Graham asked if it was more difficult to compare from previous biennium’s as the change has taken place from the Central Service to General Fund. Purcell stated that in some cases that she can note in the future, there may be an issue, but the majority of the funds can be tied back out as changes were made in the code structure.
Graham/Bachman m/s the adjournment of the meeting. Discussion: None. DISCUSSION: None, Voice Vote All in Favor, Motion Approved Meeting adjourned at 5:56 p.m.