Minutes 11/09/1976 - Laserfiche WebLink

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28: TUESDAY NOVEMBER 9, 1976 - I suggest this change for the following reasons: 1. I think the resulting budget, audit and quarterly financial statements will be easier for Councilmen and citizens to understand. ,.- I feel the current accounting system is confusing. It requires Councilmen to spend countless hours tracing money from fund to fund. The General Fund, which is suppose to account for the City's operating revenues and expenses, is misleading because most of the City's operating expenses are included in other funds, and because surpluses and deficits are spread throughout the funds. And I feel this is not fair to the citizens. City finances should be presented in the simplest form possible so that anyone who wants to know about them can easily find out. 2. I can find few reasons to support the existence of the ten separate funds which I recommend merging with the General Fund. Separate fund accounting should be continued for the utility funds (that is water, sewer, electric) because, in theory, they should be operated as private businesses. They should have separate profit and loss statements and balance sheets. Also, separate fund accounting is required by government regulations for funds such as Sewer Bond, Revenue Sharing Trust and Federal Programs. The main reason given for the existence of the ten funds, which I suggest merging with the General Fund, is the same given for separate fund accounting of utilities--so that we can tell from year to year how the various funds are performing. The new system I propose will still tell us how much money each account is making or losing on a yearly basis, the difference is that the cumulative surpluses or deficits of all the operating funds will not be shown on an individual basis, but will instead be combined into one figure and reported under the General Fund. The auditors have suggested that the Central Stores Fund not be merged with the General Fund at this time pending further study. 3. The change will enable citizens to know the surplus or deficit position of the City's operating budget without the necessity of tracing through multiple funds. For example, the General Fund showed a deficit of about $6,400.00 on June 30, 1976, but to get a clear picture of the financial condition of the city one must add to this dificit the $97,000.00 City Transit Deficit, the $24,000.00 School Building Construction Deficit, the $68,000.00 Prison Fund Surplus, and the surpluses and deficits of the other funds. The new system which I propose will provide one surplus or deficit figure for all the operating funds.