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- Mona's sewer development project was listed as a 'work in progress' in the proposed budget for the coming year
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By Myrna Trauntvein
Times-News Correspondent
The sewer development project budget in Mona was not included in the proposed budget for the coming year.
"That is entered as a 'work in progress' and is entered that way," said Everd Squire, city director of finance.
The required public hearing to adopt the fiscal year 2010-2011 municipal budget in Mona was held prior to adoption of the new budget and acceptance of the final budget for the past fiscal year.
The public hearing was not only for consideration of the new fiscal year budget, but also to receive comment on the amended current budget.
According to Utah Code, a major responsibility of local elected officials, especially town or city council members, is to "appropriate funds" or to adopt and maintain a budget.
"I also transferred in $20,000 for the park improvement project," said Squire.
Squire said that, as far as the 2009-2010 amended budget was concerned, there were still monies coming in and monies going out. However, the budget needed to be completed and adopted at the meeting.
"If we don't get it right the first time, we have a chance to amend and fix the budget for the past year," he said.
There did need to be money in other funds which could be transferred in if there was a balance which was overspent.
"We try to keep a budget a little bit padded so we don't have to add money to the budget when we adjust,"Squire said. "The 2011 budget is just a best guesstimate."
Squire said that the total revenue for the coming year was expected to increase.
"We receive the sales and use tax each month and that is based on a complicated formula which indicates how much each of the municipalities will receive."
Projecting expenses is often much easier than projecting revenue.
In 2011, the city expects to bring in revenue of $52,000, in property tax collections, $130,00 in sales and use taxes, $23 in franchise taxes and fee-in-lieu of property tax of $10,000.
As for the sewer project, he said, once construction begins the budget will be amended at the end of the 2010- 2011 year to reflect the expenses paid out and the cost of construction to date. The project is being funded largely by grants.
In Utah budgets are "fund" based. That means that there are funds or categories which are used to pigeonhole money for various needs. In the state, for example, every city maintains a general fund. All revenue belongs to the general fund unless specifically earmarked for another fund.
There is also an enterprise fund which is used for services which charge a fee and which are handled like a business such as a sewer or water utility.
"The state does not care too much about these business accounts," said Squire.
There is a capital project fund where temporary funds are held that should be eliminated once the capital project is completed.
Funds used to account for special or specific revenue sources, for example grant funds or revenue legally restricted for specific purposes are held in special revenue funds.
In city budgets, expenses must equal revenue, except in the enterprise funds where a city can show a profit or a loss.
All unexpended funds, except capital improvement funds, lapse to respective fund balances on June 30.
One-time money can only be spent on one-time expenditures, he said.
Another point of importance was that a city's fund balance cannot exceed 18 percent of its projected revenue.
Special revenue fund accounts for resources legally restricted to specific expenses such a class 'C' road revenue, library fund and impact fee fund.
By state law the budget must be presented to the council by the first Tuesday in May and then be adopted by June 22.
Squire said that revenue projections were part science, part art, part philosophy and part luck. He looks at the past budgets for several years and balances what was actually spent with what was budgeted and then considers proposed revenues for the year.
The goal is to have some revenue sources exceed projections by similar amounts that other revenue sources lag behind projections.
One outside influence on revenue projections is utility rate changes, said Squire.
"The price of natural gas has climbed since 2007 and, it is forecast, that it will continue to climb," Squire said. |
