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Blue Zones, Micro-Enterprise, statues, legal expenses, Lean all coming back to haunt Mason City’s 2012-2013 budget


This news story was published on May 13, 2013.
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Mayor Eric Bookmeyer has lead the charge on a number of programs that the city is paying for.

Mayor Eric Bookmeyer has lead the charge on a number of programs that the city is paying for.

MASON CITY – A memo released from City Hall is showing that pet projects from Mayor Eric Bookmeyer and the City Council have come back to haunt this year’s budget.

An amended budget for 2012-2013 shows the need to seek city dollars to cover $1.8 million in expenses, all explained in detail below. The total amount of reserves to be used is $555,055 (or 30.86% of the total revenues).

According to the City Finance Department, the “City Council approved projects for Micro Enterprise, the downtown statues and Lean Project. These were approved after the original budget was set and need to be amended” by an additional $45,000. The “Lean” initiative was championed by Eric Bookmeyer when he took office over three years ago.  NIT was told in 2010 that part of “Lean” was Bookmeyer – immediately following his election as Mayor – entering the offices of several City Hall staff and telling them that they would “get on board or else.”

The “City Council approved the Blue Zones initiative … an amendment is needed and reserves would be used” to cover expenses to the tune of $34,000.  Donations are still being sought to cover the cost of Blue Zones.

The city also needs to cover an additional $40,000 in legal expenses as the city is facing a number of lawsuits at this time.

Click here to see spreadsheet with more information.

———–

See below for more information:

Recommendation:
City Council should set May 21, 2013 as the date of public hearing for adoption of the FY 2012-2013 budget amendments.

Review:
Each year, the City has additional expenditures for unanticipated projects or services, projects that carry forward from the prior year, or additional expenses above the current budget. Iowa Code 384.18 (see attached code section) requires a city to amend its budget if the expenditures for a function area will exceed the amount originally certified. The amendment is required regardless of the expenditure. The amended budget must be followed for the remainder for the year. No expenditures can be made without the proper amendments. (see attached Iowa Code 384.20). The budget amendments must be completed and filed with the County Auditor by May 31, 2013. Council is asked to set May 21, 2013 as the date of public hearing for the FY 2013 budget amendments.

Attached you will find an itemized list of the proposed amendments. The list has been broken down into four funding sources. The sources include: (1) outside sources, (2) cash reserves, (3) unanticipated revenues & bonds, and (4) transfers and, where necessary, have all previously been approved by Council.

The amendments for the FY 2013 total $1,798,805. As indicated earlier, four sources are identified as revenue sources for these amendments.

(1) Outside Sources
The outside source for revenues includes grants, donations and reimbursements that total $1,125,351 (or 62.56% of the total revenues) for amendments. These are monies on hand or received during FY 2013. Due to the timing of the receipt of the revenues, the need arose to use the additional revenues for current year projects. The outside sources include the following activities and an explanation of each.

a. The Police Department recieved donations to purchase AEDs as additional equipment in the vehicles.

b. The Youth Task Force operates throughout the year primarily on grants. Each year they apply for grants and set their budget accordingly. This year they received additional grants and have incurred expenses pertaining to those grants. It should be noted, no additional City funds are used in these expenditures.

c. Due to the aging fleet for transit, the buses required more repairs then normal. This is being paid with 50% grants and 50% reserves.

d. Fair housing incurred expenses for legal fees in the prior fiscal year that were paid for in this fiscal year. Fair Housing grants pay for these expenses.

e. EEOC expenses will be greater than budgeted but are offset with EEOC grant funds.

f. Blue Zones Project expenses were incurred throughout the year. To date, the City has recieved a donation to help offset some of the costs and is working towards more donations to fully cover the expenses.

g. The City recieved a greater amount than anticipated in Hotel/Motel tax. According to the agreement with Visit Mason City, they are to receive a percentage of the collections. Since revenues were greater than anticipated, the City incurred a greater amount to pay out to Visit Mason City.

h. The City recieved donations for equipment replaced at Georgia Hanford Park.

i. The City recieved donations to pay for costs associated with the 457 train and entertainment costs associated with the 457 Event.

j. The City has been collecting donations for the dog park and using the money for initial costs associated with the construction of that project.

k. The City created a sledding hill in Georgia Hanford Park and used donations to pay for the project.

l. Ray Rorick Foundation gives money to the City to upgrade the park. Costs were incurred for upgrades and maintenance at the park.

m. FAA Projects budgeted in FY 12 were carried over into this fiscal year for completion.

n. The Ambulance Department purchased additional equipment as needed for the department from an insurance donation.

o. The City issued debt and incurred interest payments and costs associated with the FY 13 CIP. The funds needed to pay these costs was included in the total bond amount.

p. The City refunded outstanding debt and incurred interest payments and costs associated with the FY 13 Refunding. The funds needed to pay these costs was included in the total bond amount.

q. The Museum recieved a donation for the purchase of a painting. The Museum purchased a painting this fiscal year.

(2) Cash Reserves
Cash reserves are being used to finance some of the additional activities. The total amount of reserves used is $555,055 (or 30.86% of the total revenues). Council previously approved some of these items throughout the year.

a. Each year, the City must pay for the cost of certain medical-related services for retired police and fire employees covered under Iowa Code Chapter 411. There is no trend for these expenses and therefore, the line items are sometimes amended to include the additional costs.

b. This year the Police Department experienced an inordinate amount of expense due to aging mechanical systems. They had to replace a hot water pump and an emergency generator. Since these are above what is expected for repairs, an amendment is needed.

c. Each year, the City must pay for the cost of certain medical-related services for retired police and fire employees covered under Iowa Code Chapter 411. There is no trend for these expenses and therefore, the line items are sometimes amended to include the additional costs.

d. Due to the aging fleet for transit, the buses required more repairs then normal. This is being paid with 50% grants and 50% reserves.

e. City Council approved projects for Micro Enterprise, the downtown statues and Lean Project. These were approved after the original budget was set and need to be amended.

f. City Council approved the Blue Zones initiative. Donations are being sought at this time to cover expenses. However, an amendment is needed and reserves would be used until replenished by the donations.

g. Legal expenses for the City are greater than anticipated.

h. City Council approved Reso. 10-394 to include the City’s cost for owner occupied housing rehab.

i. City Council approved Reso. 11-246 for the premption project.

j. The 19th Street Overpass is completed with all costs being paid. A transfer is needed to zero out the capital project account.

k. The Recreation Depatment had several carry-over projects from the prior fiscal year. Since they were completed this year, but budgeted in a prior year, an amendment is needed.

l. The Library had additional repair costs associated with the building and is using trust monies to pay for the costs.

(3) Unanticipated Revenues
During the year, the City may experience an influx of unanticipated revenues from various sources. These revenues are above the initial projection for the budget process. Any unanticipated revenues that include additional expenditures need amendments. The total amount is $68,979 (or 3.83% of the total revenues needed for amendments).

a. The Police Depatment incurred training costs that were paid from outside sources. Since this was not budgeted, an amendment is needed.

b. The City incurred costs for ammunition, but recieved monies from scrap sales to cover the costs.

c. The City received money from the sale of old vehicles and used the funds to cover the costs of equipment for the new vehicles.

d. The ambulance service received funds from Cerro Gordo County for education reimbursement.

e. The ambulance service received insurance funds to pay for the cost of repairs to a vehicle involved in an accident.

f. The City received insurance proceeds to purchase equipment from Autopulse for the ambulances.

(4) Transfers
During the year, the City may experience a need to transfer between funds. These transfers are not included in the initial budget and are simply an accounting function to bring the budget in line. The total amount is $49,420 (or 2.75% of the total revenues needed for amendments).

a. The 19th Street Overpass project is nearing completion from the paperwork side. As the fund has a negative balance in cash, a transfer is needed to zero out the cash account.

In summary, the amendments total $1,798,805. The City received an additional $1,125,351 (62.56% of amendments) of grants, donations and bonding during the fiscal year.

General Fund reserves of $349,730 are used to amend the budget. Reserves not previously approved are included in the amendments and are identified in bold on the attached spreadsheet. The unapproved reserves amounts to $255,730. Included in that amount are items that are somewhat difficult to control such as Medical Service for 411 claims ($200,000) and legal fees based upon the need for legal services ($45,000). The remaining amount are the only unapproved amounts included from General Fund reserves.

An analysis of the General Fund revenues shows that LOSST collections will exceed the budgeted amount for revenues by approximately $200,000 and the excess can cover most of the additional expenditures proposed on the amendments sheet.

If Council would like to discuss any of the amendments, they are more than welcome to contact me.

Budget Impact:
This will be incorporated into the FY 2102-13 City budget.

Council Action Requested:
The Finance Department recommends City Council set May 21, 2013 as the date of public hearing for budget amendments for the FY 2013 budget ending June 30, 2013.

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14 Responses to Blue Zones, Micro-Enterprise, statues, legal expenses, Lean all coming back to haunt Mason City’s 2012-2013 budget

  1. Avatar

    Joe Reply Report comment

    May 13, 2013 at 8:33 pm

    Cut the $15k left of HRC budget, then charge Matt a fine for wasting city officials time.

    • Avatar

      #*#* Reply Report comment

      May 15, 2013 at 12:29 am

      Really?Joe sounds as if you maybe a friend of the Mayor,there is alot more to worry about then that 15,000 for HRC.Look at all the other $ money wasted.

  2. Avatar

    LVS Reply Report comment

    May 13, 2013 at 6:50 pm

    They spent money they didn’t have on things they didn’t need plain and simple. They used the money that should have been spent on maintaining the city and they used it on their pet projects. They must have taken lessons from Obama on how to say one thing and then do something else.

  3. Avatar

    rukidding Reply Report comment

    May 13, 2013 at 6:05 pm

    Cut Brent Trout, the EDC and all money to the chamber of commerce. This community could do without these expenditures and nobody would see any less activity in the area.

  4. Avatar

    mc business owner Reply Report comment

    May 13, 2013 at 4:09 pm

    Too bad the city can spend all that money on statues. Why can’t they use it to help reduce commercial property tax!

  5. Avatar

    LBS Reply Report comment

    May 13, 2013 at 4:01 pm

    Let’s say you’re Brent Trout and a good 100 pounds overweight. Grossly obese. Let’s say you’re the Mayor and good 60 pounds overweight at least.

    Wouldn’t you feel it would be your responsibility to lose some weight and live a Blue Zones lifestyle since you voted to spend tens of thousands on it?

    I would.

    • Avatar

      Joao Do Carmo Reply Report comment

      May 13, 2013 at 5:09 pm

      Remember “Do as I say, not as I do.”

  6. Avatar

    LBS Reply Report comment

    May 13, 2013 at 3:37 pm

    I like how someone had two high school boys wear blue shirts to represent Blue Zones. Look Blue Zones is doing something! lol

  7. Avatar

    Please check your facts... Reply Report comment

    May 13, 2013 at 3:09 pm

    Why are you trying so hard to make such a big deal out of this? Mason City amends its budget every year at this time (as do most other cities in Iowa) – nothing nefarious going on here.

    Get a grip, Katie, your ignorance is showing!

    • Avatar

      Observer Reply Report comment

      May 13, 2013 at 6:19 pm

      Why then would they approve the program, and yet not fund it? Why did they think it appropriate to spend taxpayers money on it? Why do they think it appropriate to give them office space, as it appears, without paying for it, in City Hall?

      It is true, there are unanticipated costs year to year. But the Council knew in advance there would be cost, and still continues to spend money on Blue Zones, yet no funds were budgeted.

      This is back-door spending at it’s finest. It would make a Chicago Alderman blush with envy.

    • Avatar

      Katie Reply Report comment

      May 14, 2013 at 11:49 am

      Nowhere in the Constitution does it say that health care is the job of government. Michelle O found out that she couldn’t force kids to eat healthy. They just plain didn’t eat at all rather than eat what she wanted them to eat. You can’t MAKE people be healthier. What’s next? Are they going to take away computers and TV’s so people can’t sit around? Or will they round us up and make us play volleyball every night or herd us down the streets for mandatory 30-minute walks? People still have free will, until this president tries to force more government mandates on us.

  8. Avatar

    Katie Reply Report comment

    May 13, 2013 at 12:36 pm

    Well, they should definitely start cutting with Blue Zones. It should never have been a government activity in the first place. Neither should health care.

    • Avatar

      Anonymous Reply Report comment

      May 13, 2013 at 3:17 pm

      Hey common, Blue Cross/Shield only raised rates 11percent this year for folks in the local area. You really don’t think they could afford to pay there own way do ya??? And do you really really think they would want it to work and all them go broke?? Just more BS citizens put up with. And from my observations at the local hospital I think there’s more than they can handle working there!!!