August 15, 2020

EP City Council sifts through "Special Revenue Accounts"

Future budgets will show accounts as separate

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During the review and eventual adoption of a 2020 city budget last October, members of the City Council asked about any funds that are may not be listed in the budget but are still in city accounts. Council President Bob Britto had asked finance Director Malcolm Moore about the status of the "Live Nation fund" which was to provide the city with monies from the summer concert series held at Bold Point Park. "A portion of proceeds from Live Nation (concerts) was supposed to go directly to recreation. Did that happen," asked council President Bob Britto during a budget workshop in October. City finance director, Malcolm Moore replied that "yes, the money does go there. Currently we have $67,476 cumulatively. We haven't been spending the money, we're stockpiling it. This is our third year. We may be getting one more deposit," added Moore. Moore said that the city receives about $1.20 for each ticket sold for the concerts.

At that October 2nd workshop, the council had discussed decreasing a line item for city fireworks which had increased for this year. City Recreation Director Diane Sullivan explained that it was more costly to keep the traditional July 3rd date for fireworks and music. "July 3rd is a very popular date for most firework venues and there aren't many pyrotechnic companies available. To keep the vendor we have will cost a little more money but is still reasonable for what we get," said Sullivan.

"In the discussion we had on fireworks, if we had known about this account we could have avoided this expense problem," said Britto at the time. "Yes, and because we're not voting yet on the budget, we can adjust accounts to reflect this available money for recreation," offered at large councilman Bob Rodericks. "It appears that this money can be used for any reason in recreation and lessen the budgetary impact," said Rodericks. "I agree," said Britto. "We had to cut or scale back when we could have used this money (for fireworks), Britto added. Ward Two councilwoman Anna Sousa stressed the need for the budget book to list all revenues alongside the expenditures. "Some things should go to specific accounts and not just the general fund," said Sousa. "In this case, this fund isn't anywhere in the budget. How would we know," asked Rodericks.

During the October budget workshops Ward Three councilman Nate Cahoon also brought up the fireworks expense account in a light moment. "Diane, how long did we haggle about fireworks last night," Cahoon asked Recreation Director Diane Sullivan. "You could have just said, dude we have the money, leave me alone," to which Sullivan chuckled. Cahoon was referring to the Live Nation account.

Moore told the council that the state budget commission was responsible for changing the process. "There used to be all kinds of money set aside for specifics like police detail, fire rescue, etc. The budget commission came here and said, no, it all has to go to the general fund," Moore explained.

"But this is long after the budget commission left," replied Britto. This money was specifically for recreation and parks. We wouldn't know because it (Live Nation money) wasn't brought up," asserted Britto. "It could impact how we budget for expenses."

"So it's not anywhere in the budget," asked Rodericks. "No, it's in a special account, I'll have to see how we can spend the money," said Moore. "I'm okay with saving the Live Nation stipend for a rainy day," Rodericks added after the meeting. "But I believe it's raining now at Pierce Stadium and we can make some much needed and much delayed repairs with a portion of this money, and not add to the regular budget. I think it's important for resident to know this. We're often asked what residuals are we getting for development like Live Nation, Kettle Point, etc," he added.

The Live Nation account brought up by Britto gave rise to the council asking for a discussion and disclosure of all non-budgeted accounts "which may exist but are not in the general budget." At the January 7, 2020 council meeting, councilman Rodericks requested an explanation of several accounts which do not appear in the budget. Finance Director Moore had supplied the council with several "special revenue accounts" which are not listed in the budget. "These are revenues which are grants, awards or otherwise fund-raised by committees or groups which stay earmarked for a purpose. They aren't part of the regular budget process," said Moore.

"I'm just going to speak to a few items from the list," said Rodericks. "The following eight items total approximately $1 million. The account balances they show are as of 10/31/2019. Are they active, what is their source and is there a plan to use these monies," he asked. The accounts listed that Rodericks asked about were:

•Project Dare $9,763

•Forfeiture Drug State $285,895

•Emergency Mgt. Program $90,989

•Sr. Center Donation $58,000

•Crescent Park Carousel $117,697

•State Hazmat Grant $95,618

•Sabin Pt. VW Settlement $849,033

•Library Donation Fund $144,484.

"These are listed as special revenue accounts and are specifically for those agencies or departments," said Moore. "Many were acquired through grants or were the result of fundraising events such as the Carousel holds," he said. "Is Project D.A.R.E. funding from the now defunct D.A.R.E. program? If so, what is that account for," asked Rodericks. "It may have started out from the old D.A.R.E program but is now called something else but still used for substance abuse type programs, etc. We can change the account name," added Moore.

"These are the type of accounts that had we known about them during budget talks, we could have considered that when appropriating funds for similar efforts," offered Ward 4 councilman Ricardo Mourato.

In the end the council and Moore agreed that future budgets should list a separate designation for these special revenue accounts which have not usually been listed as part of budget preparation by the council.

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