A - B = C -- OR DOES IT?

Shell Game Budgeting Lives On

Developing a budget is simple, right? Add up the revenue. Project the expenses. Subtract B from A and what’s left over is C -- hopefully profit. So why does simplicity turn into abject confusion every year when IRB prepares the budget for the next fiscal year?

IRB has a number of different revenue streams each with its own set of expenses. Garbage truck maintenance gets charged against the Solid Waste Fund revenues, paper clips and office supplies come out the General Fund pool of monies, etc.

What would happen if ALL of the General Fund expenses were suddenly moved into the Sewer Fund? The General Fund would have a pot full of money at the end of the year; the Sewer Fund would be upside down. That's okay though because sewer fees can simply be raised to cover the increased expenses, right? Sure. Enterprise funds are supposed to be totally supported by the fees paid by residents for the service. So, no matter what the increase or what items are included in the expenses, it gets passed on to the citizens in what is perceived by many as nothing more than a “hidden” tax.

It’s total exaggeration to insinuate that ALL General Fund expenses were moved to our enterprise funds. But, beginning under former City Manager Steve Cottrell’s short reign, the allocations for some line items were increased noticeably—well above prior years’ levels. For instance, a greater percentage of the City Manager’s and Finance Director’s salaries are now being charged to the Sewer/Solid Waste Fund. Does this mean that if IRB sells the sewer system, we reduce the City Manager and Finance Director’s salaries by the amount? Not likely. Is CFO Marty Schless spending more of his day dealing with sewer and garbage issues than he did say three years ago? Also not likely, yet a greater portion of his salary now hits the Sewer Fund books.

Keep in mind, too, that Acting City Manager Danny Taylor, while doing two jobs, is being paid well below the amount set aside in the budget for the City Manager position. (The budgeted amount is based on Cottrell’s much higher compensation plan.) So, why wasn’t last year’s City Manager line item reduced to reflect this savings once the commission decided not to fill the position for at least a year? Instead, the money “saved” by Taylor doing double-duty went to pay for who-knows-what.

How many other general expense items that were moved over to the sewer and solid waste side contributed to the 60% increase in our sewer and garbage rates? How much of the nearly $1 million in loans from the General Fund to the Sewer/Solid Waste Funds were not loans at all but simply payback for overinflation of Sewer Fund expenses over the years?

The shifting of expenses between revenue pools creates a budget without enough transparency for citizens to see the black magic being performed until the rabbit jumps out of the sewer and begins grabbing wallets. Once again this year, if a budget goal was confusing the residents, IRB move than achieved it.

When is someone—anyone—on the commission going to go to bat for the financially challenged citizens of IRB? Probably not until March.

Nancy Obarski
Beach Trail/IRB