Kimball staffing concerns and fiscal report

The Kimball City Council received a report on the fiscal year 2014-15 from Terry Galloway of Almquist, Maltzahn, Galloway and Luth, the City’s certified public accounting firm from Grand Island.

Major capital events in the city exceeded $10,000 but was reported with good detail, according to Galloway, and debt grew by more than $559,000 including the $750,000 bond for needed repairs and upgrades for the south substation.

“It is quite an achievement in today’s world, having good financial reporting for your taxpayers and citizens being transparent to everybody out there, so very good overall financial reporting,” Galloway said. “That is probably the most important thing in the whole audit report.”

Galloway further reported that while the budgeted expenditures for the year reached $2.5 million, the City spent just $1.3 million.

“The City of Kimball...is certainly good at holding down the spending,” Galloway said. “We underspent the budget in the general fund by about $1.1 million.”

Of those departments that underspent, Galloway highlighted the street department, which used just $382,000 of the $2.2 million budget as well and the net increase of $44,000 that was seen in the golf fund with the transfer of $80,000 from Kimball County.

Property taxes received in Kimball have accumulated and Galloway suggested that the council begin considering how best to use those funds.

“We have been receiving some property taxes into the bond fund,” Galloway said. “We have a pretty good amount in there, so what I would recommend is to do a little thought process as to do we want to pay down some debt, what that number is supposed to be used for in the future, what needs do we actually have?”

Galloway provided a look at benchmarking for the current year including sales and property tax as well as reports from each department.

“The first one I want to talk about is the sales tax. You get about $271 on a per capita basis, so you have some pretty good retail trade. Normally in a city your size we are only getting about $225 in the way of sales tax per person,” Galloway said.

He further reported that property owners were paying a bit less in property tax than in the previous two years as well.

While the city currently has approximately $500,000 in general fund cash reserves, according to Galloway, in a perfect world the cash reserves would be closer to $1 million.

“We need to continue to increase those cash reserves,” he said. “Under the utility side of things we are sitting on about $3.4 million right now. That certainly has gone up the last couple of years, so those are all good numbers.”

Galloway added that money needed to be set aside for the landfill as well as for replacement of capital assets, though the reserves will take some pressure off going forward.

While the overall report was positive, several funds have negative bottom lines, including the water department and a negative operating income of nearly $77,000 at the landfill.

“We need to look to see what caused that and how to fix those negative numbers with possibly a transfer from another utility fund to that one,” Galloway said.

Galloway reported having a good amount of cash reserves as well as the success of the electric department’s operating income.

“A couple of things we will talk about when we get into the benchmarking of course will be the water and sewer funds. You will see both of those being negative, we want those to be somewhere around the 15 percent return on our gross margins. As we go forward we will need to take a look at those and see what we have for rates and if we can reduce our costs then that is the way we will go first and if not we will probably need to look at rates as we go forward,” Galloway said. “The last two or three years, what you have done and where you are at today has been a huge plus for you. I think Kimball is going to be pretty good shape with some opportunities, but certainly you are going to have some limitations, as everybody will.”

Former Kimball City Council member Ann Warner asked where money collected for the rail spur was listed and how much that amount was.

Although the amount was not confirmed, the levy was four percent, and the money was captured in the debt service fund, according to Galloway.

“I don’t have the specific amount, it is going to be included in that bond fund column that I talked about,” he said. “We have a lot of money in there, so we need to see how much of that relates to that four tenths levy and how much relates to other levies. So I think that is something we need to break out for you.”

Galloway then asked about progress on the rail spur project.

“At this point it is not moving forward in its original form,” City Administrator Daniel Ortiz answered. “So we have to have a decision in terms of the bond operations and in doing that, it is not going to move forward in its current form. We have to reauthorize the bond authority for some other project allowable within the LB840 laws.”

Currently Ortiz is researching the process required to do so, which may necessitate another vote of the people.

Council member Christy Warner broached staffing requirements following a long-time hiring freeze as well as a stay for pay raises.

“As part of the compensation committee we agreed to have a hiring freeze so there are positions that have been unfilled and I know that they have an economic development position that has been unfilled,” Warner said. “I just wanted to have a discussion on how that is working out for the City. Is there any possibilities of getting somebody in who can do some economic development but also be multi-tasked and do different items?”

One vacancy exists in the linemen crew, two in the power plant, two in the police department and one in the water department as well as the economic development director.

“Our crews are doing the best they can, but my fear is that going into summer months when the work load picks up we are going to push them to the brink in some areas,” Ortiz said.

Though the departments have been cross training, it is not a long-term solution, according to Ortiz.

“On the economic development side... we have advertised twice but we haven’t had any viable applicants that have the skill sets they would need to be able to fit into that role without a difficult learning curve,” Ortiz said.

Council members expressed thanks to the City of Kimball employees that work additional hours and in areas that are not their own and considered both temporary help as well as part-time help for the summer months.

“The line crew, a power plant operator, the street department, from what I have seen they all work together as a team. I am thoroughly impressed,” Mayor Keith Prunty said. “That is one of the reason’s our audit looks so good too.”

Seasonal help is occasionally hired to work in the landfill, cemetery, golf course and street departments during the busy time.

“You are better off with long-term, part-time help than you are would be with interim, seasonal help just because people end up being more conscious of their work ethic,” Ortiz said.

Warner questioned whether the hiring moratorium was still necessary for all of the departments and sought a solution to the absent project manager needed for economic development.

“We have saved quite a bit of money not having anyone (for economic development), but at the same time those projects go undone,” Warner said.

Ultimately council decided to hold a joint meeting with the LB840 board at a date to be determined to consider a shared position to address economic development.