City of Central Falls
City Council Finance Committee Meeting
Monday, December 6, 1999
City Hall Council Chambers at 3:00 p.m.
A meeting of the Central Falls City Council Finance Committee was held on the above date in the City Hall Council Chambers at 3:10 p.m.
Councilman Noury
Councilman Weber
Meeting chaired by Councilman Weber.
Resolution for transfer of funds
The meeting centered on discussion involving carry over funds. The Members asked John Kuzmiski, Finance Director several questions relative to fund balance and Capital Programs.
The Finance Director explained each of the items that needed to be carried over and placed in the Capital Programs fund. He explained the balance in the mini-van account and the Spintex Site Improvement Account. He stated that as of June 30, 1999 no money was spent on the van but since that time approximately $8,000 has been expended.
The members asked the Finance Director where the money would come from if they did not approve the carryover.
The members asked what point in time would the funds need to be paid out.
The Finance Director responded that when the items become a Capital Project there is no time limit as to when they can be completed.
Council Members asked about Capital Reserves and their status. The Finance Director explained that this information could be found on page 60 of the Audit report.
Councilman Weber stated that the one thing he didn't like is that encumbrances are not shown anywhere. Such as the Firefighters clothing allowance and potential raises.
The Finance Director explained that these couldn't come out of the operating budget it must come from the Fund Balance. He said this would show up as a reserve but cannot come out of the operating expense. He also responded that it shows up in the audit report.
Councilman Noury commented on the need to encumber funds so that a clearer picture can be made of what really is and will be expended.
John Kuzmiski explained the mechanics of standard acceptable accounting practices and said there are two basic ways to set aside funds:
Create Capital Programs
Reserving against the fund balance.
He explained the difference between Capital Projects and Major Purchases stating That Capital Projects is a separate fund account while Major Purchases is a reserve account. He said this doesn't change the operating surplus. He stated that in order to complete the audit it is necessary for the auditors to know where these items will be placed in order to complete the balance sheet portion of the audit.
Councilman Noury stated that when he talked with the Auditors they explained that funds could be set aside in a certain fashion he also spoke of enacting legislation that would restrict or reserve funds for a limited time period such as 2 years.
John Kuzmiski stated that in dealing with Capital Projects that once funded and created there is no time constraints placed on the funds.
Councilman Weber asked Mr. Kuzmiski to provide a list of projects that have been started and those that have not for the December 13, 1999 meeting.
None
None
Councilman Noury motioned to adjourn at 3:45 p.m.
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Elizabeth A. Crowley, CMC
City Clerk