City Administrator’s Annual Blog Discussing: The City’s New Fiscal Year

 

July 1 was the start of the City’s new fiscal year. Often, with the start of the new budget year, I get questions about the City’s money, where it goes and why can’t we “just fix” certain things. In the past, I have covered how the budget works, the role of the City Council and Citizen Budget Committee, and how dedicated funds and Woodburn’s General Fund works.

Like all Oregon municipal and county governments, Woodburn practices fund accounting. The City of Woodburn has 25 funds that represent different categories to track revenues and expenses. Each fund must be accounted for completely separate from other funds. Most of the funds have a very specific operational purpose and revenues can only be used for that specific purpose.

 

The bulk of the City’s actual cash resides in the ultra-safe Oregon local government investment pool, administered by Oregon’s Treasurer. Like so many of our local businesses, the City continually manages cash flow and cash position along with budget administration. All of this information is shared with the City Council and Citizen Budget Committee. It’s also available to any member of the public.

 

For the most part, Woodburn’s General Fund is the only fund that collects revenues without specific restrictions on spending. Restricted by law, regulation or contractual obligations, every other fund that collects revenue must be spent only on items related to that specific fund, regardless of what the City’s greatest needs are. For example, the Water Fund collects income from water payments and pays expenses associated with water operations. The Water Fund can also pay for water-related capital projects. However, since these funds are restricted to water-related use, water money cannot be utilized for other City services, such as recreation services, City Hall needs or adding more police officers.

 

This concept can be confusing because it often means that cities have money to improve water lines, but cannot add more services in parks. Essentially, if the appropriate fund does not have a balance to support the expenditure then we can’t afford it. When we consider expenditures we must consider the financial stability of the specific funding source, regardless of how much is in the City’s other funds.

 

While this may seem frustrating at times, it serves as a checks and balance to ensure tax dollars are being spent appropriately, repairs get done on the City’s water system and roads can get fixed when they fall into disrepair.

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