New Budget Year

An anonymous commenter on my previous post asked about the current budget situation now that the new fiscal year has started. I would like to offer my understanding of the situation for what it is worth. Here is the question asked:

I don't understand. The proposed 2007 budget was not approved, so now it is going to be amended? This means that the crooked figures from the proposed 2006 amendment inflated even more will be approved as an amendment??? -- Anonymous

No. I have read the local government code, studied all versions of the 05-06 budget talked to the Pecos Finance Director. If a city does not adopt a budget before the start of the new fiscal year (October 1) then the city uses the most recent budget adopted by city council. So we have a budget for 06-07, but what is it? As regular readers know, there are several versions:

• Proposed 05-06 budget from 9/29/05. This was prepared as a starting point for discussions with council.
  
• Approved budget by voice vote with verbal changes to the proposed budget on October 19, 2005. The only documentation of this budget is to start with the 9/29/05 proposed budget printout and then listen to 3-4 hours of tape from October 18 and 19, 2005 to try and determine the consensus of council on budgetary changes. There are no written changes. There are no motions and votes on changes to line items. There is much discussion about guns, insurance and youth. On the tape, you can hear discussion of the gas company revenue of $126,000 which came in early October 2005 and was being spent already--money in the bank. This is the legal budget.
  
• Printed paper budget released in August 2006 with whiteout changes, math errors and unapproved changes to ten line items. As this version does not match city council records, it cannot be considered legal. The gas company revenue is listed as $45,000 even though we received and spent $126,000. Dan Painter consulted on "management" in August right before the official budget was published and entered in the computer and right before the 06-07 budget was proposed. Did he participate in this? We may never know the truth.
  
• Computer entry of the this budget with entry mistakes. This is the budget listed as "adopted" budget in the computer. It is the same as the August 2006 paper budget but the gas company revenue is mistakenly entered as $0 instead of the actual $126,000 or the incorrect $45,000 in the paper budget. It also reflects the ten unauthorized line changes.
  
• Proposed amended budget for 2005-2006. This is available on paper in the proposed budget for 06-07. The column labeled "CURRENT BUDGET 2005-2006" is actually the proposed amended 05-06 budget. It is also available in computer form because it was already entered into the official budget computer as the amended budget for 05-06 as if it had been approved. City expenditure reports were generated comparing spending to this amended budget that was never approved. This cannot be legal. Only council can change the budget, and only if the pass an ordinance.

OK, is it all clear now? Seriously, I have been telling council about this mess for weeks. You would expect that they would demand a full report and accountability from the administrator. You would think that the mayor/budget officer would want to get to the bottom of this and find the truth. You would be wrong. They have done nothing to address these discoveries. I visited with Carl Robinson a couple of weeks ago. He looked at my research and commented that the city could not afford to hire an auditor to do what I have done for free. Go figure.

Here is my answer about which budget is the official 2005-2006 budget and is therefore the new 2006-2007 budget: It is the 09/29/05 paper proposed budget with verbal changes made by council and approved by vote on October 19, 2005. Someone official needs to listen to these tapes and generate a budget that reflects this vote. It does not exist on paper at city hall. I did a spreadsheet copy for my own use. As it was not intended as an official document, I cannot vouch for complete accuracy. For instance, I had to retype every line item code number and description from scratch. I have high confidence that the numbers are correct but they would need to be verified. I am happy to provide this as a starting point for someone official to use. Every version in the city's computer is wrong.

So we have a budget somewhere, we just don't have it on paper or in the computer. We did not have it during all of 05-06. We don't have it now. According to the Pecos finance director, a city that does not pass a budget in time continues with the old budget. Technically, council does not adopt a new budget now that the year has started, they amend the current budget. The proposed new budget for 06-07 will need to be discussed, debated, modified and then approved as the official 2006-2007 budget by amending the current budget. Whew!

OK, and the proposed amendment to the 2005-2006 budget that was proposed to bring last year's budget into agreement with the actual expenditures beyond the budget (we overspent all versions of the budget)? That idea must be dead. You cannot amend a budget for a year that is over. Good luck to the auditor to figure that all out. We have 120 days to complete an independent audit? Any bets on that date?

It is all such a mess. I am afraid that it is not possible to get council to deal with it. Frankly, it seems that the most complicated thing they can deal with effectively is rental rates for folding metal chairs, and that takes two council meetings. The budget officer and the administrator have failed to deal with the budget effectively, clearly, competently or legally. It is not reasonable to expect council members who are basically elected volunteers to figure this out on their own. They pay an administrator to administrate. The state appoints the mayor as the "Budget Officer" by state law.

The most that we could hope for is for the council to call a special meeting to try to get to the bottom of this 05-06 budget mess. If they did, there should be presentations from the mayor and administrator. I would be happy to present my research, but only if invited and only if they pried that dang gavel from the mayor's angry hand. Most likely, they will forget 05-06, try to get the 06-07 budget done and hope that the auditor doesn't delve into this mess.

OK, any questions?