Agenda Packets - 2005/01/24 - Laserfiche WebLink

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Item No. 9L Meeting Date: January 24, 2005 Type of Business: Council Business Administrator Review: _____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Resolution 6445 Amending the 2005 General Fund and Economic Development Authority Fund Budgets The City has followed the practice of allocating certain percentages of payroll costs of the City Administrator (10%), Finance Director (10%), and Community Development Director (15%) to the budget of the Economic Development Authority (EDA). These percentages are loaded into the payroll system and the costs are automatically allocated to the EDA. Last fall, Ehlers & Associates Inc., the City’s financial advisor for tax increment financing (TIF), advised us that this procedure probably would not stand up in the event of a TIF audit by the Office of the State Auditor. The State Auditor expects to see timesheets with actual hours recorded for specific meetings attended or work on specific projects. We feel the percentages used are reasonable and reflect the total effort devoted to TIF matters. However, it is problematic to record all that time on the timesheet. In my own case, I spend substantial time supervising accounts payable, payroll, insurance, investments, budget and financial reporting. TIF matters benefit from all of these efforts. But to put it on my time sheet would mean record 10% of many small slices of time spent on a succession of activities each day. To alleviate this problem and head off a possible problem in a future TIF audit, I would like to reduce the percentages of staff time we allocate to the EDA. This would make it easier to justify the costs with time spent in larger blocks of time in meetings or working on larger projects. We would still need to record time spent on TIF, but the amounts would be more attainable. Doing this will shift personnel costs from the EDA to the General Fund in the 2005 budget. To neutralize the effect on the budget, I propose to shift another cost from the General Fund to the EDA. This would be the Housing Resource Center membership fee of $10,700 that is currently in the Community Development Budget in the General Fund. Ehlers has agreed that the Housing Resource Center membership fee is an allowable TIF expense.