CC PACKET 05261998 - Laserfiche WebLink

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Honorable Mayor and Members of the City Council City of St. Anthony, Minnesota Equipment Charges - Utility Fund For the past several years, major equipment acquisitions have been funded from the. Capital Equipment, Fund. The primary source of revenues for this fund has been transfers from the General Fund and police contract revenues. As is the practice among other cities, equipment is used interchangably by all city departments. For example, vehicles used by the public works department are also used by the utility department for its operations. Previously, a portion of the original cost of equipment acquired was allocated to the Utility Fund as a means of achieving cost sharing among all city departments. As stated earlier, this has not been the practice for the past several years. City staff should investigate the possibility of establishing a policy of charging the Utility Fund an equipment usage fee. Estimates of equipment usage can be prepared as a basis for determining the amount to charge the Utility Fund or other funds. In addition, only a minor amount of costs associated with operating and maintaining the equipment was charged to the Utility Fund. Such a policy would benefit the City in several ways; 1) Properly allocate equipment costs (both acquisition and operating costs) among City operations, 2) Provide a means of internally accumulating financial resources over a period of years for the replacement of equipment, as opposed to funding acquisitions on an as needed basis, and . 3) Assist with determining equipment needs of the City to be used in conjunction with the capital acquisition program of the City. Consideration should be given towards developing a method of allocating equipment costs among the various City operations. Liquor Inventory System Many problems were experienced by liquor personnel related to the liquor inventory system implemented during the year. Certain of these problems were attributed to human error and others to system failures. This combination of errors did not allow for accurate tracking of inventory and control procedures. Monthly inventory valua- tion reports ranged with large discrepancies noted. Considerable time was expended, with significant liquor management involvement, in an effort to resovle these differ- ences and problems. It is my .understanding certain equipment was replaced in 1998 . by the inventory vendor which has reduced the number -of problems occurring. To mini- mize the impact of human errors on reports being generated by the inventory system, all liquor personnel should be instructed on proper inventory procedures. It should also be stressed to personnel the importance of accuracy and timeliness of recording inventory information into the system. Responsibilities for preparing month end inventory valuation reports should be assigned ,to an individual by the liquor manager. These reports should be reviewed for accuracy and reasonableness before being submitted to the finance department for preparation of monthly profitability statements. If variances exist, these . can be addressed by liquor personnel timely as opposed to later when inventory information has been changed by current activity. Perhaps one individual should be made responsible for inputting inventory information into the system, rather than several individuals. These suggestions are offered with the idea of minimizing the number of errors occurring.