Lincoln Aldermen reject 2019-20
Appropriations Ordinance with July 31st deadline
Send a link to a friend
[July 25, 2019]
This week on Tuesday, Lincoln aldermen participated in three council
The evening started at 7 p.m. with a Public Hearing to hear general
comments concerning the 2019 - 2020 Appropriations Ordinance that
must be passed and submitted to the county by the end of this month.
Following the hearing, the council was called to order for a special
voting session, with the expected outcome that the ordinance would
be passed as presented. Following that special voting meeting, the
council was then to go into its regular fourth Tuesday Committee of
the whole meeting to discuss other topics.
In years past, the first two meetings, which are typically held on
the fourth Tuesday in July, have lasted less than 15 minutes
combined. However, this year, the aldermen had many questions and
concerns about the ordinance, and after more than an hour, they
voted 5-2 to reject the ordinance as presented.
Those who voted against the ordinance were Kevin Bateman, Sam Downs,
Ron Keller, Steve Parrot and Kathryn Schmidt. Those who voted in
favor of the ordinance were Jeff Hoinacki and Kathy Horn. Tracy
Welch was absent for the evening.
The Appropriations Ordinance must be filed with the Logan County
Clerk no later than July 31st. Because the presented document failed
to pass, a new document must be prepared and approved before next
Wednesday. To meet this goal the city has scheduled two special
meetings on Monday, July 29th, and Tuesday, July 30th, both starting
at 6 p.m. If they come to the first meeting with a workable document
they are able to approve, the second meeting on Tuesday evening may
Appropriations vs. Budget
Each year the city approves two official documents, a Budget and an
Appropriations Ordinance. The budget is the working document for the
year and reflects the realistic expectations of city revenues for
the year, and how those revenues will be spent.
The Appropriations Ordinance, by design, is a version of the budget
that is bolstered to cover unforeseen revenues and/or unexpected
The late alderman Buzz Busby once offered up a simple definition.
“The budget is what we have to live by, but the appropriations
ordinance is our wish list (paraphrased).” Busby explained that the
budget was the document the city would follow, but if there would be
a windfall of cash come to the city, or if the city would be awarded
a grant, having the extra buffer in the Appropriations Ordinance
would permit the opportunity to disperse those extra funds quickly
without going through a lot of effort to re-define the
Appropriations document and do new filing.
The city can change the budget with a vote of approval from the
aldermen. Changing the Appropriations Ordinance is much more
complicated and not recommended.
Exceeding the budget in one particular area is not uncommon and it
is an easy fix for the city. Often times the budget is adjusted for
example if a large expense comes to the police or fire department
and money is needed in the budget to cover it, money may be taken
from another section of the department’s budget where it is
available and put into the line where it is needed.
Exceeding the Appropriations document is a state violation and may
come with consequences. In fiscal year 2018-19, the city did exceed
the Appropriations in the area of building maintenance, specifically
janitorial services for municipal buildings. This happened because
the city had taken on janitorial services for the new police
station, new municipal works building on Limit Street, and the
Amtrak waiting station at the Lincoln Depot. City Treasurer Chuck
Conzo at the time told the aldermen that the consequences were that
the city would have to write a letter explaining the violation and
that there would be a notation of the violation in the upcoming
audit of the city’s books.
Even though the city exceeded the Appropriations, it did not exceed
the budget in that matter because, the city had more money in other
areas within the general fund.
So, the year ended with the city coming in about $300,000 below
budget in the general fund and at the same time exceeded
appropriations in one line item.
Tuesday evening, the issue of the elevated expense lines within the
Appropriations Ordinance came to light during the public hearing
when Kevin Bateman questioned the method used to come up with the
exaggerated version of the budget. He noted that the total budget
consisting of general funds and special funds, such as sewer,
totaled about $22,000,000. However, he said that there was a 12
percent increase across the board in the Appropriations Ordinance.
His issue was that there were lines that had been increased within
the document unnecessarily. He noted that there were budget items
that for the last several years the city has not spent what was
budgeted, but at the same time the appropriations had been increased
in that same line to a number that was probably never going to be
Bateman said he understood the concept of appropriating funds, but
he felt that if the city were to increase budget figures for the
document it should do so more realistically and that if lines were
to be “padded” they should be the lines where the city could
actually do some good for its citizens such as streets and
Bateman said he planned to vote no on the current document.
Steve Parrott also spoke during the public hearing saying he had
requested documents from the city administrator in order to do some
comparisons. Parrott said he had not had sufficient time to really
examine the documents, so for now, he also planned to vote no.
Conzo then said that because this was a public hearing, the aldermen
should perhaps hold further discussion until the voting session was
Mayor Seth Goodman, then following the recommendation of Conzo,
called for the conclusion of the public hearing and the adjournment
of the special voting session.
Voting session brings up even more concerns
When the voting session was called to order, there had to be a
motion made before aldermen could continue on with discussion. Jeff
Hoinacki made that motion and for several seconds it appeared that
there would be no second. Finally Bateman said he would offer the
second “for discussion purposes.”
Conzo was then called upon to introduce and comment on the
Appropriations Ordinance. He began saying that he had provided some
comparison documents that showed how the city had come out at the
end of the last fiscal year budget. He noted that the city had ended
the year under budget in the general fund by $330,000. It had ended
the year under budget by more than $1,000,000 in the special funds.
For the same time period the appropriations had come in right at
$3,000,000 below the projections across the board.
Conzo said that the reason for coming in under budget and
appropriations in the special funds area was because work that had
been anticipated to be done in the last fiscal year had run late, so
the money had not been dispersed for contract payments.
Moving on, Conzo said he wanted to dispel the theory of “padding”
that had been discussed earlier pertaining to the appropriations. He
said that showing increases in the appropriations was not padding,
it was planning for contingencies. Conzo said that if the aldermen
would examine the documents he had provided they would see that in
almost every case, the city ended the year under budget as well as
under appropriations. He noted the exception of the over expenditure
in Buildings and Grounds.
He also noted that the budget was the city’s document to live by,
and that all the department heads had done exactly that, with none
of them trying to “squeeze out” more than they had.
Who wrote the Appropriations document?
Parrott asked Conzo who was responsible for creating the official
Conzo said that the City Administrator Beth Kavelman first had
consulted with the department heads, and he had assisted her in
putting the document together. Kavelman said that actually she had
sat at the computer and plugged in the numbers that Conzo told her
to plug in, so he had done most of the work.
Conzo also reminded the city that the Appropriations Ordinance must
be passed and filed with the county by July 31st, and if that
doesn’t happen the city will not be permitted to do business until
the problem is rectified.
More questions about the methodology
Bateman said he still couldn’t understand why the document would
show increases in allowable spending in line items where
historically that line comes in under budget.
Parrott asked about the revenue expectations for the coming year and
why the expenditure budget for the year was exceeding expected
revenues. Conzo said that was because of the loan program that would
be implemented later as part of the mandated sewer upgrades.
[to top of second column]
Keller said that he would have to agree with Bateman that while he too
understood the concept of appropriations, he feels that the document presented
is “out of kilter.” He suggested that the city hold a special workshop session
to get the problems fixed before the deadline.
Bateman brought up another line in the appropriations. He noted that the City
Administrator line in the budget had been decreased for the new fiscal year by
20 percent, but that the appropriations document had been increased by 9.78
percent, an overall difference of right at 30 percent. He didn’t understand why.
Kavelman said that she had added $14,000 to her line to cover hiring a part time
employee for the City Administrator. Parrott asked why that the new employee was
not showing up in the budget. Kavelman said she has needed help for a long time.
She had talked to Conzo about it and he wasn’t sure the city would agree, so
they had plugged it into the appropriations to approach later with the council.
Parrott said if Kavelman needed help she could not have it until the figure was
placed in the budget, so what good did it do to put it in appropriations? Conzo
said that before the C.A. could have a new hire, the council would be approached
to discuss the need and seek approval. If approved, then the city would have to
make room in the budget for the expense. Those items could be done easily.
Adding it to the appropriations now was covering the possibility of the added
expense at a later date.
Bateman also noted a 330 percent increase in supplies for the C.A. in
appropriations. Kavelman said that they had added money in appropriations to
cover the cost of a new printer for her office. It isn’t in the budget, but if
money should be available for the purchase, then it is in appropriations.
Bateman said that was a good explanation that he would like to have had ahead of
the question, not after. Parrott asked why a printer was listed in supplies
instead of as equipment. Kavelman said her budget did not have an equipment line
and that it should have been a new line.
Parrott said another concern for him would be what the city would have knowledge
of next year in March when preparing a new budget. He said that by then the
council wouldn’t necessarily know that the supply expenditure was actually a
printer. Parrott also noted that putting equipment in the supplies line fogged
up the transparency of the city. Bateman also talked about that because he said
the printer was not an annual expense, so, maybe yes, this year the supply
budget needs to go up substantially, but then next year it should go back down.
Conzo said that the city has not had an equipment line for the C.A. in the past
because it had not been needed.
Hoinacki: Can we move on and do better next year?
Jeff Hoinacki noted that the city was putting a lot of pressure on the city
administrator or treasurer to reconfigure the entire document in five working
days. He said that he understood the concerns of the aldermen, but felt that it
would be best to approve what is in front of the aldermen now, and work on doing
it differently next year.
Conzo said he agreed that there was going to be a big push to make significant
changes in less than a week. He reiterated that the city is facing a legal
deadline of July 31st.
Conzo added that if the aldermen saw some singular significant changes that
needed to be made, they could do that, but an entire re-write would be
Bateman said his problem there is that he has three different documents in front
of him, and at the moment he’s not sure which one to change. He said five days
or not, he didn’t care, he was still not going to vote his approval on a
document he did not support.
Kathryn Schmidt brought up committee structure, and wondered if the city does go
forward with a committee structure would that take some of the work load off of
the city administrator. If so, then perhaps there would be no need for an extra
employee. Parrott said that with a committee structure there was a possibility
that there would be no need for a city administrator, not to mention a helper.
Keller spoke up saying that he felt that committee structure was a discussion
for another time, and that there was a motion on the floor concerning
appropriations. He called for the vote.
The vote was taken and the motion to approve the 2019/2020 Appropriations
After the vote failed, Conzo said that now the aldermen needed to decide their
plan of action. They had originally thought that a meeting to be held on Tuesday
July 30th would result in a new document and approval of said document. Then the
document could be filed with the county on the following day. Conzo asked them
what they would do if the city experienced a large storm and power failure or
other emergencies and couldn’t meet on Tuesday night.
Keller said that the next step was going to be to go through the document
line-by-line and make recommendations for changes. That could be done ahead of
time. Kavelman said if she and Conzo were going to have to review the
recommendations and make the changes, they had to have a deadline earlier than
Parrott asked what the legal consequences would be if there were a catastrophic
event that prevented the council from passing an ordinance. Conzo deferred to
city attorney John Hoblit who said he would have to research that, he didn’t
have an answer. Conzo said maybe there would be an emergency contingency in the
law, but he really wasn’t sure. Later in the night, Hoblit would share that he
had been doing research as quickly as possible during the meeting and was
sending notes on the legal issues of appropriations to the aldermen via email.
Parrott said he had requested that the appropriations document be sent to him in
an Excel spreadsheet format but that the C.A. had sent him a pdf instead. He
wondered if there was a reason why he could not have the spreadsheet he
requested. He said then he could quickly and easily adjust numbers and see the
outcome, whereas with a PDF he had to do the math longhand.
Kavelman did not immediately answer that question, but instead asked if she and
Conzo could do a “quick fix” such as reducing every line for example by four to
Parrott asked if the aldermen were not allowed to have a worksheet, was it not
permitted that the C.A. send out a workable document for editing. Kavelman said
that she had serious concerns about sending out an excel spreadsheet, but that
she would do it if the aldermen told her to.
The final conclusion to that topic was that Kavelman was to send out an Excel
spreadsheet of the appropriations document to all eight aldermen. Each alderman
will then review the document and make changes to it as they see fit.
Then the question came up, how was the city administrator and treasurer to react
to seven or eight different opinions? Whose opinion would they choose, how, and
most of all why?
Mayor Goodman noted that what was happening now was going to be a huge
undertaking. He said that he too wondered what the administrator and treasurer
was to do with seven different opinions. Conzo again reminded the aldermen of
the time constraints saying that he and Kavelman were looking at a great deal of
work in a short amount of time if this were the route the aldermen were to take.
Keller said that the issue is with the percentage increases, and maybe Kavelman
and Conzo could go through the document with the aldermen and explain the how
and why of each increase.
Plan of action
To alleviate the pressure on Kavelman and Conzo the aldermen decided that each
one will go through the appropriation document in Excel format and make
recommended changes. Those spreadsheets will then be emailed to Keller and Sam
Downs. Keller and Downs will meet and review the recommendations and put
together a singular recommendation to go to Kavelman and Conzo. Those two will
then prepare a new official draft for review by the full council.
Goodman said that if there were to be these additional steps, there had to be
deadlines established. He said that he felt that the individual aldermen should
have their recommendations to Keller and Downs by 9 a.m. Thursday morning. Those
two aldermen will review the recommendations and then meet with Kavelman and
Conzo on Friday morning to put together a new draft for council approval.
The council would then meet at 6 p.m. on Monday, July 29th with the intention of
discussing the new ordinance and voting to approve it. If the council is unable
to approve what is presented, further discussion may take place and new
adjustments may be made to the draft and it will be presented again on Tuesday,
July 30th in a second special council meeting, again to commence at 6 p.m.
If the council is not able to approve the Appropriations Ordinance on Tuesday
night, it is unknown what the next step will be.