The City of Ottawa’s 2019 budget will be republished and belts will need be tightened after an accounting error caused a reduction of $2.2 million.
Richard Neinstedt, Ottawa City Manager, explained to the City Commission during Monday’s study session how the amount of cash at the end of 2018 was miscalculated causing an overstatement of the $2.2 million
The commission, based on the information presented at Wednesday’s regular commission meeting, voted to approved the republished budget.
Neinstedt explained the steps taken when they discovered the problem soon after the budget was originally approved in 2018.
“When we found this error last fall, we immediately met with the department and they were requested to decrease spending, which they did so we could account for the difference,” he said. “If we had this number in there, would the budget have been different and yes it would have been. Just simply because, like I said, you have a $2.2 million overstatement of cash. It’s not lost cash, it’s just an overstatment and if we had used the audited numbers where they should have been then it would have been a different budget presented to you.”
Neinstedt explained to the commission the revised budget will bring the total budget number down from what was originally published. He said that new number does not change the property tax that was levied this year.
The department heads have been working to not only freeze expenditures, but also to look for places cuts could be made.
“There are a number of vacant position we are just not filling this year and we also took a savings on a couple of positions that we haven’t paid anything on also,” Neinstedt said.
He added a budgeted cost of living increase for city employees will not be given, but merit increases will still be available. He also said department heads will not receive pay increases this year along with other cuts. One service that could be increased is the city’s electric rates.
“All revenues and expenditures were on the table,” he said. “We took a look at the electric fund and you will need a rate increase. The last time you had a rate increase in the electric fund was in 2010, 2011. There should have been some along the way. I can guarantee you Westar and KCPL and the privately owned investors have not gone that long without a rate increase just to cover the cost of goods and services.”
Ottawa Mayor Blake Jorgensen praised the city staff for finding the error and taking steps to correct it.
“The steps the city has taken, instead of continuing with the original budget and making up the difference by drawing down savings or putting it on a credit card is to tighten our belts and live within the means of the city,” he said. “And then also you have taken steps to prevent it from happening in the future.”
In other action the commission:
— Approved the downtown tree replacement plan.
— Approved bids to mill and overlay three blocks of city streets and to chip and seal four miles of streets. Three bids were received. The commission approved a $141,047.80 bid from Vance Brothers for the chip and seal project and a bid of $37,745.42 for the mill and overlay project.
— Approved a new cereal malt beverage and beer containing not more than six percent alcohol by volume ordinance. The ordinance addressed changes to the Kansas law that went into effect April 1.