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The city’s Finance Committee has recommended that caps be placed on contingency fund accounts and that any extra monies over the cap be transferred to a reserve account for capital improvements. Yearly caps would be determined by whatever 35 percent of the current year’s operating budget equals.

The recommendations were reported to the August 17 Salmon City Council meeting by Finance Committee Chairman Jim Baker.

Other recommendations included withdrawing $24,000 from the Cemetery Contingency Fund to pay for a coat of oil to reseal cemetery roads. The council approved the recommendation and the work on cemetery roads will be part of the city’s late August street-oiling projects.

In separate recommendations, later ruled on by the council, the Finance Committee proposed putting a cap on the Cemetery Contingency Fund which, over the years, has built to $84,000. After the $24,000 is taken out for road oiling and $13,560 to cover installation of a toilet facility at the cemetery a total of $47,000 will remain. Thirty five percent of this year’s cemetery operating budget would equal $24,500 which when subtracted from $47,000 leaves $22,500. The left over $22,500 would be transferred to the General Fund where it could be expended for priority projects. It will be up to the Public Works Committee to recommend what those priority projects are.

Baker said the committee is also recommending a cap be placed on the General Fund contingency at 35 percent of its current year’s operating budget. City Finance Director Amy Fealko said in the event of an emergency that 35 percent amount would cover city operating expenses for approximately four months. Any monies over that amount will go into the Capital Improvement Reserve account she will establish and will be made available for priority improvement projects. The new methods are seen as a way to keep money working instead of being trapped in individual accounts. Each year’s operating budget will determine what 35 percent equals.

The council approved the caps and they will become effective October 1st for fiscal year 2011/2012.

Baker said results from a Finance Committee fiscal year financial review of the 2010-2011 budget showed that most city departments are within budget. The swimming pool is expected to be over budget due to the cost of propane, needed repairs and maintenance. Baker said some of those costs may be covered by Local Option Tax funding. He said the Sacajawea Center is hoping the August 19-20 Heritage Days event will boost the facility’s revenues.

According to Baker preliminary, unaudited September financial statements will be prepared for review in time for the committee’s October meeting.

As to the city’s fireworks budget, Baker said the city currently contributes $1,500 to the fireworks display. The city has been requested to increase that funding to $2,250 however the Finance Committee feels that extra money could be obtained from sources other than the city and is recommending there be no increase.

The Finance Committee reviewed a Time Value Investment proposal presented by Fealko. She said that at the next committee meeting she will report on different investment options for a portion of the $1.3 million the city currently has in the Local Government Investment Pool (LGIP). The pool was created through the State Treasurer’s office as an opportunity for local governments to combine financial resources for the purpose of increasing earning potential. Presently the LGIP rate of return is around point two five percent.

The next meeting of the Finance Committee is scheduled for September 21st at 10AM in the Salmon Valley Center meeting room.

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