When he opened an email Thursday morning from Edmond city manager Scot Rigby, Ward 2 Councilman Barry Moore went “slack-jawed” as he learned an accounting error means council members have $9.5 million less to appropriate for one-time projects than staff had reported less than two weeks prior.
“I couldn’t believe it,” Moore said.
On May 13, city staff members presented numbers to the Edmond City Council that showed $10.36 million available as one-time discretionary funds in the municipal budget proposed for final approval June 10. However, as Rigby outlined, a coding error discovered days later means just more than $800,000 is actually available.
While the $9.5 million decrease makes up only about 2 percent of the city’s total projected operating budget for Fiscal Year 2024-2025, it amounts to about 92 percent of the discretionary dollars the City Council had been told would be available for one-time projects.
“We did find an error and we’ve made a correction of that error,” Rigby told NonDoc Friday. “That will reduce significantly that one-time discretionary amount of dollars that council considered as an option.”
Kathy Panas, the city’s finance director, said the coding error related to the reimbursement of about $10.8 million in Federal Emergency Management Agency funds after the October 2020 ice storm.
“We got reimbursed like late May last year, so we had to put it in the budget then,” Panas said. “We put it in our budget book, but it was a hard-coded number because we received it so late (in the budget season.) We use the same workbook every year and then we update it, and so that hard-coded number didn’t get removed until we were looking through everything and I found it.”
While Rigby said city staff members are still working to calculate exactly how much one-time discretionary funding is available, Ward 1 Councilman Tom Robins said his understanding is that just more than $800,000 remains for consideration.
Rigby said the situation is not ideal.
“We were hopeful we were going to have some dollars to do one-time discretionary projects, so yes, we’re disappointed,” Rigby said. “On the other side, as much as we’re disappointed, we’re happy that our process of self-scrubbing and self-auditing caught the error now versus at some future point.”
Uncommon Ground, Pelican Bay on Tuesday agenda
Jared Campbell, the city’s budget senior manager, presented the FY 2024-2025 fiscal overview at the budget workshop May 13. Citing the erroneous $10.3 million figure specifically, he said council members could use the discretionary funds for any “council priorities or citizen priorities.”
“We have this additional $10.3 million that if you so wish by any means we can incorporate into the budget and figure something out with that,” Campbell said.
At the time, Campbell floated using that money for renovations at the leaking Pelican Bay Aquatic Center. He also noted that those funds could be used to supplement Edmond’s street maintenance fund or fulfill a portion of the $220,000 difference between the amount local nonprofits and social agencies requested from the Community Agency Review Commission and the amount CARC recommended for the council to provide.
Appropriations available to CARC are based on a portion of Edmond’s prior-year general sales tax revenue, not to exceed 3 percent. CARC recommended the council appropriate $1.25 million — the amount equal to 3 percent of its FY 2023-24 sales tax revenue — but that amount is still about $220,000 lower than what agencies requested from CARC during this year’s application period: $1.47 million.
But with the coding error caught and the amount available for disbursement greatly reduced, Rigby said the new numbers will be presented to the Edmond City Council at its FY 2024-2025 budget hearing workshop set for 2 p.m. today. The council is set to hold a full meeting at 5:30 p.m.
While the one-time discretionary funds can no longer be considered for covering renovations at Pelican Bay, Rigby said other funds have been identified for those repairs at the city-owned aquatic center.
The Edmond City Council recommended an estimated $6.26 million in renovations at the May 13 council meeting. That number is expected to near $7 million after design costs. Council members are set to consider a $539,000 agreement with GH2 Architects for design services at this evening’s meeting.
“We’re going to continue to move forward on Pelican Bay,” Rigby said. “We’ve identified funding for that.”
According to tonight’s agenda, the Edmond City Council also will consider three of four agreements encompassing the Uncommon Ground Sculpture Park project.
While the fate of the Uncommon Ground Sculpture Park project will affect the allocation of funds for the city’s FY 2024-2025 budget, Rigby said the decrease in one-time discretionary funds will not affect ongoing obligations.
“I want to be clear: It doesn’t have an impact on our operating budget that’s been discussed. Police, fire, parks — this has nothing to do with that,” Rigby said.
Rigby said he notified council members of the error Thursday, although Panas said she discovered it over the preceding weekend.
“We learned about it late Tuesday night. We discussed it Wednesday as a staff, and then Thursday morning, I sent an email out to council,” Rigby said.
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Miffed council members ‘trying to identify wants versus needs’
With city leaders hoping to keep recurring expenses “flat” for Edmond’s FY 2024-2025 budget, council members had considered it a silver lining to have significant funding for one-time projects or initiatives.
In a statement Friday, Ward 4 Councilwoman Stacie Peterson said she was “disappointed” that the $10.3 million figure had not been confirmed before its presentation May 13.
“Saying that, that’s why it takes so much time and so many steps to balance a budget for a growing city the size of ours,” Peterson said. “It’s a long and tedious process, and it should be. The important thing is that it was rectified prior to adopting the budget.”
Echoing Peterson’s point, Robins said council members rely on accurate numbers from city staff to make the best decisions for Edmond citizens.
“Now that I know the new numbers, I’m just going through the budget book with a fine-tooth comb and pen and trying to identify wants versus needs,” Robins said Saturday.
Robins said he remains hopeful the roughly $800,000 of one-time discretionary funds can be combined with the $100,000 City Council Contingency Fund and some medical marijuana sales tax revenue to supplement a portion of the remaining CARC requests, among other projects.
“Last year, we fully funded all the [Community Agency Review Commission] requests. This year, I’d be more surgical,” Robins said.
Each year, the CARC reviews applications from community nonprofits and other agencies, ultimately interviewing finalists before making a recommendation to the Edmond City Council for funding amounts, which are not to exceed the prescribed 3 percent maximum.
Asked if he has any priority for how remaing one-time funds should be used, Moore — the Ward 2 councilman — floated the idea of saving it for “a rainy day” and employed a metaphor to describe the stormy situation.
“As the old saying goes, when you pray for rain, you’ve got to deal with the mud,” Moore quipped. “It rained there for a while. Then, about 10 days later, it turned to mud.”
Like Rigby and Peterson, Ward 3 Councilwoman Christin Mugg also said she was disappointed to learn of the error.
“I’m disappointed we won’t have as much discretionary funds to allocate and am looking forward to our budget workshop to get more information and have additional discussion regarding the city budget,” she said.
Mayor Darrell Davis did not respond to a text message seeking comment prior to the publication of this story.
