Finance Committee Report – Financial Transparency and Modernization

[Norma Owen]

Finance Committee Report – Financial Transparency and Modernization
We received the report from the Texas State University Institute for Government Innovation. Their team reviewed how we manage and share our financial information and gave us a plan to make it clearer, easier to follow, and more transparent for the public. One of their main recommendations is to move to Incode 10, which will help modernize our systems and improve how we track and report spending. They also updated the Chart of Accounts, which is basically the framework that organizes how the city records money coming in and going out. These updates will make it easier to see where funds go and how projects are paid for.

Right now, the Finance Subcommittee is setting a meeting to review these materials and decide on a realistic timeline for making the transition. We want to move forward carefully—keeping transparency and accuracy our top priorities while making sure the staff has the training and time needed to adjust.

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Typical Timelines:
Other cities about our size that have done this kind of update usually take six months to a year to complete the switch. It often starts with the general fund, then expands to utilities and capital projects. Taking it step by step helps keep things running smoothly and ensures reports stay accurate throughout the process.

 

[Paul Roberts]

Thank you for the update, Councilmember Owen. The improvements to the Chart of Accounts and reporting transparency are encouraging. When the subcommittee meets, could you share the draft implementation timeline and any planned checkpoints for Council review?

 

[Norma Owen]

Yes, I will. The report will be uploaded to the website in the near future and when it is available I'll place a link here. The timeline, checkpoints and future reports from the committee will be loaded here as well. Thank you for following Councilmember Roberts.

 

[Norma Owen]

Finance Subcommittee Update - February 20, 2026

Long-Range Planning, Budget Modernization & Post-Mortem Framework

As part of the City’s financial modernization efforts following the 2025 Financial Transparency and Budget Modernization Report , five years of historical data have been delivered for integration into Mbudget. Current fiscal year data will be uploaded by summer in preparation for building the FY27 budget within the new platform. This transition supports structured forecasting, improved monitoring, and enhanced transparency.

Capital Planning Structure (CIP)

The subcommittee has asked that long-range financial planning is organized into three distinct categories:

1. Planned Recapitalization (by organizational unit) – lifecycle replacement of equipment and facilities.
2. Unplanned Repairs (fund-level contingency) – proposal to establish a $200,000 annual contingency for unplanned repairs, with expenditures beyond that threshold requiring a formal budget amendment.
3. Capital Expansion (CIP) – future infrastructure expansion and capacity growth, modeled separately from maintenance.

This separation improves clarity between maintenance obligations and growth investments in our infrastructure and the capital needed.

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Annual Budget Post-Mortem (After Audit)

The subcommittee recommends establishing an annual Budget Post-Mortem review, scheduled for late March or early April following completion of the audit and prior to formal budget build activities (consistent with the FY27 preparation calendar)

Scope:

Review both General Fund and Utility Fund.

Revenue Variance Analysis:

Evaluate budget vs. actual for:

• Property tax
• Sales tax
• Fees
• Interest
• Grants
• Utility revenues

Identify the top two to three revenue drivers of variance and assess whether trends are structural, temporary, or forecast-related.

Expenditure Variance Analysis:

Organize by:

• Personnel & Benefits
• Services
• Assets
• Supplies
• Operations & Maintenance

Identify the top two to three drivers explaining the majority of variance.

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Policy Adjustments Based on Findings

The post-mortem would conclude with recommended policy adjustments, which may include:

• Refinement of revenue forecasting assumptions
• Adjustment to contingency levels (including the $200,000 repair threshold)
• Modification of capital funding timelines
• Recalibration of reserve targets based on volatility patterns
• Adjustments to staffing assumptions if vacancy patterns persist
• Updates to debt strategy or rate modeling in the Utility Fund

This ensures that variance analysis informs forward-looking decisions rather than serving as a retrospective report only.

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Reserve Policy Review

The subcommittee also recommends revisiting the City’s reserve policy once chart of accounts clarification is complete and funds set aside for specific assets or restricted purposes are clearly segregated. Reserve policy adjustments should be based on true unassigned operating balances and demonstrated revenue and expenditure volatility patterns.