County creates reserve fund for IT purchases

IT Director wants entirety of budget surplus moved into fund annually


LEE COUNTY – The Lee County Board of Supervisors is moving toward creating a capital reserve fund for the county’s Information Technology department.
Kevin Harter, the county’s IT director, asked the board last week during a workshop to consider establishing the fund to allow his department to roll over funds for IT support without having to spend the full budget yearly.
"When the IT budget was moved from its own fund to the general fund last year, we lost the mechanism to save money for larger expenses because we no longer have the fund for money to sit in between fiscal years," Harter said.
Harter said he wants the county to establish an IT Capital Reserve Fund for any money allocated to the budget that’s not spent during that budget year to go into the CRF to be used for projects and expenditures in another fiscal year.
“We’re not asking for any additional money at all, just money that’s leftover in our budget,” Harter said.
Supervisor Chuck Holmes made a motion to create the account at Monday’s regular meeting.  Supervisor Ron Fedler seconded the motion.
Supervisor Chairman Garry Seyb said the CRF isn’t something that would be considered for all the county departments, but said it did make sense for IT to do that.
Seyb said he has heard some feedback since last week's workshop on the potential for the county to establish a lot of reserve funds in other departments if they do it for the IT department.
“In this case with the IT department, I think it makes a lot of sense,” Seyb said. “I don’t know that's something we would want to do for every department, but I think for the IT Department it makes a lot of sense when it comes to timing of purchasing software and equipment is not on a set schedule,” Seyb said.
Harter said he’s fighting vendor schedules, equipment availability, and licensing issues where we have equipment sitting in the box and not installed and burning those expensive licenses,” Harter said.
Fedler said it doesn’t make any sense for county departments to just spend so they don’t lose appropriations from the county from year to year.
“You’re being punished for not using it all. This way it carries it over into a reserve fund so it can help you with future budgets,” he said.
Supervisor Tom Schulz said he had mixed feelings about the idea. He said if, theoretically, there was a budget for five servers, but the department didn’t, for whatever reason, buy that equipment then he could see moving that over.
“I can see taking that money and moving it over into a capital fund so that money wasn’t lost from the budget,” he said.
“But I would have a problem if we, say, went seven months without filling a position and we save that money. The way I’m looking at this is that money now goes into a capital fund instead of into savings for that fiscal year.  I don’t have a problem doing it with capital funds to capital funds, but saying anything not spent is still “mine” is a really bad way to do business.”
Holmes said the department may be able to just move the capital funds that are appropriated for equipment and not payroll.
Budget Director Cindy Renstrom said other counties have created the capital reserve funds.
“If the state auditors say it’s not doable and we shouldn’t have done it, we can always correct in the next fiscal year."
Fedler said if the county doesn’t do it, they are encouraging department heads to just spend everything and discouraging them from being conservative in spending.
“I’m going to spend everything in my budget I can because, if I don’t, you’re gonna take it away from me,” Fedler said.
Schulz said you could make that argument for every department. Seyb said that’s why he feels it doesn’t work for some, but could work for IT, specifically.
One county resident asked if this wasn’t creating the opportunity for a slush fund, understanding the cost of IT equipment, but said IT equipment can be delayed in delivery and the cost could overlap the county’s fiscal year, but other department heads, including Recorder IT Director Nancy Booten, and Auditor Denise Fraise  said other departments could utilize capital reserves as well.
Harter did say that he was looking at moving the entire remainder of his budget each year into the capital reserve fund. That would include any payroll or other savings outside of capital purchases.
Seyb said any other department who wanted to do that would have to come forward and make a case, but said IT made sense to him.
Holmes said he didn’t think payroll savings should be included. Seyb pointed out that the motion in front of supervisors was just to establish the fund. Future discussion would determine what funds would be allowable in the fund.

Lee County, Iowa, news, Board of Supervisors, reserve fund, Information Technology, budgets, surplus, savings, investments, Pen City Current


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