Coun. Dawn Luhning is concerned that changes to an accounting software program at city hall make it difficult to judge accurately how much funding each department needs for 2022.
City hall switched to a new program this year called Enterprise Resource Planning (ERP), a software that allows organizations to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.
The municipality is still working out the bugs and plans to fully implement the program next year, according to the 2022 budget report. The taxation portion of the project will move forward then, as will other components such as e-billing, virtual city hall, job costing, fixed assets, asset management and procurement.
Those short-term problems concerned Luhning, who pointed out during the Dec. 8 budget meeting that some numbers in the report didn’t add up. For example, in the engineering department, many line-item expenses are projected to increase 100 per cent next year. However, total expenses are to decline 31.1 per cent, to $261,881 from $379,968.
This is a problem that seems to afflict every other department, based on the proposed 2022 budget report, she added. This was frustrating since she could not determine what areas needed to be increased or decreased.
Expenses in engineering’s operating budget are down because, after city administration reviewed costs in that area, they found many capital-related expenses, explained finance director Brian Acker. Therefore, those costs were allocated to the appropriate areas, which caused the reduction.
City administration attempted to remove all capital costs from the operating budget this year but still found several such expenses that they removed before producing the proposed 2022 budget, he said. The introduction of the ERP system means the previous accounting program and the current system are not matching up.
“For this year, because of that transition period, that’s the resolution we have. We don’t have the ability to distribute the old budget to the new charted accounts just because it was so significantly different … ,” Acker added.
“How do I see that employee benefits are up in engineering services or clothing or office expenses are up?” Luhning said, adding the department’s employee benefits this year were $200,000 and are expected to be $30,000 next year.
City administration did provide projections of 2021’s expenses, which is the best comparison they could develop, said Acker. Those projections are also where city hall expects those expenses to finish in the new budgeting format.
As for the employee benefits, that decline is due to a new payroll system this year.
“This is all part of the struggles with moving to the new ERP system. Things are not cut and dry; we can’t map them over,” he added. “This is one challenge we have with the budget. Going forward, we will have the 2022 budget figures.”
Coun. Heather Eby understood Luhning’s frustration but thought Acker and city administration had done the best they could under difficult circumstances while switching to new software.
“Next year, it will look different, but this year, I don’t know how else it could have been done,” Eby added. “I know they are struggling through this system.”
Acker also understood Luhning’s frustration, particularly since she didn’t have the appropriate information to make proper resolutions. Still, the projections in the 2022 budget should help somewhat, while he thought council needed to rely on administration’s expertise.
As an accountant, Coun. Kim Robinson said he has been involved with ERP and changing accounting systems and sympathized with city administration. While this situation has been difficult, he thought this would be the only time they would face this problem.
The next budget meeting is Monday, Dec. 13.
