On September 8, 2026, the Joplin City Council held an informal session to discuss two staff items: the annual rollover of purchase-order encumbrances and proposed changes to the city's promotion policy. No agenda or minutes were available; this summary is based on the meeting transcript.
All right. We'll get started with our uh informal session for September 8th. Um appreciate everyone being here this evening, and Ms. Hoges, I think you have the uh the lead here this evening. Good evening, Mayor, Council. Hope everyone's good tonight. So we were asked some questions about uh rolled encumbrances. Thank you. Okay, thank you. Uh so just to start off encumbrances and purchase orders, they they mean the same thing. Uh purchase orders are legally binding orders for goods and services uh that don't necessarily adhere to our our fiscal year. Uh purchase orders are a financial commitment helping entities uh keep uh it helps keep uh from overspending available funding. So under our charter, uh all appropriations shall lapse at the end of a budget year uh unless they have been expended or lawfully encumbered. Um and then in our uh ordinance adopting the budget, we also have the appropriate language. So both our charter and our and our ordinance allows for rolling over purchase orders. Uh so how does it really work? Uh it when we roll a valid PO, it increases the adopted budget while at the same time recording the commitment uh for the rolled purchase order, which really results in no bottom line effect on the total amount. So the example here is the original budget for some line item is $500,000. We have a rolled PO for $100,000, so the budget uh is $600,000 at that point, but at the same time there's a commitment uh through the rolled PO of $100,000. So the bottom line is $500,000. Uh but the difficult part is that we don't know what valid POs we will have when we're adopting the budget because that's mid-October and departments are still doing purchase orders through the end of the fiscal year. So in November we bring a resolution uh letting you all know uh what those encumbrances are. Uh so what are reasons uh to roll purchase orders from one fiscal year to the next? Uh goods or services were ordered before year end, but have not yet been delivered, completed, or accepted. Uh there's a valid continuing commitment to a vendor, so the open purchase order must remain available for payment uh when performance is complete. Uh long lead times, back orders, supply chain delay delays, which we have seen, construction schedules or or other project timing issues extend the fulfill fulfillment beyond our fiscal year end. Capital projects grants, special revenue programs, multi-year contracts often span more than one budget period. Uh as I mentioned, carrying a purchase order forward preserves the related encumbrance and prevents the committed funds from appearing available for another purpose. Uh this is evident uh through our annual audit. Uh you'll see the encumbrances in the audit. It improves financial reporting by distinguishing funds already committed from funds still available for new spending. Helps demonstrate compliance with council approved appropriations, purchasing policies, grant restrictions, and local budget requirements. The rollover maintains the connection among the original authorization, contract, purchase order, receipt, invoice and payment for internal control and audit purposes. So we rolled encumbrances uh for 2025 to 2026 across all funds, uh totaling 50 million seven hundred forty-four thousand six hundred and thirty-one dollars. Um I provided that list. That is the same list that went uh in the resolution uh to city council. Uh on the provided, so I provided the updated list, and uh this list is now down to 21,932,87. Uh however, none of these will roll forward uh unless the fire truck uh has not been uh completed by that by fiscal year end. So they will all close. Um if an item isn't complete by fiscal year end from 2025, it should then be re-budgeted for 2027. When a rolled encumbrance is closed, uh the reverse process occurs. Uh so the budget is actually decreased, the encumbrance is closed, so there's no bottom line effect. Uh as a result of this process, this means uh budgets are not arbitrarily increased without a corresponding valid purchase order. So uh our fiscal year is approaching. Uh there will be a new batch of valid encumbrances that will follow the same process to be rolled into 2027. Any questions? Okay. Council members, any questions? Mr. Cowles.