City council members and mayors have the important responsibility of managing public funds and ensuring that taxpayer dollars are used wisely. This responsibility requires making difficult decisions about how to allocate limited resources to provide essential services, maintain infrastructure, and fund community improvements. Elected officials must balance the needs and expectations of residents while maintaining tax rates and user fees at reasonable levels. Effective planning and prioritization are critical to achieving these goals.
Planning
The mayor and council play a vital role in safeguarding public resources and ensuring they are used effectively. Sound financial management begins with clear plans and well-defined budgeting and purchasing policies. While the size of a community may influence the complexity and formality of these plans, every city should maintain written plans that are reviewed regularly to ensure they remain current, reflect community priorities, and provide measurable progress toward established goals.
In many communities, capital improvement planning and major equipment purchases are considered during the annual budget process. This is also often when councils establish goals for the coming year. While annual planning is important, today’s economic uncertainties and increasing state and federal requirements make long-term planning essential.
Most capital projects are significant investments that must be completed over several years. Councils should look beyond the current budget year and identify future projects, anticipated timelines, funding sources such as grants, loans, or reserves, and the potential impact on taxpayers and utility customers. Planning ahead helps avoid sudden increases in taxes or user fees and allows projects to be completed in a financially responsible manner. Multi-year planning provides a framework for managing community growth, prioritizing needs, and allocating resources efficiently.
Monthly Financial Reports
One of the most effective ways for elected officials to monitor the city’s financial condition is through regular financial reporting. The city clerk or finance officer should provide monthly reports to the council that summarize the city’s financial activity and overall fiscal health.
A key report is the Treasurer’s Report, which outlines cash balances and investments by fund, such as the General Fund, Road Use Tax Fund, Water Fund, and Sewer Fund. Another essential report is the Budget Report, which summarizes revenues and expenditures for the month and compares year-to-date activity against the adopted budget.
In addition, councils should periodically review reports related to Road Use Tax expenditures, investments, outstanding debt obligations, and year-end budget compliance. These reports are often required by state law and provide valuable insight into the city’s financial position and long-term sustainability.
Status Reports
Regular status reports from other staff and engineers also give the council information on current projects and work assignments, keeping accountability in all areas. These reports should indicate if projects are on time, within budget as well as note any barriers that have been discovered. Too often only the balance of money in the bank is considered for financial management when, in fact, the safe keeping of all city assets contributes to the community’s financial health.
Training
Best practices indicate that independent training for government officials adds a measure of autonomy to the information provided. This does not imply that staff-conducted orientations are not critical to the council; they certainly are the best resource for the local financial status and reviews of existing policies. However, additional training available through the Iowa League of Cities, the Institute of Public Affairs, Iowa Finance Officers Association (IMFOA) and the Office of State and Local Government Programs at Iowa State University give independent training to city officials.
