THE BUDGET PROCESS
The budget process occurs over a six month period through the collective efforts of department staff, division managers, directors, the City Manager and the City Council. Preparation of the budget is composed of five steps. The first step occurs in March. At this time, the City Council, City Manager and key staff conduct an annual retreat to determine short and long term goals for the City.
The second step is evaluating the current year budget. This process takes place in mid-April and requires department heads to estimate what they will spend for the remainder of the year. The revised budget for each department is not to be exceeded without approval from the City Manager. Concurrently, the Finance Department evaluates revenues based on year-to-date collections to determine if the City will meet its expectations for the year.
The third step in the process occurs in May when the proposed budget for the new year is developed. This step initiates the evaluation of existing program goals and objectives that the departments use to assess performance and fine tunes them for the coming fiscal year. Goals represent the purpose of programs while objectives identify their specific, qualitative aim. Departments review their goals and objectives and propose benchmarks based upon future demand estimates and new management initiatives. Performance measures are also developed to gauge the output, efficiency and effectiveness of the proposed goals and objectives. By evaluating current activities, departments have a basis to propose future service levels within the context of existing budgets and propose enhancements, or program changes, that will add value for the next year if authorized.
The proposed budget is based upon current year appropriations minus capital outlay or one-time expenses. Line item detail is developed for each department. Increased operational or overhead costs for existing programs are expected to be absorbed within the current budget. Programs that can no longer be sustained due to cost impacts may be submitted as program changes for the next year.
During step four, departments submit program changes for the next year. Program changes include add-backs, new programs, capital outlay, and additional personnel. These items are prioritized and submitted by the departments to the City Manager based upon their ability to maintain or enhance existing service. The City Manager reviews department budget requests and meets with individual department heads. After assessing all program changes, the City Manager prioritizes his list of service improvements and reductions and reviews all revenue sources to compile the proposed budget.
The fifth step in the process adopts the final budget. This begins in mid-July when the City Council receives the proposed budget and reviews it at the annual budget workshop. Council members discuss policy objectives and the spending plan in relation to their annual objectives established during the Council retreat. Finalizing the proposed budget, the Council holds a public hearing in August on the pending tax rate and budget. Following the public hearing, the final budget is adopted in September subsequent to the next fiscal year, October 1.
The budget can be amended at any time during the fiscal year through the adoption of a budget amendment ordinance. The General and Utility Funds have contingency accounts that may be used for increases. In addition, amendments are made to account for goods or services charged in one year, but not completed or delivered until the next year. Departments may transfer funds between accounts or between divisions with approval from the City Manager. For certain transfers, City Council approval is necessary.
