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Apr 08

Planning to Budget

Posted on April 8, 2019 at 11:09 AM by Melinda Mayo

It is a fact of life that taxes must be paid, and just as true that our ability to provide the services we all depend upon is based upon revenue from those same taxes.  This post and the next one will focus on the City’s budget.  This week I will zero in on the process we use to develop the budget, and next week I will address what the FY20 budget proposal includes.

Start with What is Important

Several months before we begin talking about numbers, we start by talking about priorities.  In the early fall of each year, City Council members gather to discuss the priorities for the upcoming year.  This discussion is guided by the existing Strategic Plan which highlights the agreed upon goals, strategies, and performance measures for the City.  The staff will also often present relevant financial and policy considerations – for example, information about the local and state economy, and trends that may affect revenues or expenditures.  This meeting also represents the best time the Council has to review the progress made in delivering the outcomes we indicated we would achieve.  This is where we look at how graduation rates, crime data, job growth, street paving, etc. are doing, and where adjustments in expectations or approaches may be warranted.  The conclusion of these discussions should be affirmation of the Strategic Plan, any necessary adjustments in expected outcomes or performance measures, and a renewed set of “marching orders” for City staff as we begin the development of the next budget.

Provide Instructions and Prepare Proposals

In a Council-Manager form of government such as we have here in Roanoke, it is the City Manager who prepares and presents to Council the proposed budget based upon their priorities and guidance.  I initiate this process by relaying to the various department directors the results of the annual meeting with Council, and providing instructions for preparing proposals for revised or new expenditures.  This is where I indicate if I am seeking proposals for spending reductions or new programs, the areas we will focus on addressing, and other items they need to consider.  This is also when the Office of Management and Budget provides technical guidance regarding deadlines, forms to be used, etc.  Once instructions are provided, the directors begin preparing proposals for service reductions or additions, proposed purchases, etc.  Throughout this process, the directors serve as cross-functional teams, work closely with the Office of Management and Budget personnel and, from time to time, come together for further clarification from the City Manager.  This work will go on for the several months, culminating in submission of proposals in the late part of the winter.

Review and Refine

Once proposals have been received, they are reviewed and refined by the staff of the Office of Management and Budget for presentation to the City Manager.  I, along with the two Assistant City Managers, review the proposals, facilitate presentations by staff of the proposals, ask questions, request additional information or clarification, etc., all in an effort to develop a draft document that begins to move us toward a balance between revenues and expenditures.  While this work is going on, projections of anticipated revenues are being developed.  There will be projections of real estate taxes, personal property taxes, sales taxes, fees, support from the State, grants, etc., which are used to create the total revenue projections used to clarify what we will have available to meet our expenditure needs. 

Sharing with Council

In the early part of the spring we begin briefing Council of the progress—first how revenue projections are looking, then how expenditures are shaping up and, finally, how close we are to presenting a balanced budget.  Late in this process, as we begin to be very close to a balanced budget proposal, we begin briefing the Council members in detail, individually, affording them more time to ask specific questions of what is being considered. This all culminates in a proposed budget presented by the City Manager at a meeting in April, followed by a public hearing and a final Council work session.

Action and Reporting

In May of each year, after months of work, debate, briefings, and discussions, City Council will approve a final budget that will be used to enable delivery of the services we all are dependent upon to conduct our daily lives and business activities.  As we implement the budget, we have staff tracking revenues coming in and expenditures being made to ensure consistency with the budget, and to identify any deviations that need attention.  Additionally, outside accountants and auditors evaluate what we have collected and expended, and verify compliance with regulations, standards, policies and practices, and noting any areas needing correction.

It's a long and sometimes confusing process, but it is the process that we use to determine how to spend nearly $300 million annually needed to provide schools, streets, libraries, parks, law enforcement, fire protection, emergency medical services, stormwater management, solid waste collection and disposal, and dozens upon dozens of other vital services. 

For the next post – what is proposed for FY20?

--Bob Cowell


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