If you have a question about the municipal budget process, please email email@example.com.
Questions will be answered prior to the City Council Meetings. Answers will be posted on this webpage and shared during the Administrative Update portion of the City Council Meetings.
What is the audit process for creating and publishing the budget book?
The Finance Director enters all budget items into the City’s financial system. The budget items are then exported out of the financial system into a customized budget excel workbook. That excel workbook is linked to a Word Document that automatically pulls the data straight from the spreadsheet. Departmental narratives, transmittal letters, and org charts are added and updated manually. The Finance Director conducts a thorough audit of all tables to ensure the amounts tie out. Time permitting, the City Administrator’s office conducts a secondary review of the budget book to check for formatting errors. One column label near the end of the book was updated to properly reflect FY2022 after the original budget book was published. No data errors have been found or reported in the published or online budget books. The final approved budget book is submitted to the national Government Finance Officers’ Association and has received their Distinguished Budget Award for two years in a row.
How many enterprise funds does the City Maintain?
The City has four enterprise funds related to the Water Resource Recovery Department: WRRD Operations, WRRD Sewer Impact Fees, WRRD CSO Impact Fees, and WRRD Subsurface Disposal Impact Fees. These four funds are reported together in the Annual Financial Report but reported separately in the City’s Annual Budget Book.
Which funds are the Council only required to approve?
The procedure outlined in Article IV of the City Charter is specifically related to appropriating taxes in support of City operations, which is reported and tracked in the City’s General Fund. However, as a past practice, Council has also reviewed and approved the WRRD Operations budget, as that budget affects the Sewer User Rate, which is approved by Council annually. Like many other municipalities, the City maintains several other Funds, each with a self-balancing set of financial statements, that are reserved for special purposes dictated by the ordinance, covenants, or other controls established at the time the fund is created. For example, TIF revenues and expenditures are tracked and reported in a special revenue fund. Expenditures from these funds are governed by the related governing language. To maintain transparency, the City Administrator’s budget book includes anticipated revenues and expenditures for any fund with anticipated activity for the coming fiscal year.
Why was the Overlay line item removed from the budget? It was part of the budget process through and including FY2018.
The overlay was budgeted as an expense in error before FY2019. Overlay is the excess tax revenue calculated on the Assessor’s MVR form based on the Municipal Valuation x Tax Rate + Homestead Reimbursement + BETE Reimbursement – Total Assessments. Since tax revenues are never collected at 100% within the fiscal year, the Overlay provides a cushion to ensure the city does not take on any fiscal risk related to tax delinquencies. It is not an expense.
Why are there sometimes expenses on accounts with no approved FY2021 Council amount?
This can occur for several reasons.
- Purchase Orders - Most commonly, departments will appropriate funds from one fiscal year to roll into the next fiscal year on projects that they were unable to complete prior to the close of the year, but for which there are contracts in place. This ensures that the city can meet its fiscal obligations and complete projects approved by Council without increasing the following year’s tax rate. This appropriation shows in the “Budget” amount for the account, but not in the “Approved” column because the “Approved” column only reflects Council appropriation of the budget at the official special meeting of Council the second week of May.
- Budget amendments – budget amendments are approved by Council mid-year. The amount approved by Council shows in the “Budget” column rather than the “Approved” column because it happened after the official budget approval.
- Capital Projects - Finally, the Charter mandates that funds appropriated for Capital projects may be retained indefinitely so long as the project is in progress. To track available funds by project, we use the “Budgeted” column, which reappropriates the remaining funds available for each project on an annual basis. For this reason, the “Budget” amount will be larger than the “Approved” amount because the “Budget” column includes funds approved in past years. If funds for a project remain unused for three years, the funds are returned to the General Fund.
- Other Reasons - In more rare circumstances, Finance or the City’s auditors may determine that a particular transaction needs to be in a different kind of account than the one that the Council originally approved. Council can always correct these sorts of items by approving a budget amendment, but there is no net impact to the City’s performance. Finally, small expenditures may show in miscellaneous accounts in each department’s budget. Since the form of the budget approved by Council annually is at the departmental level, these expenditures are not considered a problem unless the Department bottom line will be over budget.
Why does the budget book have an “Approved” column for the General Fund but only “Budget” column for the other funds?
This is because the procedure outlined in Article IV of the City Charter is specifically related to appropriating taxes in support of City operations, which is reported and tracked in the City’s General Fund. Council “approves” all City operational expenditures and the related necessary tax assessment therefore the column is called “Approved” for all General Fund line items. Other funds’ budgeted amounts are governed by the ordinance, covenants, or other controls established at the time the fund is created. The budget book is reporting anticipated revenues and expenditures as controlled by the fund’s related governing language for Council’s review. However, actual revenues may vary significantly and therefore so can the expenditures.
Why is the amount expended in the Capital fund higher than the “Adopted” budget column on page 15 of the budget book?
Please see the answer about “Capital Projects” above. The “Budgeted” column represents the full amount of funds available to be expended on each project, including amounts approved by Council in past years.
Why do we have an unassigned fund balance of 31%, which is over the maximum of 16.67% in Chapter 15 of the City’s Ordinance?
Although expenses occur throughout the fiscal year, most of the City’s revenue is received in September and March with the semi-annual tax bill due dates. In September and March, there is much more revenue than expenses, so the unassigned fund balance looks very high! However, the City does not have very much revenue coming in each month between tax dates, so the fund balance goes down. In January, the unassigned fund balance was just 11.66%. Annually, the Finance Director runs a cash flow analysis so that there are no surprises about how high or low the unassigned fund balance will be each year. Finally, it is important to remember that the unassigned fund balance maximum set forth in the City’s Ordinance is based on the audited end of year financial statements, which are only reported annually as of June 30th. Any other unassigned fund balance percentage is preliminary and not subject to Chapter 15 maximum and minimum percentages.
The line item in the City Clerk’s budget for Department Head wages has gone down. Why?
The line item was budgeted too high last year. HR has conducted a thorough audit of this line item and the employee has received wages in line with non-union COLA increases annually. Further information regarding the pay equity of this position will be forthcoming with the findings of the City’s Wage and Compensation study.
When can the public provide input during the budget process?
Public Comment is established at three minutes per the Council Rules and Order of Business. The budget Public Hearing and the budget email address offer additional opportunities for community members to provide feedback and ask questions.
Why will future solicitor costs be paid out of contingency?
The Contingency line is designed to be used to cover unanticipated expenses. Solicitor costs have been higher than anticipated, and so these unanticipated solicitor costs should be paid out of Contingency. However, Council may prefer to create a budget amendment to move money from the Contingency account to the Solicitor account for improved transparency.
Why is the word “adequate” used regarding accounting data? Why not “accurate”?
The finance department would be happy to update this language for the next published financial report.
The City Ordinance Chapter 15 requires a minimum reserve or unassigned fund balance of 8.33% and a maximum of 16.67%. How does the City Administrator know what is available to present to Council in January?
The City Administrator uses the audited annual financial statements, which are reported as of June 30th each year. The unassigned fund balance is calculated based on the unassigned fund balance for all governmental funds divided by the following year’s general fund budget. The FY2020 Unassigned fund balance of 14.7% equals the unassigned fund balance as reported on page 42 of the financial statements at $9,016,689 divided by the General Fund total adopted budget of $61,464,403. The City’s Annual Financial Reports are issued by December 31st of each year, following the City’s annual audit and an exhaustive set of reviews and audits in partnership with the City’s auditing firm RKO.
Why are there so many different increases in pay for Non-Union employees?
All employees have been budgeted for the same 1.3% COLA in FY2022 with additional funds reserved in Contingency pending union negotiations and the results of the wage and salary audit. Any variations may be related to mid-cycle pay adjustments or other items.