How a budget is made
Tis the season when governments prepare review and approve budgets.
This is a time of year when involved residents and elected officials from the legislative branch of government alike, flood the administration and staff with questions regarding the preliminary budget submitted to the City Council from the Mayor.
While some questions are broad in nature, others are very detailed and focus down to the nitty gritty numbers, and still others focus on layout, numbering, and labeling.
Having personally served as a legislator and now as an executive, I sometimes wonder if there are ways to help citizens and legislators better understand the process and the statutory divisions between the executive and legislative branches.
So, I thought I would share a little about the way a budget is prepared and adopted.
A city is required to have a budget by State law. The adopted budget constitutes the legal authority for expenditures, which may not legally exceed appropriations.
The budget process affords both an interesting and challenging opportunity to reassess plans or legislative policies and the means for accomplishing them.
It is through this effort that the budget becomes the single most important policy document produced.
Much effort is expended by the mayor, staff and city council to ensure the budget represents the priorities of the community.
The budget functions as a policy document in that the decisions made within the budget are designed to guide and authorize the actions taken during the budget year.
The budget details all of the operations of the City.
Through the budget process, activities of each City function are planned, debated and formalized.
The budget process provides a unique opportunity to allow and encourage public review of City operations.
The budget describes the activities of the City and the reason for those activities.
The most traditional use of the City’s budget is as a financial planning tool.
A balanced budget is a State law requirement of all cities. It must be adopted as a balanced budget and must be in place prior to the expenditure of any City funds.
The revenues of the City are estimated, along with available cash carried forward, to indicate funds available.
Each year, city staff, who work under the direction of the mayor as part of the executive branch of government, prepare their department budgets and review them with the mayor prior submitting a city budget to the City Council.
Imagine now, if you will, becoming the mayor at the end of July and being told your primary responsibility, as CEO is to deliver a balanced budget to the city council by October 5.
When I walked in as mayor, I asked City staff to carefully review every part of the budget and assume there was no new revenue available.
Staff worked hard to squeeze where they could in a city that over the last decade has already reduced staffing, taken furloughs, and frozen wages.
On August 31, department directors presented an overview of each department’s functions and needs to the city council to solicit input.
After that, I asked each director once again to justify to me any changes to their requested budget.
Finally on October 5, I delivered a balanced budget to the council that preserved jobs and programs.
The budget is now in the hands of the legislative branch of government.
Their job is to review it, ask questions, and decide if they share the same priorities as the mayor and staff.
Under state law, the budget must be passed by the council and signed by the mayor prior to December 31.
I hope this has been helpful and as this process continues you will take the time to share your priorities with city council as they deliberate this very important document.