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FIN-2.04 - Budget

BUDGET

Binding City Policy

BCP-FIN-2.04 


 

Policy

 

The City shall develop and implement a budget process that shall:

 

  Make prudent use of public resources.

 

  Include financial forecast information to ensure that the City is planning adequately for current and future needs.

 

  Involve community members, elected officials, employees, and other key stakeholders.

 

  Provide performance measurement data to assist in assessing program effectiveness.

 

  Comply with City Charter, City Code, State of Oregon Local Budget Law, and with guidance that has been issued by the City on Governmental Accounting Standards Board (GASB) and Generally Accepted Accounting Principles (GAAP).

 

The Mayor shall develop and present a proposed City budget to the Council for consideration and adoption. The Mayor’s Proposed Budget shall identify major financial and service issues, identify funding requirements and sources of funds, provide supplemental information on programs and service areas, include budget and performance details for all City bureaus, and relate recommendations to the City’s vision and goals.

 

City Budget Office (CBO) shall issue guidelines and rules for the preparation and review of the bureau budget requests to the Mayor, including an annual budget process and calendar. The process and calendar shall support community participation and Council deliberations. These shall be published in the CBO budget section of the City website.

 

Budget Monitoring

 

The CBO shall maintain a system for financial monitoring and control of the City’s budget during the fiscal year. This monitoring system shall:

·  Provide the Council with information on revenues, expenditures, and performance at both the bureau and fund level.

·  Include provisions for amending the budget during the year in order to comply with State of Oregon budgetary statutes and to address unanticipated needs or emergencies.

 

The CBO shall coordinate the process for budget adjustments requiring Council approval.

 

The CBO shall periodically publish General Fund financial status reports on the revenues and expenditures to date, and the estimated year-end balance. The CBO shall also review City financial operations, report to Council on financial results, and recommend financial management actions necessary to meet the adopted budget’s financial planning goals.

 

For the fall budget monitoring process, General Fund discretionary revenue that exceeds budgeted beginning balance (adjusted) shall be added to the General Fund contingency as a set aside, except for funds allocated to infrastructure maintenance or replacement. See FIN 2.03 Financial Planning – Capital Asset Management. Funds that had been reserved to pay for General Fund encumbrances but are not needed for this purpose shall also be added to General Fund contingency. These funds should be used for five-year balancing, mitigating overhead revenue shortfalls in future years due to the true-up process, paying down existing debt as advised by OMF’s Public Finance and Treasury, or other unanticipated needs or emergencies.

 

Review of Council Actions

 

The CBO shall review ordinances and significant administrative decisions submitted for Council actions. The objective of these reviews shall be to ensure compliance with the City’s budget direction, identify financial and service issues, and identify impacts on businesses for the Council. The CBO shall establish and issue procedures and forms to submit fiscal impact statements for proposed Council actions.

 

Operating Policies

 

1.  Balanced Budget. Each City fund budget must identify ongoing resources that match expected ongoing requirements. One-time cash transfers and non-recurring ending balances may either be applied to contingencies or used to fund one-time expenditures; they shall not be used to fund ongoing programs, except as provided in section 2 below. Each year the CBO shall provide Council with the amount of discretionary revenue that is estimated to be non-recurring for the General Fund.

 

2.  One-time Funds. One-time funds are resources that should be used for one-time programs and projects with a defined end date or as bridge funding. Future year funding may not be committed in excess of the one-time funds projected to be available in a fund’s five-year forecast.

 

3.  General Discretionary Revenues. Unless otherwise stated explicitly by the Council, the City shall not dedicate discretionary revenues for specific purposes in the General Fund. This shall preserve the ability of the Council to determine the best use of available revenues to meet changing service requirements.

 

4.  Surplus Revenue. The City shall budget only the amount of revenue that is needed to fund projected expenditures within the fiscal year. Anticipated resources not needed to fund fiscal year spending or unforeseen contingencies shall be budgeted as unappropriated balance or reserves.

 

5.  Fund Balances. The City shall budget loans and transfers when possible and as appropriate to cover negative fund and/or cash balances at year end. See FIN 2.09 Cash Management. The City shall not increase accruals or non-cash enhancements to revenues as a means to affect fund balances at fiscal year-end. Governmental and non-governmental fund balances shall be classified appropriately for reporting purposes in accordance with GASB-required classification categories.

 

6.  Efficiency and Effectiveness. The City shall optimize the efficiency and effectiveness of its services to reduce costs and improve service quality. The City shall coordinate its service delivery with other applicable public and private service providers.

 

7.  Contingencies. The City shall budget a contingency account for each operating fund adequate to address reasonable but unforeseen requirements within the fiscal year.

 

Current Appropriation Level

 

The CBO shall calculate a Current Appropriation Level (CAL) amount for every General Fund appropriation each year. The calculation shall be for the following fiscal year and shall be completed and distributed to prepare budget requests for the coming fiscal year.

 

The CAL calculation shall be based on the current Adopted Budget’s ongoing discretionary and overhead funding plus adjustments to include any inflation factors, and Council-adopted ordinances directing the CBO to revise a bureau’s CAL allocation.

 

City-issued Grants

 

The City may authorize grants for municipal purposes. Only the City Council can authorize grants of any dollar amount. The Council awards grants by ordinance unless it has delegated the authority to issue specific grants to a City elected official or bureau. Grants are authorized in bureau budgets or special appropriations. Grants are a type of contract subject to different legal rules: Contracts are typically used to purchase goods and services to directly benefit City operations, while grants are issued for the purpose of supporting or stimulating a program or activity of the recipient. Grants should be issued after a competitive application process, unless Council waives the policy in the grant ordinance.

 

The City shall avoid issuing grants to assist agencies in meeting ongoing service delivery needs. Each granting bureau or office shall designate a project manager to work with the City Attorney’s Office to prepare grant agreements for approval. The City may audit financial records or performance data to ensure funds are spent in accordance with the purpose of the grant.

 

Grant agreements between the City and public agencies shall be issued as intergovernmental agreements.

 

Fund Management

 

City bureaus shall strive to minimize the number of funds. New funds shall be established and classified in collaboration with the City Budget Office and OMF Accounting Division, and in accordance with GASB requirements. Creation of new funds or elimination of existing funds shall be done by Council ordinance. The CBO shall conduct an annual review to assess if each fund is needed.

 

Each fund in the City shall have a statement of purpose, adopted by ordinance of the City Council, that contains several required elements. See FIN 2.04.01 Fund Statement of Purpose Requirements.

 

Annually bureaus should report to the City Controller any change in the purpose of an established fund that would warrant reclassifying the fund per GASB.

 

Responsibility

 

The CBO shall coordinate the overall preparation and administration of the City’s budget. See FIN 2.04.02 Budget Process Steps. As an independent assessment of the quality of the City’s budget presentation, the City shall annually seek to obtain the award for distinguished budget presentation from the Government Finance Officers Association.

 


HISTORY

 

Resolution No. 35005, adopted by City Council June 17, 1992.

Replaced by Ordinance No. 181829, passed by City Council May 14, 2008 and effective July 1, 2008.

Amended by Resolution No. 37086, adopted by City Council August 6, 2014.