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FIN-2.04 - Budget

BUDGET

Binding City Policy

BCP-FIN-2.04 


 

Policy

 

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

 

•  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 and State of Oregon Local Budget Law.

 

The Mayor will develop and present a proposed City budget to the Council for consideration and adoption.  The Mayor's proposed budget will 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 organizations and relate recommendations to the City's vision and goals.

 

The Financial Planning Division of the OMF Bureau of Financial Services will issue guidelines and rules for the preparation and review of the bureau budget requests to the Mayor, including a proposed annual budget process and calendar.  The proposed process and calendar will support community participation and Council deliberations.  These will be published in the OMF budget section of the City website.

 

Budget Monitoring

 

The Financial Planning Division will maintain a system for financial monitoring and control of the City's budget during the fiscal year.  This system will provide the Council with information on revenue, expenditures and performance at both the bureau and fund level.  The system will 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 Financial Planning Division will coordinate the process for budget adjustments requiring Council approval.

 

The Financial Planning Division will periodically publish General Fund financial status reports on the revenues and expenditures to date, and the estimated year-end balance.  At least three times a year, the Financial Planning Division will review all 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) will be added to the General Fund contingency, except for funds allocated to infrastructure maintenance or replacement.  Funds that had been reserved to pay for General Fund encumbrances but are not needed for this purpose will also be added to the General Fund contingency.  These funds will be included as a resource in the annual budget process for the upcoming fiscal year.

 

Review of Council Actions

 

The Financial Planning Division will review ordinances and significant administrative decisions submitted for Council actions.  The objective of these reviews will be to ensure compliance with the City's budget direction and to identify financial and service issues for the Council.  The Financial Planning Division will establish and issue procedures and forms to submit fiscal impact statements for proposed Council actions.  The fiscal impact statement will be available on the Auditor's Office web page in the Council filing documents section.

 

Operating Policies

 

1.  Balanced Budget. In each fund, resources shall be equal to or exceed requirements. Each City fund budget must identify ongoing resources that at least match expected ongoing requirements. One-time cash transfers and non-recurring ending balances may either be applied to reserves or used to fund one-time expenditures; they will not be used to fund ongoing programs, except as provided in section 2 below. Each year the Financial Planning Division will 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 General Fund resources designed to be used for projects and purchases that can be accomplished within the fiscal year. One-time funds may be used for ongoing expenditures for one year to prepare a plan for ongoing funding, or for two years under an adopted financial plan, to transition to ongoing funding or reduced services. One-time funds may also be used for a two-year pilot program, including related limited term positions; the program must establish and report on performance measures each year and, if needed, develop a long-term funding plan. One-time funds may be committed for up to three years for a capital project or a significant planning effort that has a finite duration of three years or less. Such a funding commitment shall be noted in the Mayor's Proposed Budget. Out-year funding may not be committed in excess of the one-time funds projected to be available in the five-year General Fund forecast.

 

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

 

4.  Surplus Revenue and Fund Balances. From time to time additional revenue (grants or surplus beginning fund balances) will be available to bureaus or funds. The City will 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. The City will not increase accruals and non-cash enhancements to revenues as a means to influence fund balances at year-end.

 

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

 

6.  Self-supporting/Full Cost Recovery Basis. City operations will be run on a self-supporting basis where doing so will increase efficiency in service delivery or recover the cost of providing the service by a user fee or charge.

 

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

 

Current Appropriation Level

 

The Financial Planning Division will calculate a Current Appropriation Level (CAL) amount for each General Fund bureau each year.  The calculation will be for the following fiscal year and will be completed and distributed to all General Fund bureaus in time for the bureaus to use their CAL allocation to prepare their budget requests for the coming fiscal year.

 

The CAL calculation will be based on the prior year's ongoing funding level from discretionary money in the General Fund and General Fund overhead, where applicable.  Adjustments will be made to include any inflation factors, changes due to Council-adopted policy, Council-approved contracts and Council-adopted ordinances directing OMF 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 may be issued after a competitive application process but they do not require a competitive solicitation process.

 

The City will avoid issuing grants to assist agencies in meeting ongoing service delivery needs.  Each granting bureau or office will 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

 

Creation of new funds or elimination of existing funds shall be done by Council ordinance.  A review and report by the Financial Planning Division will be required prior to Council action.  The Financial Planning Division will conduct an annual review to assess if each fund is needed. 

 

Each fund in the City will have a statement of purpose, adopted by ordinance of the City Council, that contains several required elements; internal service funds have additional required elements.  See fund statement of purpose requirements.

 

Funds That Receive General Fund Support

 

For funds that receive General Fund support in addition to fees and charges or other dedicated revenues, a rationale for the General Fund support will be included, along with a means for determining the annual level of that support or conditions under which the support should be eliminated.

 

Enterprise Funds

 

For enterprise funds, the required level of debt service coverage for the fund and a description of the relationship between operating and construction funds will be included.

 

Responsibility

 

The Financial Planning Division of the OMF Bureau of Financial Services will coordinate the overall preparation and administration of the City's budget.  See budget process steps.  As an independent assessment of the quality of the City's budget presentation, the City will 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.