The document provides an overview of municipal budgeting. It defines a budget as a municipality's financial plan and explains why budgets are important for accountability, planning, evaluation, and information. It describes the key components of a budget, including proposed expenses and revenues. The document also discusses different types of budgets like line-item, program, lump sum, and multi-year budgets. Finally, it outlines statutory budget requirements for Wyoming municipalities and budget best practices.
2. What is a Budget?
“The master financial plan of your
municipality”
3. Why have a budget?
• ACCOUNTABILITY - legitimatize public
expenditures and account for control and usage.
• PLANNING - planning, coordinating and scheduling
programs.
• EVALUATION - source for review of project
effectiveness.
• INFORMATION - useful management and
communication documents.
4. What should a budget show?
• The proposed cost for each
function of government.
(Expenses)
• The proposed means for
financing these activities.
(Revenues)
5. Different Budget Types
• Line Item Budget
• Program Budget
• Lump Sum Budget
• Multi-Year Budget
“The basic law of budgets: You
can only spend it once.”
Anonymous
6. Line Item Budgets- focus on
expenditure control
Strengths
• Familiar
• Simple
• Allows for single item
consideration for cuts.
• Easily created
• Lends itself to control and
accountability.
Weaknesses
• Focuses on purchases not
services.
• Too restrictive.
• Improper line item
reporting.
• Large chart of account.
7. Sample Line Item Budget
DEPARTMENT: FIRE
Personnel Services
Salaries $ 5,000
Temporary Wages 1,000
Overtime 500
Total $ 6,500
Supplies
Fuel $ 800
Office 200
Emergency Gear 400
Travel & Training 100
Contract Services 200
Total $ 1,700
Equipment
Hoses $ 500
Truck Equipment 2,000
Total $ 2,500
GRAND TOTAL $10,700
8. Program Budgets- focus on the product of the
budgeting effort not what goes into it.
Strengths
• Budget focus shifts to
accomplishments not
individual purchases
• Total program and
activity cost easily
identified.
• Links to objectives and
performance.
• Weaknesses
• Too complex and detailed
if many variables are
used.
• Harder for elected
officials to learn.
• Increases internal record
keeping and accounting
burdens.
9. Sample Program Budget
PROGRAM: PUBLIC SAFETY
•Police $ 8,000
•Investigation 1,000
•Traffic Enforcement 3,000
•Fire Suppression 5,400
•Fire Training 500
•Fire Prevention 1,800
•Rescue 2,000
•Fire Administration 1,000
•Building Inspection 1,000
•Animal Control 1,500
•Traffic Engineering 500
•Street Lights 2,000
GRAND TOTAL $10,700
10. Lump Budgets- based on trust between
elected officials and staff.
Strengths
• Allows elected officials to set
goals and policy without being
weighed down by line item
detail.
• Gives department heads a high
degree of freedom in managing
their department.
• Budget funds not spent can be
carried forward to next year-
encourages saving.
Weaknesses
• See Strengths.
“If the police chief gets a budget. If he
wants to use it to buy police cars or to
hire people, that’s his business. What I
care about is that the city gets good
police protection and he’s got money
left over at the end of the year.”
Gale Wilson, Fairfield City Manager
11. Sample Lump Sum Budget
DEPARTMENT AMOUNT
•Fire $10,700
•Police 13,500
•Library 8,000
•Social Services 7,000
•Sanitation Services 11,000
•Public Works 22,000
•Planning 1,500
•Parks 2,900
• TOTAL $76,600
12. Multi-Year Budgets- saves staff time
and money.
Strengths
• Flexibility in using resources
because of the two year time
frame.
• Less work in the second year.
• Provides long range planning.
• Can result in significant cost
savings.
Weaknesses
• Difficult to estimate second
year budget revenues.
• Newly elected officials may not
want to accept budget.
• May not be practical if the state
has an impact on local funding.
• Costly accounting, reporting
modifications.
13. Bi-Annual Budgeting
W.S. 16-4-104(h) allows cities and town to employ a two (2)
year budget cycle and adopt a two (2) year budget under the
following conditions:
• The two (2) year period shall begin with the city’s or
town’s first fiscal year following a budget session of the
legislature;
• For the second year of the budget cycle, the budget
officer shall prepare a budget adjustment that includes the
original budget and any proposed changes, to be adopted
by the governing body in the same procedure as a budget.
14. Budget Processes
• Preparation - the budget officer (YOU) collects
financial data and provides program expense projections
and funding needs to council for review.
• Adoption - must pass a budget ordinance during the
last quarter of the fiscal year for the upcoming year.
• Execution - governing body must adopt the budget
within 24 hours of their budget hearings, which must be
held between the 2nd and 3rd Tuesday in June.
15. BUDGET DEVELOPMENT FILE
• Complaints about service.
• Census Data
• New program ideas, history, revenue trends, and new funding options.
• Newspaper/Magazine Articles
• Performance data (i.e.. Workload, service demands.)
• Audit recommendations
• New technology information.
• Letters of commendation
16. PROGRAM CONSIDERATIONS
• Is it Mandated?
• Will productivity be increased?
• Will legal exposure be lessened?
• Will it cause an increased workload?
• Will it result in higher prices?
• Can the additional cost be offset by revenues?
• What new challenges are developing that will require resources?
• Is this something the elected officials want to see?
• What are the organizational goals set by the elected body?
17. BEGINNER’S MISTAKES
• Failure to follow instructions or meet deadlines.
• Mathematical errors.
• Not asking for enough money to meet expense needs.
• Asking for too much money without justified need.
• Not recognizing the difference between controversial and routine
proposals.
• Not asking “stupid” questions.
• Failing to research revenue trends.
• Not considering dedicated funding sources and knowing which can
and cannot be used for other projects.
18. ERRORS COUNCILS NEVER MISS
• Spelling errors anywhere in the material.
• Columns that do not add correctly.
• Negative balance shown as a positive.
• Decimal in the wrong place.
• Inconsistent narrative in different parts of the budget.
“Big budgets, small budgets, they are all the
same - just add or subtract a few sets of
zero’s.”
Budget Director, New York City
19. Budget Questions
• Why is this needed?
• When is this item required and
why?
• What are the total direct and
indirect costs?
• What are the objectives?
• What are the personnel
requirements?
• Can this item be phased?
• What is the program life-span?
• Who will benefit and what are
the political impacts?
You should be able to answer these questions for any program or
capital project.
• What additional training and
equipment will be needed?
• What problems will it create?
• How much revenue will be
generated?
• Can the cost be recovered?
• Where will we get the money to
pay for it?
• Can it be financed through a
grant?
• What will happen if it is not
funded?
20. Budget Evaluation
• Did we meet our objectives?
• What adjustments were made?
• What was accomplished?
• What did we do wrong?
• What did we do right?
“A government which robs Peter to pay
Paul can always depend on the support of
Paul”
George Bernard Shaw
21. Presenting Budgets to Council
and the Public
• Summarize the main issues up front.
• Be prepared to answer questions.
• Cite statistics, measures and sources.
• Humanize responses with specific examples.
• Provide an overall perspective. What does this mean?
• Utilize simple but meaningful graphics and visuals.
• Anticipate the critical issues and address them.
• Budget needs to be clear to the public.
22. Presenting Bad News
• Explain the issue in plain English.
• Get to the point.
• Present bad news promptly, don’t keep them guessing.
• Outline consequences.
• Show emotion.
• Focus on what is being done to deal with the issue.
• Articulate the assumptions being made.
• Express your best professional judgment.
• Leave them with the feeling they are in charge.
24. Cities/Towns under 4,000
• Must prepare its budget in a format that complies
with W.S. 16-4-104(f).
– Shall be prepared in a timely fashion allowing the
governing body to meet the hearing date and notice
requirements.
• Publish at least one week before the public hearing.
• Hearing held between 2nd and third Tuesday of June.
– The proposed budget shall set forth:
• Actual revenue and expense in the last completed year.
• Estimated total revenues and expenses for current year.
• Estimated available revenue and expense for upcoming year.
25. • Must pass an appropriations ordinance during the
last quarter of the year to take effect at the
beginning of the new fiscal year. This will be
May 1st unless otherwise provided by ordinance.
• Each budget shall be accompanied by a budget
message outlining the proposed financial policies
for the budget year, describing important features
of the budgetary plan and reason for changes from
previous years.
26. • Prior to adoption, the governing body must
determine the amount of general taxes needed to
provide for expenses and the amount of any
special tax or levy needed.
• The budget officer must certify the amount to the
county clerk:
• by the 4th Monday in May if the fiscal year begins on May 1;
or
• by July 31st if the fiscal year begins on July 1.
27. Cities and Towns over 4,000
• Unless changed by charter, all incorporated first
class cities or town with a population over 4,000
and all city manager cities must comply with the
provisions of the Uniform Municipal Fiscal
Procedures Act (W.S. 16-4-101 - 16-4-124).
• Fiscal years run from July 1 to the following June
30 (W.S. 16-4-102 (a)(x)).
28. Uniform Fiscal Procedures Act
• Department officials must submit budget requests
to the budget officer by May 1st.
• Budget Officer must then prepare tentative budget
and file with governing body by May 15th.
• Hearings scheduled between 2nd and 3rd Tuesday
in June. At a time chosen by the governing body.
• Must be in a format that best serves the needs of
the municipality.
29. • No later than 30 days after adoption of the budget
the governing body shall provide the following
information to the Legislative Service Office
(W.S. 16-1-104(j)):
– report the budget’s actual revenue/expense in the last
completed year.
– Estimate total revenue/expense for current year
– Estimated available revenue/expense for upcoming
budget year.
30. • Budget must contain estimates with specific work
programs and other supportive data requested by
the governing body.
• Budget must be accompanied by a budget message
outlining the proposed financial policies and
explain any changes from previous years.
• A summary of the budget proposed for adoption
must be entered in the minutes.
31. • The budget summary must be published at least
one week before the date of the public hearing in a
newspaper having general circulation or by
posting the notice in three conspicuous places.
• A copy of the publication of the hearing must be
sent to the state examiner.
• No appropriation in the final budget can be in
excess of the estimated expendable revenue of the
fund (W.S. 16-4-110).
32. • Within 24 hours of the public hearing, the
governing body must, by resolution or ordinance,
make the necessary appropriations and adopt the
budget.
• Copy of certified budget must be furnished to the
county commissioners on or before July 31st.
(W.S. 39-2-401) and certified copies of the
adopted budget must be on file in the budget
office for public inspection.
33. Budget Amendments
• Budgets can be amended by the governing body
adopting a resolution (W.S. 16-4-112 and W.S.
16-4-113).
• If an emergency exists, the governing body can
make the expenditure from accumulated revenues
upon notice of declaration of emergency published
in the paper. (W.S. 16-4-114).
34. Budget Myths & Legends
• You have to have a balanced budget.
• You can’t budget for grants until you receive confirmation
of award.
• You have to budget reserves as a revenue source.
Our budget is balanced. 50% of our numbers
are real, and 50% are made up.”
The Unknown Comic
35. Brown’s Budget Beliefs
• Managers and supervisors are paid to
manage, not be managed.
• Managers can find ways to do things
more efficiently and with less money
if given the freedom to innovate and
control their resources.
• Self-imposed goals and deadlines are
power motivators
• Interdepartmental competition is
healthy.
• Managers should concentrate on the
bottom line.
• Budgeting is a means to an end, not
an end in itself.
• Given the freedom and the trust,
people will do what’s right.
• Decisions about the best way to get
things done are best made by those
who are assigned to do them.
• If given an incentive to save money,
and operate more efficiently, people
will do so.
• Department managers or supervisors
know more about their needs and
priorities that the City Manager’s
office or the Budget officer.
Don Brown, City Manager, distributed these budget beliefs to his staff.
36. Resources
• Wyoming Department of Audit – Municipal Accounting
Handbook. --
http://audit.state.wy.us/PFUNDS/MANUALS%20and%20RFP%20form/Wyo
ming_Municipal_Accounting_Handbook_2003.pdf
• GFOA Recommended Budgeting Practices --
http://www.gfoa.org/index.php?option=com_content&task=view&id=120&Ite
mid=134
• ICMA – www.icma.org
• APTUS&C - http://www.aptusc.org/
• State of Wyoming – www.state.wy.us
37. Acknowledgements
This presentation was based on information provided in the
following text resources:
• “Little Budget Book” A Portable Budgeting Guide for Local
Governments, By Len Wood, Copyright 1993 & 2000 by Len Wood
& Associates.
• WAMCAT Handbook
• Department of Audit Municipal Accounting Handbook
• Wyoming State Statutes
