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May 17

FY22 Budget

Posted on May 17, 2021 at 5:08 PM by Melinda Mayo

Today, I presented to City Council the proposed budget for Fiscal Year 2022—July 2021-June 2022.  The budget proposal is balanced, projecting revenues and expenditures of $307, 630,000, a 3.2% year over year increase.  In the following, I share an overview of how the budget is developed, and next week I will share some highlights of what is included in the budget.

Priorities

The annual budgeting process starts with a pair of Council retreats.  The first occurs in late summer with an emphasis on assessing the current Council Strategic Plan.  At this retreat, the Council evaluates progress on the current budget, checks in on how we are progressing on the strategies and actions identified in the Strategic Plan, etc.  At the conclusion of the retreat, the Council will have affirmed or amended its priorities, reached consensus on the broad strategies that are to be used to advance on those priorities, and begun to identify guiding principles for the upcoming budget development.

At the second retreat, generally conducted in late autumn, the Council will receive current budget updates and other pertinent information from City staff to help them refine the guiding principles first discussed at the strategic plan retreat.  It is during this retreat that fundamentals, such as any anticipated tax or fee increases, are discussed and any major funding considerations, such as a costly capital project are introduced.

Following these two retreats, we have a pretty good idea of Council priorities and what needs to be emphasized in the upcoming budget preparation.

Instructions and Revenues

Almost immediately following the autumn retreat, Department Directors are provided broad instructions regarding their budget proposals (what we refer to as offers).  This is where I reinforce Council priorities and emphasis, along with challenges or opportunities that I feel need attention as they work on their proposals.  This year that included the beginning of a greater emphasis on using the budget to better address disparities, increasing employee compensation, and continuing to respond to COVID-related challenges.

Concurrent with this activity, the budgeting staff begins preparing preliminary revenue estimates for the upcoming year.  Again, these are based upon guidance provided by Council at the retreats, along with other pertinent economic considerations.  This year, that required the staff to account for revenue issues associated with COVID impacts, for example sluggish transient occupancy tax performance and lagging food and beverage revenues.  

These activities continue through to the beginning of the new calendar year, at which time the Budget Committee (staff from the City Manager’s Office, the Office of Management and Budget, and others) begins to meet, review revenue projections, and engage with Directors about their preliminary proposals especially any involving new expenditures or personnel increases.  

Briefings

Beginning in February, staff provides monthly briefings to Council about the budget development, sharing with them details on performance of the current budget, preliminary revenue projections, and any other information of significance.  This process continues through at least April, as the Budget Committee continues to refine the proposed budget.  These briefings are recorded and made available to the public, along with the materials provided to Council at the briefing.  This year, the briefings were accompanied by a few virtual town hall meetings, which provided more detailed information.  

Presentation, Public Hearing, and Adoption 

In April or May, after all of this effort, the proposed budget is presented, highlighting how the proposal is balanced and responds to Council priorities.  This year, that presentation took place on May 17.  This is preceded by notice in the newspaper of proposed expenditures by broad categories.  Following presentation of the proposed budget (which will be made available in its entirety on the City’s website), a public hearing on the proposed budget and the associated tax rate is held, where anyone can offer their comments regarding the proposal.  This year that hearing will take place on the evening of May 24.  Following the public hearing, Council conducts what locally is referred to as “Budget Study.” This is where Council discusses in greater detail anything that came from the public hearing or their review of the proposed budget.  Budget Study is the final step before a final budget is adopted by Council.

Adoption of the budget is the last step in the process and must be completed prior to the end of the current fiscal year.  Adoption this year will take place on June 21.  Soon after adoption, the final approved budget is printed and posted on the City’s website for public access. City staff continues to monitor the budget through the fiscal year, alerting Council should it appear that any of the revenue projections will not be met or any other significant issues of concern that warrant their attention or action.

Municipal budgeting is a long and complicated process, but one that is necessary to ensure essential public services can still be delivered in a timely and effective manner.  

In next week’s post, I will discuss some of the highlights of the proposed FY22 budget.

-- Bob Cowell


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