THE COMMUNITY OHIO GFOA SEPTEMBER 23, 2016 CATHE ARMSTRONG, CPA - PowerPoint PPT Presentation

PRESENTING A BUDGET DOCUMENT TO THE COMMUNITY OHIO GFOA SEPTEMBER 23, 2016 CATHE ARMSTRONG, CPA DIRECTOR OF FINANCE & ADMINISTRATIVE SERVICES CITY OF UPPER ARLINGTON

BUDGET DOCUMENT PREPARTION  KEY TO EFFECTIVE PRESENTATION BEGINS WITH GOOD DOCUMENT !  What does the average constituent know about: • Your sources of revenue? • How the money is spent? • Fund accounting? • What services are provided? • Issues and factors facing the government?

BUDGET DOCUMENT PREPARATION  Key Elements of a Budget Document  Introduction and Overview  Financial Structure, Policy and Process  Financial Summaries  Capital and Debt  Departmental Information  Document-wide Criteria

INTRODUCTION AND OVERVIEW  Table of Contents  Allows readers to easily locate information in the document  Number the pages

EXAMPLE: POLK COUNTY, TEXAS  10 Common Questions About the Budget  What is the County’s property tax rate? Page 35  How much revenue comes from taxes? Page 33  What percentage of the budget is spent on law enforcement? Page 43  What are the reserves (or fund balance) of the County? Page 31  How many employees work for the County and where? Page 19  What does “GAAP” mean? Page 131

INTRODUCTION AND OVERVIEW  Strategic Goals and Strategies  The document should include a coherent statement of organization-wide strategic goals and strategies that address long-term concerns and issues • Provides context for decisions within the budget • Include strategies for achieving goals • Include non-financial goals • Include planning processes

EXAMPLE: CITY OF BARLETT, TENNESSEE  Mission Statement  The City of Bartlett’s mission is to plan for and provide superior services and economic growth to the community, in a clean and safe environment with integrity and responsiveness  Key Issue: Annexation/Reserves  Goal #1: To draft a plan for development of the 385 area  Goal #2: Hold a referendum for the annexation of the North Davies, Brunswick Farms and White Oaks area

SHORT-TERM ORGANIZATION-WIDE FACTORS INFLUENCING DECISIONS  Discuss the key factors that guide the development of the upcoming year’s budget.  Inflation Assumptions  Salary and Benefits  Fee Changes  Program Additions or Deletions  Tax Levels  Capital Improvements  Unfunded Mandates  Use of Reserves

EXAMPLE: CITY OF BIRMINGHAM, ALABAMA  Short Term Factors and Budget Guidelines The objective of this budget are to preserve the current level of services with declining revenues while making progress towards and implementing the City’s long range plans. Conservative but realistic projections of revenue & expenditures: Conservative projections help ensure that adequate resources will be available to meet budgeted obligations . Wage Adjustments: Wages for department heads and administrative staff were budgeted to remain the same as in the prior year

EXAMPLE: CITY OF CEDAR FALLS, IOWA  Unfunded Mandates: The State of Iowa continues to deny the City funds to support programs and laws mandated by State Statute. Laws include the 411 pensions, rollback and collective bargaining arbitration, which have hindered the City’s financial ability to deal with needs of essential services. Listed below is an estimate of unfunded mandates…..

INTRODUCTION AND OVERVIEW  Include Priorities and Issues!  Budget Message  Discussion of issues and identification of solutions  Include total budget  Compare upcoming with previous years  Significant Events Update  Any significant events that occur before final budget document complete, should be added as a separate section  Budget Overview  Concise presentation of significant budget highlights

FINANCIAL STRUCTURE, POLICY & PROCESS  Organization Chart  Fund Descriptions and Fund Structure  Departmental/Fund Relationship  Basis of Budgeting  Financial Policies  Budget Process  Including procedures for amending budget after passage  Budget Calendar

FUND CATEGORIES

FINANCIAL SUMMARIES  Present summary of major revenues and expenditures as well as other financing resources and uses to provide overview of all resources budgeted by the organization  Revenues by type  Expenditures by function  Three/Four year Consolidated  Prior budget actual  Current year projections  Proposed budget  Future year(s)

FUND SUMMARIES

FUND SUMMARIES

FINANCIAL SUMMARIES  Projected changes in fund balance  Definition of fund balance  Schedule showing beginning, increases & decreases, and ending balances  Discussion of causes and/or consequences of fund balance changes  Discuss any fund balance projected to changes over 10%

FINANCIAL SUMMARIES  Revenues  Describe major sources  Underlying assumptions  Significant trends

REVENUE SUMMARY

FINANCIAL SUMMARIES  Long-range financial plans  Identify and extend out at least 2 years  Impacts of long-range plan on current & future budgets  Links between long-range forecasting and strategic plans  Outline steps to be considered to balance budget  Communicate to stakeholders which and why options were chosen

CAPITAL AND DEBT  Define “capital expenditures”  Include total capital whether included in budget document or in separate capital budget  Include discussion on major capital projects  Impact on operating budget  i.e. build new center: additional personnel, utilities  i.e. new sewer line: less maintenance, breaks

CAPITAL AND DEBT  Include current debt amounts  Dollars; % of assessed value  Debt limits  Impact on current budget • Annual debt payment amounts • Projected new debt  Funding options  Bond ratings

DEPARTMENTAL INFORMATION  Summary table of personnel  Prior, current and projected  Explanation of staffing level changes  Totals by departments  Department Descriptions  Description of organizational units  Service or functions the departments serve  Major changes in services provided  Maintain same design for each department

DEPARTMENTAL INFORMATION  Unit goals and objectives  Link to organizational goals  Clearly identify  Quantify  Timelines  PERFORMANCE MEASURES  Objective measures of progress toward accomplishing goals of organization  Focus on results rather than inputs

DEBT SUMMARY

SUPPLEMENTAL INFORMATION  Statistical information  Population  Land area  Household income  Local economy  Major taxpayers  Top taxpayers  Employment levels

PUBLIC PRESENTATION  KISS  Avoid technical accounting terms  Explain acronyms • Consider glossary  Use of graphs and charts

WHERE TO BEGIN  PROMOTE THE DOCUMENT PRIOR TO BUDGET HEARINGS  GIVE AMPLE TIME FOR GOVERNING BOARD TO READ/REVIEW  BIND DOCUMENT  ASK FOR QUESTIONS PRIOR TO HEARING  INCLUDE ON WEBSITE

WHERE TO BEGIN  FINANCIAL OVERVIEW – SET THE TONE!  Financial “state of the government”  High level overview  Total budget – all funds  Use of graphs and charts

PUBLIC PRESENTATION  Key factors in the budget  Assumptions made in preparation • Increases/decreases in revenue • Salary increases • Expenditure projections • Any large one-time expenditures  Compare upcoming with previous years • Better? Worse? Why?

PUBLIC PRESENTATION  Discussion of issues and identification of solutions • Enterprise fund deficit  Fee increase  Change service  Subsidize

PUBLIC PRESENTATION  BRING SUPPORT  You do not have to be the sole provider of information or justification!  BE CONCISE  If you don’t know an answer, admit it and provide a time when you’ll have the answer  BE CAUTIOUS OF JOKES, CARTOONS  You just may not be funny!!!  BE CONFIDENT  Confidence goes a long way in obtaining consensus

QUESTIONS