The Fundamentals o of Budgeting for L Local Governments - - PowerPoint PPT Presentation

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The Fundamentals o of Budgeting for L Local Governments - - PowerPoint PPT Presentation

Feb 06, 2024 447 likes •868 views

The Fundamentals o of Budgeting for L Local Governments Oregon Government Finance Officers Association Fall 2018 Conference Tuesday October 16, 10:30 Craig Gibons Executive Director Tax Supervising and Conservation Commission

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The Fundamentals o

  • f

Budgeting for L Local Governments

Oregon Government Finance Officers Association

Fall 2018 Conference Tuesday October 16, 10:30 Craig Gibons Executive Director Tax Supervising and Conservation Commission

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Surv rvey

How Many of You Have…

 Never prepared a budget?  Created a private sector budget?  Contributed to a budget?  Balanced a fund?  Balanced a whole budget? Is anyone here from a school district or community college? Has anyone just moved here from another state?

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Key Concepts

What is the legal purpose of creating a budget? To Create Appropriations. How important is it that the public have an opportunity to weigh in on a budget? Mandatory. Who sets the rules for how budgets are made? The State Legislature.

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Key Concepts

What is the purpose of Local Budget Law? 294.321 Standard Set of Procedures for all Municipal Corporations Program and Policy Descriptions Revenue and Expenditure Estimates Specific Methods for Pubic Input Means of Controlling Expenditures Financial Transparency

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Key Concepts

What are statutes? Laws Created by Legislature and signed by Governor. 294.305 to .565 What are administrative rules? State Agency Created Rules That Elaborate on State Statutes. Handout 1, LBL Admin Rules Index

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Key Concepts

What happens if your district does not follow Local Budget Law? Your District Can Not Levy Taxes Or Expend Money. 294.338(1) Any Public Official Who Expends Public Money

  • In Excess of the Amounts authorized by Law
  • Or for a Purpose other than Authorized by Law

Shall Be Civilly Liable. 294.100

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Key Concepts

What are the three stages of building a municipal government budget in Oregon?

Proposed Approved Adopted

What group of people is the acting body in each of these three stages?

Staff Budget Committee Governing Board

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Step 1: Get Organized

The Board appoints a Budget Officer who is responsible for assembling budget material and information and physically preparing the proposed

  • budget. 294.331

What is that person’s first duty? Create a budget calendar. Handout 2, Sample Budget Calendar

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Step 1: Get Organized

What is a Budget Committee? 294.414

  • The governing body and
  • Equal number of electors
  • May not be officers agents or employees
  • Serve with no compensation
  • Appointed by governing body to staggered 3-year terms
  • Board can remove a member, but only with caution
  • Elects a president at first meeting

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Step 2: Create the Proposed Budget

What is Fund Accounting and why do public bodies use it? Restricted Revenues Resources = Requirements 294.388(1)

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Step 2: Create the Proposed Budget

What are the types of funds according to Oregon Revised Statutes and Administrative Rules? 150-294-0420.

  • General Fund
  • Special Revenue Funds
  • Capital Projects Funds
  • Debt Service Fund
  • Special Assessment Funds
  • Enterprise Funds
  • Internal Service Funds
  • Trust and Agency Funds

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Step 2: Create the Proposed Budget

So the budget is organized by funds and each fund is divided into resources and requirements. Each fund has at least six columns for numbers.

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Step 2: Create the Proposed Budget

Resources First

Beginning Fund Balance Property Taxes Everything Else

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Step 2: Create the Proposed Budget

Beginning Fund Balance This year’s Ending Fund Balance is next year’s Beginning Fund Balance Fund balance as of today (2-1-18) $3,000,000 Estimates from today to June 30th: Resources +1,000,000 Requirements

  • 2,000,000

Ending Fund Balance $1,000,000

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Step 2: Create the Proposed Budget

Property Taxes

Budgeting Permanent Rate and Local Option Levies Assessed Value x Tax Rate = Taxes Extended (Taxes Extended – Loss to Compression) x Collection Rate = Budget Budgeting GO Bond Property Tax Levy Debt Service Required x Collection Rate = Budget

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Step 2: Create the Proposed Budget

District: East Multnomah SWCD

Permanent Rate 0.1000

2014-15 2015-16 2016-17 2017-18 2018-19

Assumptions

Actual Actual Actual Actual Assumed

Actual Assessed Value 44,341,355,333 46,019,324,981 48,021,224,815 49,953,115,275 Actual Growth 4.81% 3.78% 4.35% 4.02% Assumed Growth 1.04 Assumed Assessed Value 51,951,239,886 Taxes Extended 4,449,759 4,631,422 4,833,985 5,024,356 5,195,124 Actual Compression 249,330 182,921 162,545 170,394 Compression as a % of Taxes Extended 5.60% 3.95% 3.36% 3.39% Assumed Compression Percentage 0.0340 Assumed Compression 176,634 Taxes Imposed 5,018,490 Assumed Discount and Delinquency Rate 5.0% Taxes Estimated to be received 4,767,000

Assumption Worksheet

2018-19

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Step 2: Create the Proposed Budget

Total Resources Dictate Maximum Requirements

Taxes Business Licenses Franchise fees Fines Interest income Charges for services Donations Transfers in from Other Funds Transfers In Beginning Fund Balance Beginning Fund Balance Revenues Resources

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Step 2: Create the Proposed Budget

Wages Benefits Retirement Statutory Benefits Professional Services Utilities Office Supplies Travel and Meeting Equipment Property Maintenance Capital Projects Capital Outlay Transfers to Other Funds Transfers Out Transfers Out Contingency Contingency Contingency Ending Fund Balance Ending Fund Balance Ending Fund Balance Unappropriated Personnel Services Materials and Services Expenses Appropriations Requirements

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Step 2: Create the Proposed Budget

Some Rules for Requirements

 Personnel Services: Individual positions do not need to be listed in budget, roll them up to a wages line item. Include Full Time Equivalent (FTE) tally.  Capital Outlay: The district determines what qualifies as a capital expenditure. Document that decision in financial policies.  Debt Service: Budget must show separate amounts for principal and interest 294.388(6)  Contingency: In operating funds only, no limit on size, but can not be used for expenditures- must be transferred to an expenditure line item. 150-294-0430 and 294.463(2)  Ending Fund Balance: not an appropriation. Use is severely restricted. 150-294-0440

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Step 2: Create the Proposed Budget

Revenues – Expenditures = Increase or (Decrease) in Fund Balance Appropriations are listed in the budget resolution and are the legal spending limit for the fiscal year. Requirements must equal Resources.

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Step 2: Create the Proposed Budget

Finish the Proposed Budget

  • Total budget has to balance.
  • Total transfers have to balance.
  • At a minimum, proposed budget consists of the detail budget

sheets and budget message 294.403

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Step 3: Budget Committee Process

Budget Committee Meeting Notice 294.426 (3, 4, & 5)

  • Use the state form.

Budget Committee Duties 294.426

  • Receive the budget message and document
  • Provide for public comment
  • Deliberate, revise, and approve the budget and ad valorem tax amount or rate for all funds

Budget Committee Rules

  • Meeting quorum is one more than half the committee 150-294-0450
  • Affirmative votes require “yes” votes from one more than half the full committee 150-294-0450
  • Individual members have no authority to act, only the committee can act 294.428(3)
  • Deliberations must be done in public at committee meetings 294.426(6)(a)
  • Committee may compel attendance and/or documents 294.428(2)

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Step 3: Budget Committee Process

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Step 3: Budget Committee Process

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Step 3: Budget Committee Process

  • Budget Committee duties are finished when the Committee approves the budget.
  • Off Season Budget Committee meetings 294.428 (2) and state handout

Handout 3, Pre-meeting Topics for Budget Committee Discussion

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Step 4: Prepare Budget for the Board

Update detail sheets with changes from Budget Committee Give notice of Budget hearing 249.438 Notice requirements

Use state form:

https://www.oregon.gov/DOR/forms/FormsPubs/form-lb-1-municipal_504-073-2.pdf

Handout 4, Notices of Budget Committee Meetings Error in the notice, notify board at next available meeting 294.451 Keep track of any staff-initiated suggestions for changes to the budget

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Step 4: Prepare Budget for the Board

Create budget resolution and LB-50

Format of budget resolution: 294.456(3)(a) Manner of Appropriations: 150-294-0510 Include tax rates, tax amounts, and categorization in budget resolution Handout 5, Budget Resolution Create Notice of Property Tax and Certification of Intent to Impose a Tax, Fee, Assessment, or Charge on Property (Form LB-50) Handout 6, LB-50

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Step 5: Hold the Budget Hearing

150-294-0480 Quorum and voting One more than half the board must vote in the affirmative to pass resolution 294.453 any person may appear

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Step 6: Adopt the Budget & Levy Taxes

  • Staff introduces suggested changes
  • Board considers public testimony, deliberates, and changes budget
  • Cannot increase taxes 294.456 (1)(c)(C)
  • Changes limited to 10% of expenditures in each fund 294.456

(1)(c)(A)

  • Budget must be balanced
  • Board votes on Budget Resolution and ad valorem taxes

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Step 6: Adopt the Budget & Levy Taxes

What has the Governing Board done by adopting the budget? Created Appropriations, the legal authority to send money- and the legal limit. Authorized the County Assessor to levy taxes on its behalf.

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Step 7: Compile Adopted Budget Doc

The adopted budget document contains all the legally required notices and documents prepared as part of the budget process. 150-294-0310

  • The 2 budget committee meeting notices and affidavit of publication
  • The budget hearing notice (the LB-1) and affidavit of publication
  • Budget detail sheets
  • Budget Resolution
  • Tax levy Resolution
  • Notice of Property Tax and Certification of Intent to Impose a Tax, Fee, Assessment or Charge on

Property (Form LB-50)

  • Sample ballot of any new voter-approved ad valorem taxes
  • Any other documents the district chooses to include

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Step 8: File ile Documents

For districts not levying property taxes

On or before July 15, file with the State Department of Revenue the resolution adopting the budget 294.458(1)

For districts levying property taxes

On or before July 15 File with County Assessor, 2 copies each of: (294.458(3) and 150-294-0530)

  • LB-50
  • Certification that the Budget Committee approved the ad valorem taxes
  • Voter approved ballot measures for new local option or permanent rate ad valorem tax levies
  • Resolution(s) adopting the budget and certifying the ad valorem taxes

On or before September 30 File with the County Clerk or Assessor the complete budget document 294.458(5)(a and b)

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Step 8: File ile Documents

Missing the July 15 Filing Deadline?

File for an extension in advance (150-294-0520) Notify County and File an Amended LB-50 in arrears

Check here if this is

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Be sure to read instructions in the Notice of Property Tax Levy Forms and Instruction booklet an amended form.

FORM LB-50

To assessor of ________________ County

2018-2019

Notice of Property Tax and Certification of Intent to Impose a Tax, Fee, Assessment or Charge on Property

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Step 9: Changing the Budget

The Appropriations as shown on the budget resolution are the legal spending limits for your district. Appropriations can be increased during the year to adjust the budget for unexpected expenditures. The process to increase appropriations is complex. Here is a flow chart to help determine the method to use.

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Proposed, , Approved, , Adopted

Step 1: Get Organized Step 2: Create the Proposed Budget Step 3: Manage the Budget Committee Process Step 4: Prepare Budget for Board Step 5: Hold Budget Hearing Step 6: Adopt Budget And Levy Taxes Step 7: Compile Adopted Budget Document Step 8: File documents Step 9: Change the Adopted Budget

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Key Concepts

The State Legislature Makes the Local Budget Law. Local Budget Law Creates a Standard Way to Budget. Budgets Create Appropriations. Appropriations are Legal Spending Limits. Public Input Required. Failure to Follow Budget Law Precludes Your District from Levying Taxes or Spending Money.

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Thank you!

Craig Gibons Executive Director Tax Supervising and Conservation Commission Fall 2018 OGFOA Conference craig.gibons@multco.us 503 988-4131

https://www.oregon.gov/DOR/programs/property/Pages/local-budget.asp http://www.tsccmultco.com/

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