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Budgeting in Minnesota. A St. Cloud Perspective. City Manager/Administrator. Key Players in Budgeting. - Responsibility to present budget to City Council - What role do you play? Clarify with your manager. - Details of budget Finance - Meetings with departments – role varies.
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Budgeting in Minnesota A St. Cloud Perspective
City Manager/Administrator Key Players in Budgeting -Responsibility to present budget to City Council - What role do you play? Clarify with your manager - Details of budget Finance - Meetings with departments – role varies
City Council Key Players in Budgeting -Approves preliminary and final levy - Does your city discuss budget with Council prior to beginning budget process? - Tax levy guidelines - Budget priorities
Community -TNT hearing required in December - Do you have forum for input earlier? Key Players in Budgeting
-Responsible to submit budget requests and to manage the budget the following year - Wants/needs always exceed funding - Do your budget instructions establish budget parameters for departments? Department Directors Key Players in Budgeting
Tax Base Growth (Decline) Critical Budget Elements
2009-2011 Budget Deficit Measures Critical Budget Elements • - Determine City's Primary Outcomes • - Weighting of the Primary Outcomes, includes electedofficials and citizen involvement • - Grade services provided by all departments based upon Primary Outcomes • - Prioritization of Services by Primary Outcomes
Tax Base Growth (Decline) Critical Budget Elements • - Are your budget guidelines based on tax rates or on tax levy? • - How reliable is your tax base projection?
Salaries Critical Budget Elements • - Largest cost driver • - Contracts settled? Incorporate into budget • - If negotiations not settled – how do you account for this in your budget?
Health Insurance Critical Budget Elements • - Where do you get accurate estimated increase?
Local Government Aid Critical Budget Elements • - Payment from State of Minnesota to cities based on a “needs” formula to equalize property tax between cities • 2008 – 2011 LGA reductions due to State budget • 2014 New formula and additional funding into LGA • 2015 Inflationary
Levy Limits Critical Budget Elements • - Enacted by State Legislature at various times that cap the amount of levies authorized by municipalities • - Debt levies are exempted from limit calculations • - 2015 budget – No levy limits
Revenue Projections Critical Budget Elements • - Estimate for non-property tax, LGA revenue • - Generally not significant movement or impact on overall budget • - New fees, anticipated building projects, charges for services may be significant
End of May :Timed with end of State Legislative session – yes! • June Departments work on budget and performance measures • July City Administrator and Finance Director meet with departments • August 4-5 Council budget work sessions • September Preliminary levy adopted prior to September 30th • December Truth in taxation hearing • Prior to end of year Certify final budget and tax levy to county(ies) Budget Calendar – St. Cloud
How does St. Cloud attempt to keep City Council discussion on the “big picture” and not mired in minutia? • Council Budget Review Agenda: - Financial trend report • - Budget compliance with financial policies: Budget Fund Balance Debt Service • - Review of City goals • - Performance measures discussion City Council Meetings
- Budget/tax overview City Council Meetings • - Departmental budget review • - 4th and final meeting is on departments and only chance to get into the details
- Survival budgeting of recession • - Unraveling the short-term/unsustainable measures • - Use of fund balance?Rating agency criteria 2015 Budget Challenges
2015 Budget Challenges What initiatives or strategies have you implemented to improve your budgeting process?
2015 Budget Challenges Thank you.