The budget process entails more than just preparing a spreadsheet with a string of numbers. Because implementing any policy usually relies on money, many municipal finance experts maintain that all public policy is ultimately made during the budget process. It is critically important for all those involved to understand their role.
What are the responsibilities of the mayor? council? staff?
Generally, the city's form of government dictates who is responsible for the logistical task of assembling and presenting a recommended budget to council. According to state law, the mayor has the responsibility under the mayor-council form. In the council form, it is the council's responsibility. It is the manager's responsibility under the council-manager form.
Regardless of the form of government, the council, as the governing body, has the sole responsibility for adopting an annual balanced budget.
Determining which expenditure requests to fund is usually the most difficult part of the budget process. Typically, there are more requests than available revenue to fund them.
An effective budget process includes identifying and estimating revenue then allocating the available revenue in a carefully planned manner. Policy statements and multiyear strategic plans should guide this effort.
During the strategic planning process, council sets and prioritizes goals then identifies specific tasks to reach those goals.
Council should adopt policy statements defining taxing strategies, reserve funds, debt practices and the desired levels of services and program expenditures. These policies will clarify the amount of available money and agreed-upon options for generating additional revenue or reducing services, if necessary.
When analyzing expenditure requests, officials should ask two key questions, "Does the requested expenditure fund an item that advances goals critical to the mission of the municipality?" and "Where does the goal being addressed rank on the prioritized goal list?" Council should fund only expenditures that advance the city's strategic plan and provide the desired levels of services and programs.
Appropriately estimating revenue, setting strategic goals for the city and properly matching the money with the goals are the keys to wise and effective budgeting.
The Municipal Elected Officials Institute of Government will offer a training session, "Basic Budgeting and Municipal Finance," on March 21.