Post on 25-Dec-2015
• It’s the Law– Kansas law requires a budget before a local
government can spend money and levy taxes(K.S.A. 79-2927)*
• To Manage Our Resources– People– Money– Time
*In some cases, Missouri requirements may differ
WHY WE BUDGET
• Used by Elected Officials to allocate resources
• Budget is first a policy document– Allocation of resources in line with City’s
policies– Resources allocated based on priorities
of Governing Body
PLANNING
• Budget is a management tool– Management allocates resources to
operational areas to meet Governing Body policy objectives
– Requires management to formulate a work plan
MANAGEMENT
• Provides assurance to citizens regarding wise use of tax money
• Budget provides control– Legal restraints– Resources are spent in accordance with plan
CONTROL
• Must have a fiscal year budget• Is done on an annual basis• Must hold public hearings• Must be balanced (no deficit)• Governing Body must approve it by August
25th of the year prior (in Kansas)
PREPARING THE BUDGET
• Ideal– Establish your mission
• Strategic Plan• Goals and Objectives
– Measure your mission• Assets – what and what condition• Benchmarking – cost of activities; people
requirements– Develop your budget requirements
• Incremental/program/zero-based
PREPARING YOUR BUDGETIdeal vs. Actual
• Actual– Typically, it’s incremental budgeting
• Assigned personnel costs• Assigned budget % increase (or decrease)• Expanded level packages (for increases in
mission or special requirements)• Mostly, it is “fill in the blanks”
PREPARING YOUR BUDGETIdeal vs. Actual
• General• Special Revenue• Debt Service• Capital Projects• Special
Assessment
BUDGET FUND TYPES
• Enterprise• Internal Service• Trust and Agency• Reserve
• Special Street and Highway
• 1/8 Cent Sales Tax Fund• Special Park and
Recreation• Special Alcohol Control
Fund• Convention Center• Transient Guest Tax Fund• Transient Guest Tax –
Capital
SPECIAL REVENUE FUNDSOverland Park Examples
• Transient Guest Tax – Operating
• Capital Improvement Fund• Equipment Reserve Fund• Special Street Improvement
Fund• Special Machinery &
Equipment• Stormwater Utility• Soccer Complex Fund
FINANCIAL PLANNING
FINANCIAL MANAGEMENT & REPORTING
BUDGET PROCESSING
• Actual vs. Budget• Adjustments• Adherence to Financial Plan• Telling the Story
• Process• Forms• Approval• Implement Policies
• Financial Priorities• Policies• Council Involvement
Effective Supervisory Skill Building, @ICMA 2005
• Long-Term Financial Plan– Five-year revenue and expenditure forecast
• Capital Improvement Program (5- year)– Expenditures for capital infrastructure, equipment and
facilities. Capital items are costly, nonrecurring, and have a life span of multiple years
• Maintenance Program (5-year)– Significant repair, rehabilitation, or in-kind replacement of
existing city infrastructure or facilities.• Operating Budget
– Supports ongoing operations & routine maintenance – Personnel– Supplies– Equipment– Operation of facilities
BUDGET COMPONENTS
Effective Supervisory Skill Building, @ICMA 2005
• Examines historical revenues & expenditures.• Examines historical, current & projected
economic & demographic indicators.• Projects future financial outlook of City based
on a set of assumptions.• Facilitates decisions that ensure the ongoing
financial solvency of the City.
FIVE-YEAR FINANCIAL PLAN
Effective Supervisory Skill Building, @ICMA 2005
• Funds the first year of the capital improvement plan – a multi-year plan for the purchase and financing of infrastructure, major equipment, and facilities
• Financing may come from tax revenues, intergovernmental revenues, long-term borrowing, or combination
CAPITAL IMPROVEMENTS PROGRAM
Effective Supervisory Skill Building, @ICMA 2005
Project Types
Funding Sources
2010-2014 CIP = $159,785,000 2011-2015 CIP = $121,528,000 2012-2016 CIP = $98,923,000 2013-2017 CIP = $82,940,500 2014-2018 CIP = $121,582,000 2015-2019 CIP = $128,665,000
Street In-frastruc-
ture67%
Other Infrastructure8%
6arks & Recre-ation2%
9acilities &
Equip-ment14%
In-ter-gov-ern-men-
tal32%
De-velop
er Fund-
ing10%
City at
Large33%
Sales Tax19%
Other 26%
2015 – 2019 CIP = $128,665,000
Effective Supervisory Skill Building, @ICMA 2005
• Funds the first year of the maintenance plan –a multi-year plan for major and preventive maintenance
• Financing may come from tax revenues, intergovernmental revenues, long-term borrowing, or dedicated sources
MAINTENANCE PROGRAM
Effective Supervisory Skill Building, @ICMA 2005
2010-2014 = $61,979,000 2011-2015 = $53,960,000 2012-2016 = $63,948,000 2013-2017 = $69,895,000 2014-2018 = $77,110,000 2015-2019 = $79,040,000
5treets79%
Traffic Mtg.4%
Storm Drainag
e9%
6acili-ties4%
7arks & Rec5%
Intergovern-mental35%
City at Large45%
6/8-Cent Sales Tax7% City Ded-
icated 14%
2015 – 2019 MAINTENANCE = $79,040,000
Project Types
Funding Sources
Effective Supervisory Skill Building, @ICMA 2005
• Can reduce major fluctuations in tax rates
• Encourages the coordination of capital, maintenance and operating expenditures
• Allows flexibility in scheduling bond issues
• Helps the city time projects to obtain state and federal funding
• Helps taxpayers understand the community’s long-range needs
CAPITAL IMPROVEMENT ANDMAINTENANCE PLANS
Effective Supervisory Skill Building, @ICMA 2005
• Maintain low property taxes
• Sales taxes are primary funding source
• Utilization of user fees
• Maintain adequate reserves
OVERLAND PARKFINANCIAL PLANNING POLICIES
Effective Supervisory Skill Building, @ICMA 2005
• Departments Develop Budget Proposals– Allocate resources for ongoing operations– New programs and / or increased funding– Developed by Line Item/Cost
Center/Department– Based on historical patterns and knowledge
about changes in patterns/approaches– Allocations/Re-allocations based on constraints– Use of consistent format/procedures
throughout organization
BUDGET PROCESS
Effective Supervisory Skill Building, @ICMA 2005
• Prepare early
• Keep track of changes in your workload
• Identify ways in which your work unit can become more efficient
• Talk to other supervisors
ROLE OF THE SUPERVISOR
Effective Supervisory Skill Building, @ICMA 2005
• Monitor Budget Expenditures
• Purchasing in Accordance with Policy
• Expenditure Management
• Performance Measures
FINANCIAL MANAGEMENT
Effective Supervisory Skill Building, @ICMA 2005
Overland Park receives most of its revenue
from what source? • Property Taxes
• Sales Taxes
• Fines
• Building Permit Fees
• Grants
Effective Supervisory Skill Building, @ICMA 2005
$38,203,000
Property Tax23%
$69,936,250 Sales Tax
42%
$7,718,700 Intergov-ernmental
5%
$49,528,510
City Gen-erated30%
2014 Current Revenue = $165,386,460
2014 CURRENT REVENUES
Effective Supervisory Skill Building, @ICMA 2005
Overland Park Mill Levy is 12.833 mills to support the 2012 Budget.
What percent is that of a homeowner’s property tax bill?
• Approximately 4%
• Approximately 11%
• Approximately 23%
• Approximately 37%
Effective Supervisory Skill Building, @ICMA 2005
PROPERTY TAX RATES2014 Budget
2014 Budget - Mill LeviesBy School District By School District
Mill Levy Rate Property Tax Amounts
Taxing Entity
Shawnee
Mission Blue Valley Olathe Spring Hill
Shawnee
Mission Blue Valley Olathe Spring Hill
State of Kansas 1.500 1.500 1.500 1.500 $43.13 $43.13 $43.13 $43.13Johnson County 17.745 17.745 17.745 17.745 $510.17 $510.17 $510.17 $510.17JCCC 9.551 9.551 9.551 9.551 $274.59 $274.59 $274.59 $274.59JOCO Parks & Rec 2.347 2.347 2.347 2.347 $67.48 $67.48 $67.48 $67.48JOCO Library 3.155 3.155 3.155 3.155 $90.71 $90.71 $90.71 $90.71School District - District Assessment & Bond35.611 50.036 49.486 45.242 $1,023.82 $1,438.54 $1,422.72 $1,300.71School District - State General 20.000 20.000 20.000 20.000 $529.00 $529.00 $529.00 $529.00Recreation Commission 0.000 2.201 0.000 3.250 $0.00 $63.28 $0.00 $93.44Overland Park 12.833 12.833 12.833 12.833 $368.95 $368.95 $368.95 $368.95
Total Mills 102.742 119.368 116.617 115.623 $2,907.83 $3,385.83 $3,306.74 $3,278.16
Effective Supervisory Skill Building, @ICMA 2005
Approximately how much does an owner of a $250,000 house pay in
property taxes to the City?
• $197 per year
• $368 per year
• $533 per year
• $869 per year
Effective Supervisory Skill Building, @ICMA 2005
The amount the owner of a $250,000 house pays
in property taxes to the City?
• $368 per year
• 1 mill = $1 for every $1,000 of assessed value
• $250,000 * assessment rate of 11.5% / 1,000 * mill levy rate of 12.814 = $368.40
Effective Supervisory Skill Building, @ICMA 2005
What percentage of the City’s 2012 operating budget is allocated for
public safety services? • 19%
• 32%
• 48%
• 63%
Effective Supervisory Skill Building, @ICMA 2005
$17,637,389
Finance & Adminis-
tration16.2%
$51,519,255
Public Safety47.3%
$16,369,566
Public Works15.0%
$23,216,790 Com-munity Devel-opment21.4%
2014 Budget = $108,743,000
2014 OPERATING BUDGET(By Area)
Effective Supervisory Skill Building, @ICMA 2005
What is the largest category of expenditures
in the budget?
• Personnel Costs
• Commodities & Contractual Services
• Capital Improvements & Debt Service
Effective Supervisory Skill Building, @ICMA 2005
Commodities3.52%
Contractual Services9.99%
Capital Outlay1.44%
Maintenance 10.57%
Debt Service13.03%Capital
Imp5.28%
Contingency5.41%
Salary and Wages69.40%
Medical & Life Insurance 11.45%
Payroll Taxes6.29%
Retirement12.86%
2014 BUDGET(Excluding Transfers)