Iowa League of Cities Annual Conference & Exhibit

Fiscal Planning and Tips for Compiling and Presenting the Budget

Cindy Kendall, Iowa State University Extension and Iowa League of CitiesJennifer Larson, Budget Director, City of Dubuque

Handouts and presentations are available online at www.iowaleague.org

Budget and Fiscal Planning▪ The Iowa Budget: Understanding the basics

▪ Operating vs Capital Budgets

▪ Debt Management and other Fiscal Policies

▪ Types of Budgeting Methods

▪ Preparing the budget

▪ Presenting the budget

▪ Budgets as Management Tool

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The mission of the budget process is to help decision

makers make informed choices for the provision of services and

capital assets and to promote stakeholder participation in the

decision process.

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A Good Budget

▪ Incorporates a long-term perspective

▪ Establishes linkages to broad organizational goals

▪ Focuses budget decisions on results and outcomes

▪ Involves and promotes effective communication with stakeholders

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Revenue Sources in Iowa

User Fees

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Revenues: Taxation Does your city have

a policy on levy limits? How are taxes used

to support projects? Is it tied to a debt

management policy?

▪ General property taxes▪ Tax Increment Financing▪ Utility tax replacement

excise taxes▪ Utility franchise tax▪ Pari-mutuel wager taxes▪ Gaming wager tax▪ Mobile home tax▪ Hotel/Motel tax▪ Local Option Sales tax

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Revenues (con’t)

▪ Use of Money & Property – Interest earnings– Rents & royalties

▪ Licenses and Permits– Building Permits– Business Licenses– Parade Permits

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Revenues: Intergovernmental

▪ Federal– Federal Aviation Agency– Community Development Block Grants– Federal Emergency Management Agency– Housing & Urban Development

▪ State– Road Use Tax (RUT)– Iowa Department of Transportation (IDOT)– Iowa Department of Natural Resources (DNR)

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Revenues: Intergovernmental (con’t)▪ Local

– County contributions– Library Service– Township contributions– Fire/EMT services

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Revenues: Charges for Services▪ Utilities/Business type or

Proprietary– Fees sufficient to be self-supporting– Advantages of User Charges– Limitations of User Charges

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Revenues (con’t)▪ Special Assessments ▪ Miscellaneous

– Contributions/Donations– Refunds– Sale of merchandise– Fines– Internal service Charges

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Revenues: Other Financing Sources▪ Sale of capital assets

▪ Proceeds of long-term debt

▪ Transfers In

▪ Internal TIF loans & Transfers in

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Expenditures and Other Financing Uses▪ Service Industry Delivery costs Not to make a

profit

▪ Public Safety

▪ Public Works

▪ Health & Social Services

▪ Culture & recreation

▪ Community & Econ Dev

▪ General Government

▪ Debt Service

▪ Capital Projects

▪ Business type activities15

Property taxes

contribute largely to cities’

General Fund

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Pick your battles!

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Preparing the Budget▪ Know the environment and current policies

▪ Know/choose the players/stakeholders

▪ Choose the budgeting type(s)

▪ Create the budgeting calendar

▪ Go for it!

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Know the environment and current policies▪ Political

▪ Economic– Projections from

Budget Bulletin

▪ Status of current budget and projects– Need adjustments?

▪ Personnel policies and union contracts

▪ Other contracts and external obligations

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Who are the players/stakeholders

“Stakeholder" refers to anyone affected by or has a stake in government :

▪ Citizens

▪ Customers

▪ Elected Officials

▪ Management

▪ Employees & Unions

▪ Businesses

▪ Other Governments

▪ Media

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Types of Budgeting Line Item Budgeting Incremental Budgeting Program Budgeting Performance Based Budgeting Program Planning Budgeting System Zero Based Budgeting Flexible Freeze Target Based Budgeting Priority Based Budgeting Program

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Capital Budgeting▪ Should there be a separate process?

▪ At what point is it blended into the Iowa budget

▪ What is required in Iowa for the Capital budget to be adopted?

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Debt Administration

▪ Cities should have policy– Manage levy/user fee rates– Manage burden on citizens (current and future)– Plans for continuous replacement or maintenance of

equipment and facilities

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Budget Calendar

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Fall• City Departments give

budget proposals to city finance officer

Early Winter

• Begin budget work sessions with city council

Budget Calendar

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Early February

• Council receives and adopts proposed budget and orders public hearing (10-20 rule)

Feb-Early

March

• DETAILED BUDGET: The detailed budget must be available for public inspection at least 10*days before the final budget hearing and 20* days before final date for certification, and is to be available at the clerk’s and mayor’s offices and the public library, or posted at three places designated by ordinance if there is no library.

Budget Calendar

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March 25

• Persons affected by the budget have 10 days after the date of certification to file a written protest

June 15

• IDOM certifies taxes back to county auditor

July 1 • Budget takes effect

Dubuque Budget Process

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June

• Department Manager 2- Day Review of Accomplishments & Future Initiatives

Aug • Annual City Council 2- Day Goal Setting

Dubuque Budget Process

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Sept –Oct

• Departments prepare 5-Year Capital Improvement project information and budget requests

Oct -Nov

• Departments prepare operating budget requests

Dubuque Budget Process

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Nov • Public Budget Input Meeting

Communication and involvement is an essential component of every aspect of the budget

process.

Dubuque Budget Process

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Mid-Nov

• Budget Policy Guidelines drafted & Approved by Council

Dubuque Budget Process

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Dec-Jan

• Analyze, review and balance CIP and Operating budget requests

Feb• Recommended

budget documents presented to City Council

Presenting the budget▪ What are budget

workshops?

▪ How do you use them?

▪ Presenting the budget in segments for incremental decisions– Outside agreements ▪ Fire and EMT▪ Library▪ Other Agencies

– Capital Improvement Plan– Categories▪ Wages & Benefits▪ Service Delivery▪ Supplies▪ Equipment/Capital

Layout

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Presenting the budget as a wholeVarious formats▪ State Forms▪ Council Books▪ Simple Graphs▪ Publications for Citizens’ groups▪ Publications for news releases

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Dubuque Budget Process

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Feb-March

• Six City Council Budget Public Input Meetings

Dubuque Budget Process

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March• Final public hearing

on the recommended budget

Group Exercise Facts

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Funding Available▪ $350,000 Local Option Sales Tax▪ $450,000 Road Use Tax▪ $400,000 General Funds▪ Every 1% Increase in Property Tax Levy Generates $234,000

Projects▪ $100,000 Replace street signs for reflectivity standards per Federal mandate▪ $200,000 Ambulance Replacement – high maintenance & repair costs on existing▪ $200,000 Turning lanes on main road - requested by many citizens – safety concern▪ $160,000 Signal replacement at main intersection – Old and failure likely ▪ $ 90,000 Police Mobile Data Computers for squad cars - Already 4 years old▪ $450,000 ADA curb ramps for street projects underway (mandated within 1 year after a

street has received a maintenance overlay)

Unexpected Increased Costs (Must Be Funded) $400,000 Increased Health Costs $300,000 Increased Pension Costs

Group Exercise Worksheet

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Performance Measures

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31%

21%

2%2%

7%3%2%

7%

2%4%

-2%1% 0%

0%16%

How Your City Share of Property Taxes Are Distributed

PoliceFireE911TransitPark DivisionRecreation DivisionCivic CenterLibraryAirportPublic WorksEngineeringFinancePurchase of ServicesDebtOther

Where Does the Money Come From?

$34,272,237

$23,753,813

$7,001,329 $45,850,292

$3,627,641

$24,624,630

$260,296 $9,575,110 Utilities

Federal Funds

State Funds

Local Taxes

G.O. Bonds

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Chart Examples: Levy History

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0%

20%

40%

60%

80%

100%

FY 11 FY 12 FY 13 FY 14

DebtFICA/IPERSLiabilityTransitGeneral

Engagement Improved

▪ Community Engagement Coordinator position approved in 2012

▪ Position filled July 2012

▪ Responsible for catalyzing resident participation in community & government

▪ Implementing a long-term community engagement plan

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City Life Pilot Project

▪ Free ten week program for 18 participants

▪ One-on-one & hands-on workshops with 19 Departments

▪ Discover department purpose, resources & services available & ways to engage with each department

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City Life Pilot Project

▪ Social interaction, personal connection & relationship building

▪ Sessions fun, interactive & meaningful to residents

▪ Educate citizens in a fun way on each department & how citizens can participate in City Government

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City Life Successes▪ 14 participants signed-up to establish an “alumni”

program

▪ 9 community orientated projects lead by participants

▪ Significant changes in pre and post participant perceptions

▪ City Life Volume II begins September 5th

▪ Budget Presentation was a favorite of participants

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City Life Commercial.mp4

MindMixer Pilot

▪ On-line platform designed to engage the community on public policy

▪ Supplement in-person meeting & plans activities

▪ Conduct instant polls

▪ Conduct a general survey of the public around an issue

▪ Created by former city planners

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Des Moines Citizen Engagement▪ Public meeting where citizens have the chance

to learn about services

▪ Citizen exercise to prioritize services

▪ Citizen satisfaction survey

▪ Quarterly newsletter to Citizens

▪ Social media & national publications

▪ Website – ask budget questions

▪ Channel 7 Des Moines

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Before we leave

▪ Using the Budget as a Management Tool– Monitoring– Amending– Planning/Timing

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Q & A

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Contact Information▪ Cindy Kendall

ISU Extension and Outreach/Iowa League of Cities

ckendall@iastate.edu

515-290-1811

▪ Jennifer Larson

Budget Director

City of Dubuque

Jlarson@cityofdubuque.org

563-589-4110

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