1. Iowa’s City Budgeting System Patrick Callahan Snyder & Associates July 22, 2013

2. Timing is everything When is it all over? When is it all over? When does it start? When does it start? Does your City have a policy and procedure on budget preparation and monitoring? Does your City have a policy and procedure on budget preparation and monitoring? Calendar of events Calendar of events Example Example Let’s do it backwards first Let’s do it backwards first Schedule of Council Meetings Schedule of Council Meetings Availability of other people such as departments, boards, committees Availability of other people such as departments, boards, committees

3. The Time Table Count back from March 15 Count back from March 15 Copies available – 20 days prior to hearing Copies available – 20 days prior to hearing Public hearing Public hearing Start early –less stress Start early –less stress Consult department heads Consult department heads

4. Iowa League of Cities Iowa League of Cities Annual mailing to help with schedules and calculations Annual mailing to help with schedules and calculations Budget Training Sessions Budget Training Sessions Mentors Mentors Department of Management Department of Management Ted Nellesen (ted.nellesen@iowa.gov) Ted Nellesen (ted.nellesen@iowa.gov) Web Site Department of Management Web Site Department of Management DOM Information - website DOM Information - website

5. County Auditor Information Taxable valuations – calculate levies Taxable valuations – calculate levies Assessed valuations – G.O. Debt limit Assessed valuations – G.O. Debt limit TIF valuations and projections TIF valuations and projections (go to www.dom.state.ia.us) (go to www.dom.state.ia.us)

7. Line 2aLine 4a Line 3a Line 2B Line 3b

8. What is your process? City Administrator/Manager? City Administrator/Manager? Budget Committee Budget Committee Citizens Citizens Council Council Other taxing agencies Other taxing agencies County County Community School Community School Community College Community College Extension Offices Extension Offices Area schools Area schools State State Council – FINAL DECISION Council – FINAL DECISION

9. Who will put it all together That be you! That be you! Isn’t that in the small print? Isn’t that in the small print? Need a Quarterback Need a Quarterback City Council’s Goal Setting Session City Council’s Goal Setting Session

10. Capital Planning (more later) Does it tie to the Council’s goals Does it tie to the Council’s goals How far out? 5 years-10 years? How far out? 5 years-10 years? Funding sources Funding sources Cash on hand Cash on hand Local Option Sales Tax Local Option Sales Tax Bonds – G.O. and Revenue Bonds – G.O. and Revenue Enterprise Revenues Enterprise Revenues Gifts/Grants Gifts/Grants CIP Levy CIP Levy

11. Where does the other money come from? State Legislature State Legislature Authority for Property Taxes Authority for Property Taxes Revenue Sharing - RUT Revenue Sharing - RUT Grants Grants Elections – LOST & Hotel/Motel Elections – LOST & Hotel/Motel Special Assessments Special Assessments

12. Where does the money come from? (Cont) Federal government Federal government Revenue Sharing Revenue Sharing Grants Grants Local governments Local governments County County 911 Commissions 911 Commissions Fire districts Fire districts Others Others

13. Where does the money come from? (Cont) Our Citizens Our Citizens Licenses Licenses Permits Permits User Fees User Fees Swim Pool Swim Pool Golf course Golf course Recreation Fees Recreation Fees Franchise Fees Franchise Fees Fines Fines

14. User Fees - Utilities Water Water Sewer Sewer Storm Sewer Storm Sewer Electric & Gas Electric & Gas Garbage Garbage Cable TV/Internet Cable TV/Internet

15. Other Sources Gaming revenues Gaming revenues Refunds Refunds Interest on investments Interest on investments Rent or sale of property Rent or sale of property

16. Go to the source Budget Excel document Budget Excel document GREAT improvement over the years GREAT improvement over the years GREAT resource GREAT resource Let’s see--- Let’s see---

17. Line Item Budget-Workpapers Program – department or service Program – department or service List of expenditures List of expenditures Previous fiscal years Previous fiscal years Current budget year Current budget year Year-to-date numbers Year-to-date numbers Proposed budget Proposed budget Adopted budget Adopted budget

18. Where Does the Money go? The Nine Programs The Nine Programs State Budget Forms – Iowa DOM State Budget Forms – Iowa DOM (Partial List – Most common services) (Partial List – Most common services)

19. Public Safety Services Police/jail Police/jail Fire Fire Animal control Animal control Emergency management Emergency management Flood control Flood control

20. Public Works Services Streets and bridges Streets and bridges Parking Parking Street lights Street lights Traffic control Traffic control Snow removal Snow removal Street cleaning Street cleaning

21. Health & Social Services Health regulation inspection Health regulation inspection Water, air and mosquito control Water, air and mosquito control

22. Cultural & Recreation Library Library Museum, band and theatre Museum, band and theatre Parks Parks Recreation Recreation Cemetery Cemetery Community center Community center

23. Community & Economic Development Community beautification Community beautification Economic development Economic development Planning & Zoning Planning & Zoning

24. General Government Mayor, Council, and City managers Mayor, Council, and City managers Clerk, Treasurer and finance Clerk, Treasurer and finance Election Election Legal services Legal services City hall City hall Tort liability Tort liability

25. Debt Service Principal payments Principal payments Interest payments Interest payments Bond registrar fees Bond registrar fees

26. Capital Projects Construction/building projects Construction/building projects TIF capital projects (or as Special Revenue fund type) TIF capital projects (or as Special Revenue fund type) Capital Equipment (now allowed in this area as per GASB 54) Capital Equipment (now allowed in this area as per GASB 54)

27. Business Activities/Enterprises Water Water Sewer/wastewater Sewer/wastewater Landfill/garbage Landfill/garbage Cable TV/Internet Cable TV/Internet Storm sewer Storm sewer

28. The Types of Funds General General Special revenue- LOST, RUT, TIF, employee benefit levies Special revenue- LOST, RUT, TIF, employee benefit levies Debt service Debt service Capital projects Capital projects Permanent Permanent Enterprise Enterprise Non-budgeted funds (internal service) Non-budgeted funds (internal service)

29. Budget Form 631 E P1

30. Budget Form 631 E P2

31. Budget Form 631 A P1

32. Budget Form 631 A P2

33. Municipal Expenditures Personal services – salary & benefits & related expenses Personal services – salary & benefits & related expenses Services & commodities Services & commodities Capital outlay Capital outlay Debt payment & interest Debt payment & interest Transfers Transfers

34. The Budget Numbering System (City Clerk’s Handbook) Revenues –fund, function, type & source Revenues –fund, function, type & source Expenditures – fund, function & object Expenditures – fund, function & object

35. Sources of Information Estimating Expenditures Estimating Expenditures City department heads City department heads City staff & finance officer City staff & finance officer Previous fiscal year data Previous fiscal year data City audit reports City audit reports Iowa League of Cities –budget report Iowa League of Cities –budget report Utility Providers Utility Providers

36. More Sources of Information Estimating Expenditures (con’t) Estimating Expenditures (con’t) Insurance agents Insurance agents Vendors and suppliers Vendors and suppliers Consumer price index Consumer price index Existing contracts (union contracts, maintenance agreements, leases, township and other 28E agreements) Existing contracts (union contracts, maintenance agreements, leases, township and other 28E agreements)

37. Sources of Information Estimating Revenues Estimating Revenues County auditor –taxes & TIF County auditor –taxes & TIF Iowa League of Cities – budget report Iowa League of Cities – budget report City department heads City department heads City finance officer/treasurer City finance officer/treasurer Previous fiscal year Previous fiscal year

38. Budget Form 631 D

39. Budget Form 631 B

40. Property Tax Levies Regular – general fund levy: Regular – general fund levy: $8.10 limit Non-voted permissible levies Non-voted permissible levies Liability, property & self insurance Liability, property & self insurance Local Emergency Management Local Emergency Management

41. Property Tax Levies Voted permissible levies Voted permissible levies Public library support Public library support Bands, vocal Bands, vocal CIP Levy CIP Levy

42. Property Tax Levies (con’t) Ag Levy – $3.00375 Limit Ag Levy – $3.00375 Limit Special revenue levies Special revenue levies Emergency – (if at $8.10) Emergency – (if at $8.10) Police & fire retirement (411) Police & fire retirement (411) FICA & IPERS FICA & IPERS Employee benefits (as defined by Administrative Rules) Employee benefits (as defined by Administrative Rules)

43. Property Tax Levies (con’t) SSMID SSMID Debt service levy Debt service levy Capital project levy (voter approved) Capital project levy (voter approved)

44. Budget Form 635.1

45. Budget Form 635.1 (bottom)

46. Fund Balance Reminders Council Resolution Council Resolution Check audit reports Check audit reports Annual financial report Annual financial report

47. Budget Form FBW

49. The “Fine Art” of Balancing the Budget Reduce expenditures Reduce expenditures Increase revenues Increase revenues Spend down cash resources Spend down cash resources City staff recommendations City staff recommendations City Council – ranking City Council – ranking City Council – final decision City Council – final decision The appeal process - $8.10 The appeal process - $8.10 Watch calendar requirements for appeal Watch calendar requirements for appeal

50. The Public Hearing Process Budget forms completed Budget forms completed Prepare notice of public hearing & budget estimate Prepare notice of public hearing & budget estimate Publication 10/20 day rule Publication 10/20 day rule Copies available – 20 days prior to the hearing Copies available – 20 days prior to the hearing

51. Budget Form 631.1

52. Go to the handouts Two different handouts Two different handouts 1) A completed budget 1) A completed budget 2) Line item budget workpapers 2) Line item budget workpapers

53. Are we done yet? No No Now we need to make it understandable. Now we need to make it understandable. Graphs Graphs Summary of various items Summary of various items Newsletters Newsletters Public meetings Public meetings

54. What kinds of graphs? Category Graphs Category Graphs Personnel Personnel Supplies Supplies Capital Capital Debt Debt Historical Historical What does this year look like compared to prior year(s) What does this year look like compared to prior year(s)

55. Newsletters Introductory letter with major items Introductory letter with major items What projects will be included in the next year(s) What projects will be included in the next year(s) Any major changes in personnel, programs or facilities? Any major changes in personnel, programs or facilities?

56. Budget Form 635 2A

57. Finishing up Certification Resolution Certification Resolution E-filing to DOM E-filing to DOM Submission to GFOA? Submission to GFOA? Take a vacation you deserve it Take a vacation you deserve it

58. Finishing up Then monitor it all year long Then monitor it all year long Monthly reports to the Council Monthly reports to the Council Actual to budgeted Actual to budgeted Cycles for expenditures and revenues Cycles for expenditures and revenues The Budget Protest The Budget Protest

59. Budget is the backbone of City Finance It is the plan It is the plan It is the guide It is the guide It is the control It is the control And then there are amendments And then there are amendments

60. Budget Amendments PRIOR TO EXPENDITURE Changes Changes Weather Weather Priorities Priorities Personalities Personalities It is still the plan It is still the plan It is still the guide It is still the guide But it is the law! But it is the law! Due May 31 Due May 31

61. Resources & Training Iowa League of Cities- budget report Iowa League of Cities- budget report Iowa League of Cities – budget workshop Iowa League of Cities – budget workshop Iowa handbook for city clerks & finance officers –Chapters 7, 11 & 14 Iowa handbook for city clerks & finance officers –Chapters 7, 11 & 14

62. Resources & Training (con’t) Iowa policy leaders handbook- Chapter 6 Iowa policy leaders handbook- Chapter 6 Iowa Department of Management Web site Iowa Department of Management Web site City clerk’s – nearby communities and regional clerk’s meetings City clerk’s – nearby communities and regional clerk’s meetings

63. Now let’s do a workout!