1. Iowa’s City Budgeting System FN 401 MPI Patrick Callahan Callahan Municipal Consultants, LLC July 27, 2015 8:00AM

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 council members, department heads, and board members Availability of other people such as council members, department heads, and board members

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 Publications Annual Publications 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 (afternoon session) 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

11. City Council Role Early Contacts – Set Parameters Early Contacts – Set Parameters Goal Setting Session Goal Setting Session Committee of the Whole Committee of the Whole Ranking Process Ranking Process Final Approval Final Approval

12. Citizen Input – Not Easy Ask before budget is proposed Ask before budget is proposed Invite public to meeting Invite public to meeting Presentations to groups Presentations to groups Use the media Use the media

13. 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 – Sales Tax & Hotel/Motel Elections – Sales Tax & Hotel/Motel Special Assessments Special Assessments

14. 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

15. 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

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

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

18. Go to the source Budget Excel document Budget Excel document GREAT improvement over the years GREAT improvement over the years GREAT resource GREAT resource Iowa DOM Website Iowa DOM Website

19. 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

20. 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)

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

22. 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

23. Health & Social Services Health regulation inspection Health regulation inspection Water and air control Water and air control Mosquito control Mosquito control

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

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

26. General Government Mayor, Council, and City Manager Mayor, Council, and City Manager Clerk, Treasurer and Finance Clerk, Treasurer and Finance Election Election Legal services Legal services City hall City hall Tort liability Tort liability

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

29. 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)

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

31. 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)

32. Budget Form Tips Do in correct order Do in correct order Print & copy – 11”x17” sheet Print & copy – 11”x17” sheet Complete & balance on paper Complete & balance on paper Click on “save” often Click on “save” often

33. Fund Balance Worksheet

34. Budget Form 631 E P1

35. Budget Form 631 E P2

36. Budget Form 631 A P1

37. Budget Form 631 A P2

38. 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

39. 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

40. 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

41. 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

42. More Sources of Information Estimating Expenditures (con’t) Estimating Expenditures (con’t) Existing contracts Existing contracts Union agreements Union agreements Maintenance contracts Maintenance contracts Lease agreements Lease agreements 28E agreements 28E agreements

43. 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

44. Budget Form 631 D Form 631.D CITY OF Department of Management RE-ESTIMATED REVENUES DETAIL RE-ESTIMATED Fiscal Year Ending2015 Fiscal Years TIF SPECIAL DEBTCAPITAL RE-ESTIMATEDACTUAL GENERALREVENUES SERVICEPROJECTSPERMANENTPROPRIETARY20152014 (A) (B)(C)(D)(E)(F)(G)(H)(I)(J)(K) REVENUES & OTHER FINANCING SOURCES Taxes Levied on Property 1 0 00 Less: Uncollected Property Taxes - Levy Year2 00 Net Current Property Taxes (line 1 minus line 2)300 00 00 Delinquent Property Taxes 4 00 TIF Revenues 5 00 Other City Taxes: Utility Tax Replacement Excise Taxes6 00 Utility francise tax (Iowa Code Chapter 364.2) 7 00 Parimutuel wager tax 8 00 Gaming wager tax 9 00 Mobile Home Taxes 10 00 Hotel/Motel Taxes11 00 Other Local Option Taxes 12 00 Subtotal - Other City Taxes (lines 6 thru 12)1300 00 00 Licenses & Permits 14 00 Use of Money & Property 15 00 Intergovernmental: Federal Grants & Reimbursements16 00 Road Use Taxes 17 00 Other State Grants & Reimbursements18 00 Local Grants & Reimbursements19 00 Subtotal - Intergovernmental (lines 16 thru 19)2000000 000 Charges for Fees & Service: Water Utility 21 00 Sewer Utility 22 00 Electric Utility 23 00 Gas Utility 24 00 Parking 25 00 Airport 26 00 Landfill/Garbage 27 00 Hospital 28 00 Transit 29 00 Cable TV, Internet & Telephone30 00 Housing Authority 31 00 Storm Water Utility 32 00 Other Fees & Charges for Service33 00 Subtotal - Charges for Service (lines 21 thru 33)3400 000000 Special Assessments 35 00 Miscellaneous 36 00 Other Financing Sources: Regular Operating Transfers In37 00 Internal TIF Loan Transfers In38 00 Subtotal ALL Operating Transfers In39000000000 Proceeds of Debt (Excluding TIF Internal Borrowing)40 00 Proceeds of Capital Asset Sales41 00 Subtotal-Other Financing Sources (lines 36 thru 38) 42000000000 Total Revenues except for beginning fund balance (lines 3, 4, 5, 12, 13, 14, 19, 33, 34, 35, & 39)43000000000 Beginning Fund Balance July 1 44000000000 TOTAL REVENUES & BEGIN BALANCE (lines 41+42) 45000000000

45. Budget Form 631 B

46. Property Tax Systems County Assessor – Valuations County Assessor – Valuations State Rollback State Rollback Taxable Valuations Taxable Valuations

48. Property Tax Systems County Auditor – Role County Auditor – Role Tax Levies – City, School, and County Tax Levies – City, School, and County Value x Levy = Tax Dollars Value x Levy = Tax Dollars Levy – Per $1,000 of Value Levy – Per $1,000 of Value

49. 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

50. Emergency Management Commission Form EMC CITY OF As provided in Iowa Code Section 384.12, subsection 22, a city may levy the amount necessary in support of a local Emergency Management Commission. In addition to this individual levy, Emergency Management Commission support may also be included as part of the General Fund Levy. Iowa Code Section 29C.17, subsection 5 states that any support from cities or counties must be separately reported on tax statements issued by the county treasurer. Input the amount of General Fund Levy request to be used for support of an Emergency Management Commission. The total below will reflect the total amount of Emergency Management Commission support provided by the City. Request withProperty Taxes Utility ReplacementLevied (A)(B) 1 Portion of General Fund Levy Used for Emerg. Mgmt. Comm. 00 2 Support of a Local Emerg.Mgmt.Comm.0 0 3 TOTAL FOR FISCAL YEAR 2014 00

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

52. 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)

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

54. Budget Form 635.1

55. Budget Form 635.1 (bottom)

56. Commercial Property Taxes New State Rollback New State Rollback State Backfill Plan State Backfill Plan New Budget Form New Budget Form Long Term Impact Long Term Impact

57. Fund Balance Worksheet Form FBW Department of Management Fund Balance Worksheet for City of TIF Total Grand GeneralSpecial Rev Debt ServCapt ProjPermanentGovernmentProprietaryTotal (1) ( A )( B )( C )( D )( E )( G )( H )( I )( J ) *Annual Report FY 2014 Beginning Fund Balance July 1 (pg 5, line 134) *1 000000000 Actual Revenues Except Beg Bal (pg 5, line 132) *2 000000000 Actual Expenditures Except End Bal (pg 12, line 259) *3 000000000 Ending Fund Balance June 30 (pg 12, line 261) *4 000000000 (2) GeneralSpec Rev TIF Special RevDebt ServCapt ProjPermanentTot GovtProprietaryGrand Total ** Re-Estimated FY2015 Beginning Fund Balance 5 000000000 Re-Est Revenues 6 000000000 Re-Est Expenditures 7 000000000 Ending Fund Balance 8 000000000 (3) GeneralSpec Rev TIF Special RevDebt ServCapt ProjPermanentTot GovtProprietaryGrand Total ** Budget FY2016 Beginning Fund Balance 9 000000000 Revenues 10 000000000 Expenditures 11 000000000 Ending Fund Balance 12 000000000 * The figures in section (1) are taken from FORM F-66(IA-2) STATE OF IOWA FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30,2014 ** The remaining two sections are filled in by the software once ALL worksheets are completed. IF THE CITY HAS AN ACTIVE TIF, enter the Beginning Fund Balance for the TIF Special Revenue Fund for the ACTUAL YEAR. AN ACTIVE TIF IS ONE FOR WHICH YOU ARE CERTIFYING DEBT TO THE COUNTY AUDITOR AND RECEIVING ANNUAL TIF REVENUES IF GENERATED.

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

59. Budget Form FBW Form FBW Department of Management Fund Balance Worksheet for City of TIF Total Grand GeneralSpecial Rev Debt ServCapt ProjPermanentGovernmentProprietaryTotal (1) ( A )( B )( C )( D )( E )( G )( H )( I )( J ) *Annual Report FY 2014 Beginning Fund Balance July 1 (pg 5, line 134) *1 000000000 Actual Revenues Except Beg Bal (pg 5, line 132) *2 000000000 Actual Expenditures Except End Bal (pg 12, line 259) *3 000000000 Ending Fund Balance June 30 (pg 12, line 261) *4 000000000 (2) GeneralSpec Rev TIF Special RevDebt ServCapt ProjPermanentTot GovtProprietaryGrand Total ** Re-Estimated FY2015 Beginning Fund Balance 5 000000000 Re-Est Revenues 6 000000000 Re-Est Expenditures 7 000000000 Ending Fund Balance 8 000000000 (3) GeneralSpec Rev TIF Special RevDebt ServCapt ProjPermanentTot GovtProprietaryGrand Total ** Budget FY2016 Beginning Fund Balance 9 000000000 Revenues 10 000000000 Expenditures 11 000000000 Ending Fund Balance 12 000000000 * The figures in section (1) are taken from FORM F-66(IA-2) STATE OF IOWA FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30,2014 ** The remaining two sections are filled in by the software once ALL worksheets are completed. IF THE CITY HAS AN ACTIVE TIF, enter the Beginning Fund Balance for the TIF Special Revenue Fund for the ACTUAL YEAR. AN ACTIVE TIF IS ONE FOR WHICH YOU ARE CERTIFYING DEBT TO THE COUNTY AUDITOR AND RECEIVING ANNUAL TIF REVENUES IF GENERATED.

60. 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

61. The “Fine Art” of Balancing the Budget 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

62. 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

63. Budget Form 631.1 Form 631.1Department of Management NOTICE OF PUBLIC HEARING BUDGET ESTIMATE THE CITY NAME IS ENTERED ON THE CERT PAGE City of, Iowa The City Council will conduct a public hearing on the proposed Budget at on at (Date) xx/xx/xx(hour) The Budget Estimate Summary of proposed receipts and expenditures is shown below. Copies of the the detailed proposed Budget may be obtained or viewed at the offices of the Mayor, City Clerk, and at the Library. The estimated Total tax levy rate per $1000 valuation on regular property.......... $0 The estimated tax levy rate per $1000 valuation on Agricultural land is........... $0 At the public hearing, any resident or taxpayer may present objections to, or arguments in favor of, any part of the proposed budget. <==== phone numberCity Clerk/Finance Officer's NAME TYPE THE NAME ABOVE. A SIGNATURE IS NOT NECESSARY. Budget FYRe-estimated FYActual FY 201620152014 (a)(b) (c) Revenues & Other Financing Sources Taxes Levied on Property 1000 Less: Uncollected Property Taxes-Levy Year 2000 Net Current Property Taxes 3000 Delinquent Property Taxes 4000 TIF Revenues 5000 Other City Taxes 6000 Licenses & Permits 7000 Use of Money and Property 8000 Intergovernmental 9000 Charges for Fees & Service 10000 Special Assessments 11000 Miscellaneous 12000 Other Financing Sources 13000 Transfers In 14000 Total Revenues and Other Sources 15000 Expenditures & Other Financing Uses Public Safety 16000 Public Works 17000 Health and Social Services 18000 Culture and Recreation 19000 Community and Economic Development 20000 General Government 21000 Debt Service 22000 Capital Projects 23000 Total Government Activities Expenditures 24000 Business Type / Enterprises 25000 Total ALL Expenditures 26000 Transfers Out 27000 Total ALL Expenditures/Transfers Out 28000 Excess Revenues & Other Sources Over (Under) Expenditures/Transfers Out 29000 Beginning Fund Balance July 1 30000 Ending Fund Balance June 30 31000

64. 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

65. Are we done yet? - No Budget Message Budget Message Now we need to make it understandable. Now we need to make it understandable.

66. Are we done yet? - No Graphs Graphs Summary of various items Summary of various items Newsletters Newsletters Public meetings Public meetings New Iowa DOT Website New Iowa DOT Website

68. 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)

69. 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?

70. Budget Form 635 2A Form 635.2A CITY OF Department of Management ADOPTED BUDGET SUMMARY YEAR ENDED JUNE 30, 2016Fiscal Years TIF SPECIAL DEBTCAPITAL BUDGETRE-ESTIMATEDACTUAL GENERALREVENUES SERVICEPROJECTSPERMANENTPROPRIETARY201620152014 (A)(B)(C)(D)(E)(F)(G)(H)(I)(J)(K)(L) Revenues & Other Financing Sources Taxes Levied on Property 100 00 000 Less: Uncollected Property Taxes-Levy Year 200 00 000 Net Current Property Taxes 300 00 000 Delinquent Property Taxes 400 00 000 TIF Revenues 5 0 000 Other City Taxes 600 00 000 Licenses & Permits 700 0000 Use of Money and Property 80000000000 Intergovernmental 900000 0000 Charges for Fees & Service 1000 0000000 Special Assessments 1100 00 0000 Miscellaneous 1200 0000000 Sub-Total Revenues 130000000000 Other Financing Sources: Total Transfers In 140000000000 Proceeds of Debt 1500000 0000 Proceeds of Capital Asset Sales 160000000000 Total Revenues and Other Sources 170000000000 Expenditures & Other Financing Uses Public Safety 18000 0000 Public Works 19000 0000 Health and Social Services 20000 0000 Culture and Recreation 21000 0000 Community and Economic Development 22000 0000 General Government 23000 0000 Debt Service 240000 0 000 Capital Projects 25000 00 000 Total Government Activities Expenditures 26000000 000 Business Type Proprietray: Enterprise & ISF 27 0000 Total Gov & Bus Type Expenditures 280000000000 Total Transfers Out 290000000000 Total ALL Expenditures/Fund Transfers Out 300000000000 Excess Revenues & Other Sources Over 31 (Under) Expenditures/Transfers Out 320000000000 Beginning Fund Balance July 1 330000000000 Ending Fund Balance June 30 340000000000

71. 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

72. 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

73. 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

74. Budget Amendments PRIOR TO EXPENDITURE Changes Changes Weather Weather Priorities Priorities Personalities Personalities But it is the law! But it is the law! Due May 31 Due May 31

75. Need For Amendments Expenditures due to grants Expenditures due to grants Expenses – natural disasters Expenses – natural disasters Sudden increase – fuel, supplies, utilities Sudden increase – fuel, supplies, utilities Unforeseen expenses - lawsuit Unforeseen expenses - lawsuit

76. Budget Amendment Process – Same Steps Do the calculations & projections Do the calculations & projections Error on “high side” Error on “high side” Public Notice Public Notice Public Hearing Public Hearing Council Resolution Council Resolution

77. 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

78. 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

79. Questions? Patrick Callahan 563-599-3708