Fort Walton Beach Council agenda — 09-08-2010 Special-1st Public Hearing FY 10/11 Budget — reading text

budget to City Council. The budget is considered balanced if the total of all available financial resources ( either on hand at the beginning of BUDGET DEPARTMENT MEETINGS the year y or generated g duringg he year) ear equals q or WORKSHOPS Aug Apr /May exceeds the total of all financial requirements. In order to accomplish this goal, a Budget Committee is formed CITY CITY Itik comprised of the City Manager, Finance Director, and COUNCIL REVIEW MANAGER REVIEW Budget & Grants Manager. The Committee conducts uAug n comprehensive meetings with Department Directors to review their budget requests and a collaborative effort is undertaken to achieve City Council and department goals within fiscal constraints. The Budget Committee enlists assistance for areas of specialized interests, such as the Information Technology Director for computer issues and the Administrative Services Director for personnel and risk management issues. Department objectives, accomplishments, and performance measures are also evaluated during budget development to determine the effectiveness of program activities and levels of appropriate funding. At the completion of departmental meetings, the Budget Committee meets to review the finalized budget requests and compare those requests against the Vision and Strategic Plans and fiscal limitations. Given revenue projections, economic conditions, and funding requirements, requests are ranked and funded depending upon program priorities and issues previously identified in the budget process. Once a balanced budget is achieved, it is presented to City Council for consideration. Revenue & Expenditure Assumptions Generally speaking, revenue assumptions are developed using a five -year historical summary, coupled with the current year -to -date amount annualized for the full year. Historical trends in revenues are analyzed and any major economic or legislative changes are also considered to achieve the most accurate revenue estimate possible. Revenue projections occur concurrently with departmental budget development and continue until the budget is adopted to ensure the amounts are based on the most current and all available information. Expenditure assumptions, like revenue assumptions, are developed using a five -year historical summary, coupled with current year -to -date amounts annualized for the full year. Current trends in expenditures are analyzed and new programs and projects are also considered to determine budget year estimates. City of Fort Walton Beach, FL Budget Overview Community Participation The City solicits input from its residents in the budget process. The City's newsletter, Beach Bits, publishes notices regarding the budget process. The Great Neighborhood Partnership Program also directly solicits input from the City's residents about the priorities and goals for their neighborhoods and the City and translates these needs into capital programs or services. Notices are likewise published on the City's website inviting public input. Additionally, there are two public hearings before final adoption of the budget. BUDGET SCHEDULE City Council Budget Review January 2010 FY 2010 -11 Budget Kick -Off The Mayor and City Council are responsible March 2010 Mid -Year FY 2009 -10 Budget Review for reviewing the proposed budget to ensure Develop 5 -Yr Revenue /Expense Projections it meets the goals and objectives of the City, conducting meetings on the budget to enlist May 2010 Draft Department Budgets Submitted public comment, and Revenues • Fee Schedule conducting public Personnel • Operating Expenses hearings prior to the final adoption of the Computers • Equipment/Vehicles budget. Capital Improvement Projects June 2010 Budget Policy Meeting In August, a budget meeting is held with the City Council to review and discuss the June 2010 City Manager and Director Budget Review proposed budget. The City Manager June 22, 2010 City Council Meeting —Set Proposed reviews major issues and Department Millage Rate for TRIM Notice Directors are present for the discussions July 2010 Final Department Budget Submission and study of the proposed budget. The Current Year Accomplishments meeting is open to the public and the public Budget Year Goals & Objectives Performance Measures is encouraged to attend and participate. During September, two public hearings on the millage ( i. e. property tax) rate and budget are held per State Statute before final budget consideration. These meetings are advertised as part: of the agenda and Florida Law requires certain newspaper advertisements prior to the second and final budget hearing. At the public hearings, the public may make formal comment either for or against the proposed budget and ask questions of City Council about the budget. Budget adoption occurs in September after City Council deliberations and two public hearings. City Council may take action to modify the proposed budget at its discretion. Prior to budget adoption, City Council must adopt a millage rate to support budgeted funding levels. An adopted budget is published no later than October 1. Budget Maintenance Budget maintenance is a year -round activity of the Department Directors, Finance Director, and Budget & Grants Manager. Spending control mechanisms include Finance Department review of purchase requisitions and departmental review of reports presenting budget versus actual revenues and expenditures. These financial reports are prepared and reviewed by staff monthly and provided to City Council quarterly to identify and communicate any spending variances. Performance measures are prepared and reported to Council quarterly to monitor progress against goals and objectives, citizen satisfaction, and benchmarks. Annual appropriations lapse at fiscal year end with the exception of encumbrances and appropriations related to multi -year projects and other items identified by City Council to be carried over to the next fiscal year. These carry -overs are included in the ensuing year's adopted budget. Budget Transfers Operationally, the City functions at a fund level basis allowing budget transfers within funds for individual line items that exceed the budgeted amount without a formal budget amendment. Budget transfers are used only to transfer appropriations between line items within a fund, not to increase the total budget or to transfer resources between funds. Budget transfers are permitted in accordance with Resolution 2008- 31. All budget transfers are performed in the City's accounting system by the Finance Department. City of Fort Walton Beach, FL Budget Overview Budget Amendment Per Florida Statute 166. 241, the adopted budget may be revised with a budget amendment approved by City Council in the same manner in which the budget was adopted. The resolution adopting the annual budget allows the budget to be amended by resolution provided that a corresponding funding source supports any additional expense. Transfers between funds and increases to a fund' s total budget are permitted by resolution adopted by City Council. Frequently, the budget is amended to record grants awarded to the City or other mid -year activities approved by City Council. The budget amendment increases or decreases the total amount of the adopted budget of each fund. BUDGET BASIS & FUND STRUCTURE An important concept in governmental accounting and budgeting is the division of the budget into categories called funds. Funds are separate fiscal accounting entities. Budgeting and accounting for revenues and expenditures in this manner is called fund accounting. Fund accounting allows a government to budget and account for revenues and expenditures restricted by law or policy. Governments may use any number of individual funds in their financial reporting; however, generally accepted accounting principles ( GAAP) require all these individual funds to be aggregated into specified fund types. Any fund constituting 10% or more of the appropriated budget is considered a " major" fund. There are basically three groups of funds in governmental accounting; governmental funds, proprietary funds, and fiduciary funds. Governmental Funds — include most governmental functions; fund types include general, special revenue, capital projects, debt service, and special assessment funds. Proprietary Funds — account for activities similar to those often found in the private sector; fund types include enterprise and internal service funds. Fiduciary Funds — account for assets held in a trustee capacity or as an agent for individuals, private organizations, governments, and other funds; fund types include trust and agency funds. Annual appropriated budgets are adopted by resolution for all governmental and proprietary funds. The City is not legally required to budget for proprietary or fiduciary funds and those budgets are not included in the City's audited financial statements. Budgets for the General Fund, Special Revenue Funds, Debt Service Fund, Capital Projects Fund, and Enterprise Funds are prepared on a basis consistent