2. PRESENTERS
Christina Day
Budget Manager
Portland Community College
christina.day1@pcc.edu
Tom Linhares
Executive Director
Multnomah County Tax
Supervising and Conservation
Commission
thomas.w.linhares@multco.us
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3. “You don’t get points for predicting
rain. You get points for building
the ark.”
- unknown
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4. OVERVIEW
Purpose of Budgeting
Budget Preparation
Budget Adoption Process
Life After Adoption
Common Mistakes
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5. PURPOSE OF BUDGETING
Foundation of every financial plan
Just like in your personal life, you budget
because you need to understand:
How much money you have;
Where it goes; and
Plan how to best allocate those funds, whether scarce
or plentiful.
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6. PURPOSE OF BUDGETING
Policy document
Formalizes:
Policies on spending
Reserve thresholds
Strategies to react to resource reductions
Defines program goals & objectives
Sets priorities
Discusses factors affecting jurisdiction’s financial
condition
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7. PURPOSE OF BUDGETING
Communications Device
Communicates your plans & priorities to the
public
Capital improvement plans
Operating priorities and/or changes
Grant applications and/or funded programs
Communicates challenges your organization
may face to the public, and plans to handle them
Changes in funding sources
GASB changes
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8. Operations Guide
Discloses how your jurisdiction functions – nuts &
bolts, i.e., organizational units & programs that
can include:
Organization chart
Position information and salaries
Performance measures
PURPOSE OF BUDGETING
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9. Benefits of having a budget:
Establishes agreement with the public and your
governing body on priorities for the year
Provides protection – like a contract with the public
if employees are spending according to the budget,
it’s been pre-authorized by public and governing body
Provides ways to revise if needed
Most Importantly – without it, your entity can’t
spend a dime after 7/1 or levy any property
taxes!
PURPOSE OF BUDGETING
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10. LEGAL BUDGET ENTITIES
ORS 294.311 (26) is the statute that designates
entities that need to apply local budget law.
Counties
Cities
Schools (K-12 and ESDS)
Community Colleges
Special districts
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11. LEGAL BUDGET ENTITIES
Check your requirements carefully, as local budget
law may not apply to the following Special Districts
in accordance with ORS 294.316
Diking & drainage
Health
Irrigation
Road
Soil conservation (no tax levies)
Water control
Public Utility District (no tax levies)
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12. LEGAL BUDGET ENTITIES
You also want to be familiar with other legal
requirements:
Charter
Purchasing – ORS Chapter 279
System Development Charges (SDC’s) – ORS
Chapter 223
Urban Renewal Agencies – ORS Chapter 457
Local Government Borrowing – ORS Chapter
287A
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13. BUDGET OFFICER
ORS 294.331 requires local government to have a
Budget Officer
Appointed; or
Designated by charter
Under the supervision of:
Executive officer, or
Governing body
Responsible for:
Preparing or supervising the preparation of the proposed
budget
Public notices of Budget Committee meetings
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14. BUDGET PROCESS
Develop a budget calendar –
Starting with the adoption of the budget (last
governing body meeting in June), back into a
calendar to help frame up the budget season
Plan for:
Budget Committee meetings
Governing Body meetings
Advertisements
Filing deadlines
Holidays/closures
Property tax measure elections
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15. BUDGET PROCESS
April 2011
S M T W T F S Apr. 01, 2011 Proposed Budget document is sent to Print Center for duplication and printing.
1 2 Apr. 07, 2011 BPAC Meeting
3 4 5 6 7 8 9 Apr. 07, 2011 Publish 2nd Notice of Budget Committee Meeting.
10 11 12 13 14 15 16 Apr. 11, 2011 Deliver the District President's Budget Message and a copy of the Proposed 2011-13
17 18 19 20 21 22 23 Biennium Budget to the Board.
24 25 26 27 28 29 30 Apr. 21, 2011 Board Meets as the Budget Committee: (Cascade) The Budget Committee to hold a meeting
on the Proposed 2011-13 Biennium Budget and to approve the budget. The
Budget Committee also approves the proposed property tax levies (2 years) for the biennium.
Apr. 26, 2011 Submit the approved Biennial Budget to TSCC
May 2011
S M T W T F S May 5, 2011 BPAC Meeting
1 2 3 4 5 6 7 May 10, 2011 Publish the approved 2011-13 Biennium Budget and the notice of the scheduled public
8 9 10 11 12 13 14 hearing with TSCC. (ED forms)
15 16 17 18 19 20 21 May 17, 2011 Staff to present the approved budget to TSCC. TSCC conducts a public hearing on the
22 23 24 25 26 27 28 budget, approves and certifies the budget (1:30 pm @ TSCC Office)
29 30 31 May 19, 2011 Board Meeting (Sylvania)
June 2011
S M T W T F S Jun. 01, 2011 President's all managers meeting:
1 2 3 4 Jun. 02, 2011 BPAC Meeting
5 6 7 8 9 10 11
12 13 14 15 16 17 18 Jun. 16, 2011 Board Meeting: (Southeast) Board approval of Resolution to adopt the 2011-13 Biennium
19 20 21 22 23 24 25 Budget and make appropriations. Board also approves a resolution to levy and categorize
26 27 28 29 30 property taxes for the 1st year and 2nd year of the biennium.
July 2011
S M T W T F S
1 2 Jul. 1, 2011 Adopted Budget document to print
3 4 5 6 7 8 9 Jul. 15, 2011 Deadline to file all Property Tax Levy Forms, Adopted Budget Resolution and Adopted
10 11 12 13 14 15 16 Budget Document with TSCC, County Assessors and the Oregon Dept. of Revenue.
17 18 19 20 21 22 23 Jul. 21, 2011 Board Meeting (Sylvania)
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16. BUDGET PHASES
Requested
Departments prepare their requested budget
Proposed
Budget Officer presents the proposed budget to the Budget
Committee
Approved
Budget Committee approves the proposed budget after
considering whether to make any changes
Adopted
Governing body adopts the approved budget, with limited
changes, no later than June 30
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17. BUDGET PROCESS
Requested Phase:
Departments begin developing budgets
Methods Used:
Zero-based– Start with zero in each line item
and justify every $
Trend-based – use historical actual data and
increase estimated expenditures by a %
Outcome-based – Set goals first, then budget to
meet goals or desired outcomes
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18. BUDGET PROCESS
Proposed Phase:
Entity’s budget compiled into 1 document
Management discussion
Once finalized, presented to Budget Committee
for consideration.
Number of meetings may vary by entity
Make available to public
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19. BUDGET COMMITTEE
Membership
Governing Body PLUS equal number of appointed
members (ORS 294.336)
Or whatever number of appointed members willing to
serve, if any
Quorum
Need a quorum in order to conduct a meeting or take
action; one more than half the number of
membership
If vacancy in appointed members: Total membership is
reduced when counting
If vacancy in elected members: Total membership is NOT
reduced when counting
To take action: Takes a majority of membership, not just
majority of those present
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20. BUDGET COMMITTEE
Role of the Budget Committee:
Review, consider changes, and approve
proposed budget
Provides for public input through open
meetings, advertisements, and citizen
membership
May review mid-year budget changes at
discretion of governing body
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21. BUDGET COMMITTEE
One Budget Committee meeting
Budget Officer presents budget message and Proposed Budget
Committee review & discussion of Proposed budget
Public comment accepted
Committee approves Proposed budget and property tax levies
Two (or more) Budget Committee meetings
Budget Officer presents budget message and Proposed Budget
Other tasks may take place at first meeting or subsequent
meetings
Public Notice must state which meeting for public comment
Committee approves Proposed budget and property tax levies
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22. BUDGET COMMITTEE
Local Budget Law allows for other meetings
during the year to:
Review the state of the organization
Receive financial updates
Example – PCC holds an early meeting to review the
Governor’s budget
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23. BUDGET PROCESS
Approved Phase
Already approved by Budget Committee
Limited authority to change budget at this point
Prior to adoption, expenditures in each fund can be
amended by no more than $5,000 or 10%, whichever
is greater (annual budget) – ORS 294.435
Total ad valorem property taxes cannot change
(except under ORS 294.437)
Will need to republish and hold new hearing if greater
changes needed.
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24. BUDGET PROCESS
Extra Step:
If within Multnomah County, TSCC acts for citizens –
ORS 294.411
Reviews Approved Budget for adherence to local budget
law
Holds hearing for public input for 200,000 + population
districts
TSCC Board asks questions on public’s behalf as well
All entities must consider and take appropriate action on
TSCC recommendations, orders, objections
Washington County – send report for publication on
website
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25. LOCAL BUDGET FORMS
Publish your budget prior to Public hearing for
Adoption:
Local governments (LB) and education districts (ED), and
now community college (CC)
Get details of changes in Budget 201 session
Within Multnomah County – only need to publish
summary if TSCC conducts public hearing
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26. LOCAL BUDGET FORMS
Use your own format, or use:
Special Fund LB-10
Reserve Fund LB-11
Resources LB-20
Expenditures Summary LB-30
Bonded Debt LB-35
Debt Service Supplement LB-36
Personal Services Summary LB-40
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27. BUDGET PROCESS
Adoption
Hold Public Hearing prior to Adoption for final
public input
Governing Body considers and adopts resolution
to appropriate funds and levy taxes.
Must be adopted PRIOR to July 1, so plan
accordingly!
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28. BUDGET PROCESS
After Adoption:
ORS 294.555
If taxes to be levied - must file with County assessors
office by 7/15
If not levying taxes – must file with ODR by 7/15
GFOA Distinguished Budget Award Program
File final document within 90 days of adoption
Distribute final documents to interested parties
(underwriters, banks, libraries, etc)
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29. LIFE AFTER ADOPTION
What if you need to make changes after
adoption?
Local Budget Law provides a way to revise
appropriations
294.450 – Resolution Transfers
294.480 – Supplemental Budget
No provision to change ad valorem taxes
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30. LIFE AFTER ADOPTION
ORS 294.450 Transfers of appropriation
authority
Causes no increase in total appropriations
Interfund transfers between appropriation categories
(from M&S to Personnel Services) or organizational
units or programs (from police to fire)
Transfers from Contingency of less than 15% of fund
appropriations
Between funds
Depends upon level of appropriation authority
Pass-through revenues
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31. LIFE AFTER ADOPTION
ORS 294.480 Supplemental budgets
For situations “not anticipated” during the
preparation of the budget
Create new appropriations to spend increased
resources
Transfer resources & appropriations from fund to
fund
Establish a new appropriation category within a
fund
Establish a new fund
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32. LIFE AFTER ADOPTION
Supplemental budget increasing expenditures by
10% or less:
Governing body may adopt at a regular meeting after
publishing a notice of the meeting (ORS 294.311(34))
Supplemental budget increasing expenditures by
more than 10%:
Governing body may only adopt after conducting a public
hearing; ORS 294.480(4)
Public Notice must include summary of changes
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33. LIFE AFTER ADOPTION
ORS 294.326 Exceptions to local budget law
Specific purpose grants
Proceeds of most bond issues
ORS 294.440 Education districts
emergencies
Funds from federal sources or ESD emergency
funds
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34. RESOURCES
Internal
If you are new to the organization or to budgeting – look
at the existing processes in place
You may want to follow existing “roadmap” to get an
understanding of the players and corporate culture
Meet with key personnel and ask for comments or
suggestions for the current processes
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35. RESOURCES
External
Fellow OMFOA and GFOA members
Other contacts met through networking
County Assessor (for property tax estimates, etc)
Department of Revenue
Annual training at various locations throughout the State
On-line manual
State statutes www.leg.state.or.us
http://egov.oreggon.gov/dor/ptd/localb.shtml
Multnomah County TSCC
Annual training
Property tax estimates
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37. MOST COMMON MISTAKE
Expenditures during the fiscal year or budget period
exceed authorized appropriations.
In 2009-10, six districts (out of 27) under TSCC’s jurisdiction
over-expended authorized appropriations.
Tips to avoid mistake:
Copy appropriation resolution and keep it prominently
displayed in your work space.
Run monthly reports to track actual revenues and expenses
compared to budget estimates.
React before expenditures exceed appropriation authority!
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38. FIRST MOST SERIOUS MISTAKE
General Obligation Bonds Debt Service Fund includes
fees (including refunding fees) and/or non-GO Bonds
debt service payments (such as PERS bonds).
ORS 287A.140 allows only GO Bonds principal and
interest to be paid out of the GO Debt Service Fund.
No Exceptions!
Tip to avoid mistake:
All other debt service should be paid out of General
Fund or a completely separate Debt Service Fund.
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39. SECOND MOST SERIOUS MISTAKE
Budget Committee Not Properly Setting Property
Tax Levies
Levies are not explicit in motion or clearly indicated in minutes.
Not clear how determined.
Based on amount to receive as resource in budget rather than
levy needed to raise that amount (either rate or dollar amount).
Tips to avoid mistake:
Double, then triple check calculations before presenting to the
Budget Committee.
Insist that the committee approve all rates just as they will appear
on LB/ED – 50.
Refer to DOR’s Local Budgeting Manual.
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40. PUBLICATION REQUIREMENTS
Budget Committee meeting notice not published
twice, 5 to 30 days prior to first meeting.
Notice of Budget Hearing / Financial Summary not
published 5 to 30 days prior to public hearing.
Tips to avoid mistake:
In Budget Calendar, don’t schedule notice for last
newspaper prior to deadline; schedule at least two
editions prior to meeting/public hearing.
Don’t schedule just one edition between 2 Budget
Committee meeting; schedule two.
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41. SUMMARY CHARTS
Summaries by Object and/or by Function do not
match total of fund by fund detail across all
four years.
Some large, multi-fund budgets include summary charts. If
the numbers in the summary do not match the fund detail
it could cause confusion as to what the correct numbers
are.
Tip to avoid the mistake:
Double check that the source for fund detail and the
summary charts is the same, especially for “Current Year”
where one could be using adopted and another amended
data.
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42. FORM LB / ED 50
Breakdown of General Obligation Bonds Debt Service
Levy by bonds approved before October 6, 2001
and those bonds approved after October 6, 2001.
The assessor needs this breakdown for certain urban
renewal calculations.
As more GO bonds are approved after that date, more
districts will have different amounts on lines 4a and 4b.
Tips to avoid mistake:
Remember, the distinction is when voters approved the bonds, not
when bonds were issued so many refunding bonds issued after
10/6/2001 are still counted on line 4a.
Always use worksheet on back of LB / ED 50.
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