Allen Dinkel, City Manager
The city, like other local governmental units, is in the process of developing the budget for 2024. Of course, this is an important process as it sets the amount of money the city will have to operate with for the coming year. Meanwhile it sets the amount of property taxes that will be assessed to property owners. Even though the governing body will now focus on the budget, it is not something that just “happens”.
I often say budgeting is a year-round process. For the past couple of months City staff have work to develop the budget they will need for the upcoming year. Since this is being done, six to nine months before the end of the present year, there is a bit of “guessing” that has to occur. Let’s take the cost of fuel.
At this time a year ago, the price of gasoline was quite a bit higher than it is now. Last year we used a $5 a gallon number for fuel, and so far, this year, fortunately the price is lower than a year ago. When we mentioned the $5 a year ago, there was some that felt that was still too low, but we compromised at the $5 mark. Even if something happens in the world and fuel prices rise, we should have enough money budgeted for this expense- and we all know the price of certain items is increasing greatly. We have to look into a “Crystal Ball” to make a prediction.
After each Department Head develops their budget they meet with Lindsay Miller, Finance Director, and me. We sit down and review each of the line items in that Department’s Budget. We focus on the “increases” from the current budget and try to figure out if an increase is warranted. We look at how much has been used in that line for this year, and also how much was spent each year of the past couple of years. Of course, that gives us some indication if there is a trend, and if there is, we try to see if we are meeting that trend.
Now yes, as we go through each line item, we sometimes make cuts in what has been requested because we feel the request was a bit “lofty” and there is room to cut back a bit in a line item. However, there are times, we feel the request is a bit low and we “up” the amount.
Now, I know some will say that the budgeted expenses should be cut, so taxes can be cut. Ok, I understand, but there are some items that can’t be cut.
We talked about fuel expenses above. Regardless is the price of gas is at $3, $4 or $5 a gallon, the number of gallons needed for the city each year really does not change. Police Officers still need to patrol streets and we all want fire trucks and ambulances to “roll” when we make the call for them. Vehicles and equipment still has to be purchased or repaired. During the “tougher” financial times the city had to stretch the life of vehicles and equipment because there was no money available to spend.
Yes, it cut the expenses, but there was a “Day of Reckoning” when the city did not have adequate equipment to get the job done. For items such as police cars and ambulances we try to now have a rotation in place and attempt to make purchases on an “every-so-many years or miles” basis. When it is time to “roll” we have to able to do so. Not always a perfect system, but a goal
We all know that since COVID-19, there are some items such as vehicles, they are difficult to get. It used to be that we looked for the lowest cost, but now “how soon can we get it” may be a factor on making a purchase or an expense. We have had trash trucks purchased that took more than a year to arrive so they could be used here. Just a part of the game. We also have to live within “Cash Basis” laws.
If the City Commission approves a purchase this year, but even though it does not arrive for a year or two, it still is a current year expense and there has to be adequate budget authority and cash available.
We have talked about line items in each budget. Even though we try to “get it right” there will be times when a line item does not have enough “dollars”. In that case we are okay as we then look at the total spending authority for the total department.
The city budget includes a number of funds. Funds such as street, police, dispatch, fire, ambulance, and parks are all funded in most part by “tax” dollars as they are “General Fund” expenditures. Even though we want each of those budgets to stand on their own, we do have the ability to look at the total for all of these, just on case something happens and one of those exceedswhat was budgeted. Of course, we don’t want that to occur, but “things happens” and we have to be prepared.
If there is one thing that we learned during the financial crisis was that in the General Fund Departments, the “bigger” expenses had to rotate between the departments on a given year. In other words, big purchases were moved around, and every department could not fill their “wish list” each year. This financial management skill is still used today.
As I said earlier budgeting is a year-round process. Each month expenses are looked at and we see if adjustments have to be made. Staff monitors expenses and determines if city financial practices are followed.