City of Rio VistaCity of Rio VistaBudget 101 An Overview of Essential ToolsBudget 101 An Overview of Essential Tools

CITIZENS OF RIO VISTA

CITY STAFFCITY COUNCIL

Role of the BudgetRole of the BudgetESSENTIAL ELEMENTSESSENTIAL ELEMENTS

SET PUBLIC POLICYSET PUBLIC POLICY

LEGISLATIVE CONTROLLEGISLATIVE CONTROL

SERVES AS A FINANCIAL TOOLSERVES AS A FINANCIAL TOOL

PurposePurpose of Budget Processof Budget Process• AccountabilityAccountability

• PlanningPlanning

• ImplementationImplementation

• EvaluationEvaluation

• InformationInformation

Fiscal AccountabilityFiscal Accountability

1.1. Adopted budget is the legitimate basis for Adopted budget is the legitimate basis for management to spend public funds to meet the management to spend public funds to meet the City’s operational objectives, using all City’s operational objectives, using all resources available and measuring whether the resources available and measuring whether the City can continue to meet those objectives in City can continue to meet those objectives in the foreseeable future.the foreseeable future.

2.2. In California, the Gann Limit calculation In California, the Gann Limit calculation limits the tax revenues a municipality can limits the tax revenues a municipality can appropriate. See Appendix A.appropriate. See Appendix A.

City’s responsibility that budget is in compliance with public decisions concerning raising and spending of public moneys

Operational AccountabilityOperational Accountability

1.1. Budget Integration with Financial ReportingBudget Integration with Financial Reporting

2.2. Governmental Accounting Requirements Governmental Accounting Requirements

City’s responsibility to report the extent to which it has met operating objectives efficiently and effectively, using the resources available for that purpose, and whether it can continue to meet its objectives for the foreseeable future.

PlanningPlanningThe budget process is used for planning, coordinating and The budget process is used for planning, coordinating and

scheduling programs to serve citizens and communityscheduling programs to serve citizens and community

1.1. Goals & ObjectivesGoals & Objectives

2.2. PreparationPreparation

3.3. AdoptionAdoption

PlanningPlanning Goals & ObjectivesGoals & Objectives

1.1. City-wideCity-wide

2.2. DepartmentDepartment

PlanningPlanning Budget PreparationBudget Preparation

1.1. Distribute CalendarDistribute Calendar2.2. Develop methods, assumptions, supportDevelop methods, assumptions, support3.3. Project department operating expendituresProject department operating expenditures4.4. Estimate revenuesEstimate revenues5.5. Project personnel costsProject personnel costs6.6. Develop cost allocation plan Develop cost allocation plan 7.7. Determine capital project needDetermine capital project need8.8. Prepare Preliminary BudgetPrepare Preliminary Budget9.9. Prepare Final BudgetPrepare Final Budget

AdoptionAdoptionrequired by June 30required by June 30

1.1. Budget WorkshopsBudget Workshops

2.2. Public HearingsPublic Hearings

3.3. Council ApprovalCouncil Approval

ImplementationImplementationAdoption of the budget by the City Council authorizes City management to Adoption of the budget by the City Council authorizes City management to

utilize the appropriated amounts for the purposes designated during the utilize the appropriated amounts for the purposes designated during the preparation process – this is the operational phase of fiscal periodpreparation process – this is the operational phase of fiscal period

1.1. Legislative authority to implement the budget Legislative authority to implement the budget during the fiscal year – operational phaseduring the fiscal year – operational phase

2.2. Budget policies are incorporated Budget policies are incorporated

EvaluationEvaluation

1.1. Management periodically monitors spending levels Management periodically monitors spending levels budgeted versus actual expendituresbudgeted versus actual expenditures

2.2. City Council reviews operational results at mid year City Council reviews operational results at mid year budget review and authorizes amendments where deemed budget review and authorizes amendments where deemed necessarynecessary

3.3. Financial reports for fiscal period ended are prepared and Financial reports for fiscal period ended are prepared and compared with budget compared with budget

In order for management to control operations within the In order for management to control operations within the approved budget levels, a monitoring system needs to be in placeapproved budget levels, a monitoring system needs to be in place

InformationInformationA useful, public document of relative importance to City Council, A useful, public document of relative importance to City Council,

management, citizens and other interested partiesmanagement, citizens and other interested parties

1. Public requests for information2. Management spending guide3. Provides basis for final year end comparisons