“They Cut WHAT?” How Local Government Budgets

Affect You

Paul BonniciNC Civic Education Consortium

Budgeting 101

1. Legal/fiduciary2. Planning3. Policy4. Performance

What the law requires

• Pass a budget ordinance by July 1st

• Adopt a balanced budget• Budget decisions must be made in

open meetings• Budget is adopted by simple

majority vote.

Actors in the budget process

1. Elected board2. City manager3. Finance / budget director4. Human resources director5. Department heads6. Advisory boards7. Citizens8. News media

Elected officials’ roles

• Uphold legal responsibilities

• Think strategically and long term

• Set priorities• Involve others• Ensure

accountability

Instructions1. Make decisions as a board2. Select a mayor and a clerk3. Green chips represent budget cuts4. Red chips are revenues and reserves 5. Reserves not part of total budget, but

can be used to balance budget6. All chips = $1 million

Service areas Proposed budget

Police $12 million

Fire $8 million

Solid waste $6 million

Streets $6 million

Recreation $4 million

Housing $3 million

Planning $3 million

Capital $6 million

Debt service $2 million

Select Community Values

List of community values

1. Full employment2. Safe and secure community3. Clean and green environment4. Physically & culturally engaged citizens5. Affordable and safe housing

Community values (cont.)

6. Livable and well maintained neighborhoods

7. Fiscally conservative finances8. Well maintained streets9. Nurturing and family friendly city10. Infrastructure to support growth

Instructions

1. Review the 10 community value cards as a governing board

2. Select 5 community values to help guide your decision making

3. Place the 5 community values cards on the board

4. Clerk brings list to front table

Community values: debrief

1. What criteria did you use to select your values?

2. What would you say about the way your board made the decisions?

3. What is the importance of the board setting community values?

4. What kind of community are you creating?

Budget Scenario

The city finance director forecasts a $3 million reduction in revenues.

Instructions

1. As a board, make decisions to rebalance your budget

2. Options: cut programs/services; spend reserves; or raise fees/taxes

3. When finished, clerk will bring the decisions to the front table

4. Move chips as appropriate

Debrief

1. How did you balance the budget?2. What criteria did you use?3. What are the short and long term

consequences of your decisions?4. How are community values maintained?5. How would you describe your board’s

dynamics?

Another tough decision

Your manager informs you the city needs an additional $2 million to fund retirement and health care increases

Debrief

1. How did you balance the budget?2. What criteria did you use?3. What are the short and long term

consequences of your decisions?4. How are community values maintained?5. How would you describe the board’s

dynamics?

Will it never end?

A new federal mandate requires the city to make a $4 million investment to address new storm water regulations

Debrief

1. How did you balance the budget?2. What criteria did you use?3. What are the short and long term

consequences of your decisions?4. How are community values maintained?5. How would you describe the board’s

dynamics?

Good news! Updated revenue

estimates show an additional $2 million.

Debrief

1. Where did you allocate the new revenue?2. What criteria did you use to make your

decisions?3. What are the short and long term consequences

of your decisions?4. How are community values maintained?5. How would you describe the board’s dynamics?

Time to vote

Can you vote for this budget?

Final budget debrief

1. How did you use the community values to make decisions?

2. Are you happy with the board’s decision? Will you be able to support these choices?

3. What would the media report about your budget?

Workshop wrap up

1. What was the single most important lesson learned?

2. What was your “ah-hah” moment?3. What will you take home from

today?