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HomeMy WebLinkAbout10D Report Establishing Key Dates and Topics Related to the 2012 BudgetPR1p U tx1 \j 4646 Dakota Street SE Prior Lake, N N 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: MARCH 21, 2011 AGENDA #: 10D PREPARED BY: FRANK BOYLES, CITY MANAGE PRESENTER: FRANK BOYLES, CITY MANAGER AGENDA ITEM: CONSIDER APPROVAL OF A REPORT ESTABLISHING KEY DATES AND TOPICS RELATED TO THE PREPARATION OF THE 2012 BUDGET DISCUSSION: Introduction This agenda report is intended to be the basis for discussion at the March 21 work session and City Council meeting. The purpose of this agenda item is to propose a process which will encourage complete and comprehensive City Council discussion of all salient issues associated with preparing the 2012 Budgets and Capital Improvement Program. Hi story Last year's budget process began on February 1, 2010. It contemplated 12 work sessions on budget - related issues. My records do not confirm whether all scheduled sessions actually took place. The important point is that at the conclusion of the budget process not everyone was satisfied with the process. Therefore, the Finance Director and I have reviewed the process and propose revisions in an attempt to address all Council concerns. Current Circumstances At our February 22, 2011 work session, the City Council discussed the 2012 budget process. Since that meeting, various issues have arisen which suggest that further refinement of the process is needed so there is Council consensus before we undertake this effort. The process proposed for Council consider is the third page of this report. To integrate this narrative with the proposed process, we have numbered each step of both documents. In an effort to tie various aspects of the budget consideration process together, we propose the following: consolidate session topics, reduce the overall number of work sessions and, in various cases, lengthened work sessions. By providing for longer sessions it is our hope that the Council will be able to fully discuss and deliberate on each critical issue before moving on to the next. Consolidation of topics is intended to avoid some of the conceptual fragmentation that may have occurred last year as well. We also added some budget steps. Most notable is the identification of when financial information is available to staff and when it should be available to the City Council. (Step 1) This schedule would become an annual part of the process. This work session will also facilitate a discussion of circumstances that could have led or may lead to a surplus or deficit condition. (Step 1) Included in Steps 3 and 4 is the opportunity to factor in any amendments that were made to the 2030 Vision and Strategic Plan into the CIP and budget. A discussion of benchmarks is also provided at the same time the Council discusses the amended budget and again with the preliminary budget for the coming year. (Steps 4 and 7) Perhaps the single most important new step is the annual amendment of the current year's budget at about mid -year taking into account changes in the economy, revenues and expenditures to the extent possible. (Step 4) We believe that this step will provide a better "launching pad" for the coming year's budgeting process and help to mitigate against variances. ISSUES: There are two alternative approaches to the budget / CIP adoption process. The first approach is to schedule City Council review of each individual element of the budget and CIP first so that the component parts of each document could be considered one by one, much like building blocks. The other approach is to focus on the big picture first, i.e. levy and use of reserves to support the coming year's budget and CIP. We are recommending the second approach as it became clear that we would be unable to have elements such as the Facilities Management Plan, Technology Plan, Personnel Plan, and Parks Study done in time to provide for an orderly process using the first approach. This may be the approach the Council wishes to consider for the 2013 budget, however. It is expected that the 2030 Vision and Strategic Plan will be updated by June 6. These activities will be scheduled on non -City Council nights but an additional workshop may need to be added to completely integrate this process with the financial process if we are unable to complete this process by June 6. In terms of length of work sessions, the Council should weigh in on the proposed four 2- and -a- half -hour work sessions. If conducted as we have done in the past, this will mean that the Council meeting following these four meetings will begin at 7 p.m. rather than 6 p.m. There is also a four -hour consolidated workshop proposed on July 5. 1 do not anticipate that there would be a Council meeting that evening. FISCAL IMPACT: Collectively, the expenditures and revenues reflected in the budget and CIP constitute the greatest financial impact upon our residents. Therefore, the proposed process is to assure that adequate time is provided to the City Council to thoroughly deliberate both the budget and CIP so the final products reflect input by fully informed City Council members. ALTERNATIVES: 1. Review the proposed process and discuss the changes at the work session. 2. Provide staff direction regarding desired changes at the City Council meeting. RECOMMENDED Alternatives 1 and 2. MOTION: 2 2012 Budget Dates and Topics Discussion March 21, 2011 Step Date Hours Discussion Topics Adoption 1 Mon, 2.5 Comprehensive Financial Management Policy Apr 18 Apr 4 - Reserve Balances for: • General Fund • Water Fund • Sewer Fund Availability of Financial Information n/a 2 Mon, 1.5 Long Range Financial Planning n/a Apr 18 Use of Reserves • Maximum Levy 3 Mon, 2.5 Draft CIP: Aug 15 Jun 6 Transportation Plan • Water Operating Plan • Sewer Operating Plan • Equipment Replacement Plan • Park Equipment Replacement Plan • 2030 Vision and Strategic Plan Does NOT include Facilities Management Plan or Technology Plan 4 Mon, 2.5 Benchmark Discussion n/a Jun 20 Amended 2011 Budget Jul 5 • 2030 Vision and Strategic Plan 5 Tues, 4 Facilities Management Plan Aug 15 Jul 5 ** Technology Plan Aug 15 Personnel Services Plan Aug 15 ** No City Council meeting this evening. 6 Mon 2.5 Park Analysis Aug 15 Aug 1 7 Mon 1.5 Preliminary 2012 Budget with additional Sept 6 Aug 15 benchmark presentation