BUDGET

Purpose

 

The purpose of the budget guide is to assist the public and City Commission in understanding the way the City budget is prepared, adopted, implemented and amended. It provides information about citizens’ rights to get involved in the budget process and shows how to exercise those rights. The budget guide also defines financial terms and provides an overview of the city’s financial goals.

 

 

What is a Budget?

The budget is one of the most important processes a City Commission engages in on a continuing basis. The budget is, first of all, a policy document and operations plan. It establishes the activities and projects that the City is going to pursue and provides a plan of organization for implementing those activities. Staffing and resource levels are set. The budget is also a financial plan. It identifies financial resources and ties those resources to specific activities. A comparison of prior years' activities is included. Finally, the budget serves as a communication device to the public about the planned activities of the City. The budget consists of the operating budget that identifies the necessary resources to complete the activities planned for the year, and projects that effect those decisions.

Budget Process

 

Preparation and implementation of the City's budget is a year-round process, although this process attracts the most attention during the summer just prior to establishing the City's mill levy rate for the following year. Although the City of Ottawa uses a single-year approach, some cities use a multi-year approach to budgeting. This enables cities to identify future effects of current decisions in a timely manner.

 

City budgets present actual figures for prior years, revised figures for the current year and budgeted figures for the next year. In arriving at next year's budget, City staff reviews prior expenditures and works to determine anticipated needs.

 

The City Manager and Finance Director meet with each Dept. Head who has already prepared an initial budget estimate based on the projected needs within their scope of responsibility. Each line item is discussed and adjusted to fit the next year's projections. The City Manager's approach in these meetings is to make certain there is adequate justification for increasing budget requests based on a detailed scope of work or specific need to purchase items. Similarly, there needs to be justification for maintaining an existing line item budget level if historically the funds have not been used. Finally, the City Manager reviews areas that may need more funding to fit the community's priorities based upon his or her perceptions, management experience, and especially City Commission priorities. The final budget

requests are submitted to the Commission, which may further refine items based on input from the public and community leaders, as well as formal budget hearings.

 

Throughout the year, interim financial reports are generated to monitor progress. Reports detailing budgetary performance by minor and major item are provided to Department Heads and City Manager. The City Commission may amend the budget at any time during the year by publishing a notice and holding a public hearing on the amendment. Amendments may be used to expend unanticipated revenues; however, taxes may not be increased by budget amendment

© 2019 CITY OF OTTAWA