City Budgeting BasicsMarch 5, 2020

• Budget Year– The City of Pocatello’s budget (fiscal) year begins on October 1 and ends on

September 30 of each year

• Budget Planning– Generally starts 6 months before the fiscal year begins

– Salary projections– Department meetings– Tax solution

City Budget Process

Financial CycleBudget Cycle• Appropriate Budget• Adopt Fees

Execute Fiscal Year• Monitor Budget Execution• Amend Budget

Report on Closed Fiscal Year• In Coordination with Audit

Funds• What is a Fund?

– An accounting entity with a self-balancing set of accounts– Can be thought of as its own checkbook

• Why do we use Funds?– Clarify how resources are being directed at various programs– Maintain tight control over resources– Designed to monitor resource inflows and outflows

Types of Funds• Governmental

– Tax-supported

• Proprietary– Business-type

• Fiduciary– Trustee

Governmental Funds• General Fund

• Special Revenue Funds

• Debt Service Funds

• Capital Projects Funds

Governmental Funds – General Fund• General operating fund

• Includes all government functions that aren't categorized under any other fund

Departments within the General Fund• Mayor/Council

• Finance

• City Hall (Custodial)

• Building

• Planning

• Engineering (including GIS)

• Human Resources

• Non-Departmental

• Economic Development

• Legal

• Police

• Fire

• Animal Services

• Parks

• Parks and Rec Admin

Governmental Funds – General FundAdministrative

9% City Hall1%

Building2% Planning

2%

Engineering4%

Non-Departmental5%

Police44%

Fire23%

Animal Services3%

Parks7%

Governmental Funds – Special Revenue• Created to report money reserved for specific purposes

• Funds include– Street– Recreation– Cemetery– Airport– Library– Transit– Environmental Science– CDBG

Governmental Funds – Special Revenue

Street36%

Recreation15%

Cemetery3%

Airport9%

Library9%

Transit17%

Env Science3% CDBG

8%

Governmental Funds – Debt Service• Keep track of funds used to pay governmental debt

– The City only has one Debt Service Fund– Used for the repayment of the Animal Shelter Bond

Governmental Funds – Capital Projects• Used in accounting for purchasing, building or renovating

equipment, structures and other capital assets

• Does not include capital assets or improvements paid for by proprietary funds

• Funds include– Federal Aid Projects Fund– Street Improvement Fund– Airport Improvement Fund– Capital Improvement Fund

Proprietary Funds• Enterprise Funds

• Internal Service Funds

Proprietary Funds – Enterprise• Provides goods or services to the public for a fee that makes the

entity self-supporting

• Funds include– Sanitation Fund– Water Fund– WPC Fund– Ambulance Fund

Proprietary Funds – Enterprise

Sanitation20%

Water38%

WPC34%

Ambulance8%

Proprietary Funds – Internal Service• Used to track goods or services shifted between departments on a

cost reimbursement basis• Funds include

– Liability Insurance Fund– Fleet Management Fund – Information Technology Fund – Utility Billing Fund– Employee Wellness Fund – Public Works Fund– Fuel Fund– Worker's Insurance Fund– Education Benefits Fund– Retirement Payout Fund

Capital Improvement Plan• Long term capital purchase/planning document

• Used to plan for the purchase and/or construction of large capital infrastructure, facilities, equipment, and other capital assets

Major Revenue Sources• Property Tax

• Sales Tax

• Building Permits

• State Liquor Tax

• Franchise Fees– Electric– Natural Gas– Cable

• Magistrate Court Fees

• Highway User Fees

• County Road & Bridge

• Cemetery Charges

• User Fees

Major Expenditures• Personnel

• Supplies

• Services

• Capital

• Debt Service

• Miscellaneous

Major Expenditures

Personnel53%

Supplies8%

Services17%

Capital17%

Debt Service4%

Miscellaneous1%

Balanced Budget• Appropriations should not exceed resources available to cover these

expenditures

• GFOA definition– Structurally balanced budget, which is described as a budget where recurring

revenues are sufficient to cover recurring expenditures

Available Fund Balance + Estimated Revenues = Funds Available for Appropriation

Reserve Policy• In Fiscal Year 2016 Council adopted a Reserve Policy

– 25% of next fiscal year’s expenditures– Excess reserves may only be used for one-time expenditures

• Policy used to determine if the Fund has excess reserves that can be used– Use of reserves can be accomplished in next budget cycle or with a budget

amendment

• To determine if the budgetary plan needs to rebuild the reserves

Questions?