Budgeting in Minnesota

1. Budgeting in Minnesota A St. Cloud Perspective

2. City Manager/Administrator Key Players in Budgeting -Responsibility to present budget to City Council - What role do you play? Clarify with your manager - Details of budget  Finance - Meetings with departments – role varies

3. City Council Key Players in Budgeting -Approves preliminary and final levy - Does your city discuss budget with Council prior to beginning budget process? - Tax levy guidelines - Budget priorities

4. Community -TNT hearing required in December - Do you have forum for input earlier? Key Players in Budgeting

5. -Responsible to submit budget requests and to manage the budget the following year - Wants/needs always exceed funding - Do your budget instructions establish budget parameters for departments? Department Directors Key Players in Budgeting

6. Tax Base Growth (Decline) Critical Budget Elements

7. 2009-2011 Budget Deficit Measures Critical Budget Elements • - Determine City's Primary Outcomes • - Weighting of the Primary Outcomes, includes electedofficials and citizen involvement • - Grade services provided by all departments based upon Primary Outcomes • - Prioritization of Services by Primary Outcomes

8. Critical Budget Elements

9. Tax Base Growth (Decline) Critical Budget Elements • - Are your budget guidelines based on tax rates or on tax levy? • - How reliable is your tax base projection?

10. Salaries Critical Budget Elements • - Largest cost driver • - Contracts settled? Incorporate into budget • - If negotiations not settled – how do you account for this in your budget?

11. Health Insurance Critical Budget Elements • - Where do you get accurate estimated increase?

12. Local Government Aid Critical Budget Elements • - Payment from State of Minnesota to cities based on a “needs” formula to equalize property tax between cities • 2008 – 2011 LGA reductions due to State budget • 2014 New formula and additional funding into LGA • 2015 Inflationary

13. Levy Limits Critical Budget Elements • - Enacted by State Legislature at various times that cap the amount of levies authorized by municipalities • - Debt levies are exempted from limit calculations • - 2015 budget – No levy limits

14. Revenue Projections Critical Budget Elements • - Estimate for non-property tax, LGA revenue • - Generally not significant movement or impact on overall budget • - New fees, anticipated building projects, charges for services may be significant

15. End of May :Timed with end of State Legislative session – yes! • June Departments work on budget and performance measures • July City Administrator and Finance Director meet with departments • August 4-5 Council budget work sessions • September Preliminary levy adopted prior to September 30th • December Truth in taxation hearing • Prior to end of year Certify final budget and tax levy to county(ies) Budget Calendar – St. Cloud

16. How does St. Cloud attempt to keep City Council discussion on the “big picture” and not mired in minutia? • Council Budget Review Agenda: - Financial trend report • - Budget compliance with financial policies: Budget Fund Balance Debt Service • - Review of City goals • - Performance measures discussion City Council Meetings

17. - Budget/tax overview City Council Meetings • - Departmental budget review • - 4th and final meeting is on departments and only chance to get into the details

18. - Survival budgeting of recession • - Unraveling the short-term/unsustainable measures • - Use of fund balance?Rating agency criteria 2015 Budget Challenges

19. 2015 Budget Challenges What initiatives or strategies have you implemented to improve your budgeting process?

20. 2015 Budget Challenges Thank you.