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BUDGET
Sound financial management and budgeting are essential for the effective delivery of government services. A
government that shows it is thinking strategically, planning for the future, basing its spending decisions on citizen
input, and managing its financial resources wisely can develop and retain the confidence of its citizens.21
Council’s primary responsibility for budget development is to give general policy direction to the City Manager,
through the long range goals identified in its Strategic Plan.
PURPOSE OF A BUDGET
The primary purposes of a governmental budget are to account for and control the use of public resources and to
provide a legitimate process for the expenditure of public funds. However, budgeting is more than just a device
to authorize and control revenue raising and spending. It is the principal vehicle for setting fiscal and program
policy. Budgets are also used to:
• Establish priorities for the local government
• Plan for the rational distribution of resources
• Establish performance objectives and desired outcomes and relate them to expenditures
• Evaluate the performance of departments and programs
• Explain to citizens the types and levels of services funded with their tax dollars
• Ensure that funds are expended in a way that meets the planned budget objectives
The City prepares two types of budgets each year:
1. Operating Budget. Applies to the recurring or one-time activities that are financed through current
revenues. Major revenues estimated in the operating budget include general property taxes and other local
taxes and fees. Major expenditures include staff salaries and benefits, debt service, materials, and services
to support City services and facilities. By law, revenues and expenditures must be equal in the Annual
Operating Budget, commonly referred to as a balanced budget. The Operating Budget appropriates
funds for one fiscal year (July 1 – June 30) and appropriations cease on the last day of the fiscal year.
2. Capital Budget. Addresses long-term physical improvements that involve longer life spans, long-
range returns, and relatively high costs. Capital budgets typically appropriate funds through the life of
the project. The Capital Budget includes new construction or renovations to existing school buildings
and other city structures, major street, bridge, and sewer repair projects, and upgrades to existing park
facilities or new park structures.
These budgets are closely related, and each one contributes to the sound fiscal management of the community.22
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