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PART FOUR 4
BUDGETING PRINCIPLES
The budget process is by its nature an exercise in conflict resolution and compromise. This is not bad. It reflects
the fact that all players involved – elected officials, managers, department heads, budget analysts, and citizens
– have a different perspective on the budget process. A natural tension exists between the desire to provide
services to citizens and the need to be fiscally prudent. As such, negotiation and compromise will always be
hallmarks of the budget process.23
The community’s long-term solvency is a key factor for the governing body to consider as it maps out a course
for the future. Sometimes the City Manager and the budget staff may have to interject a cautionary note in this
effort. For example, the desire to fund major improvements or new programs should be tempered by a realistic
assessment of future revenue growth. Similarly, one-time revenues or other windfalls should not be used to build
an operating budget that cannot be sustained over time.24
Maintaining an appropriate level of fund balance is also a priority of the City when developing budgets. City staff
consult with a professional financial advisor on the appropriate level of fund balance. The City has adopted fund
balance policies to ensure cash flow stability, to maintain or increase the City’s bond credit rating and to support
unpredictable revenue shortfalls. Use of fund balance to finance operations should be resisted unless the balance has
grown beyond an appropriate level. In this circumstance, fund balance usage should be matched with non-recurring
expenditures (capital projects, one-time expenses) and not be used to fund personnel or recurring expenditures.25
OPERATING BUDGET
The City’s annual operating budget process is a complex undertaking involving the entire government. The City
is required by its Charter to adopt a final budget by June 15.26
City Manager’s Recommended Budget
The City Manager submits a recommended operating budget to City Council on or before April 1st. The Manager’s
recommended budget includes a budget message explaining the proposed financial policies of the City for the
budget year and describing the important features of the budget plan. The Manager’s budget message also sets
forth the reasons for salient changes from the previous year in cost and revenue items and explains any major
changes in financial policy. For each line item, the Manager will also provide:
• Amounts appropriated and expended during the preceding fiscal year
• Current fiscal year’s appropriations
• An estimate of revenues for the upcoming fiscal year
• Proposed expenditures for the upcoming fiscal year and any increases or decreases proposed 27
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Charter Sec. 6.12 Should the council take no final action on or prior to such day, the budget, as submitted, shall be deemed to have been finally adopted by the council.
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