Breaking Down the Budget Process
By Village Manager Phil Kiraly
In looking back at my past blogs about the Village’s budget, I’ve usually used this outlet to give you budget highlights after deliberations had already begun. This year, I’m hoping to provide a more holistic budget process perspective from start to finish. So here we are: at the beginning. Looking forward to the coming months, we’re entering an on-going cycle of feedback gathering, prioritization, planning, calculations, forecasting, deliberations, and feedback gathering, prioritization, planning, calculations, forecasting, deliberations and…more feedback gathering.
The Village’s budget development process is perhaps the most important policy construction exercise that we go through each year and it’s an all hands-on-deck effort. Further complicating the process is that it never looks quite the same, a sentiment that couldn’t be more true this year for a few important reasons. First, we are transitioning to a new budgeting software. Second, we have to adjust numbers to account for a short fiscal year as we begin our transition to a calendar year fiscal year in 2021 to better align with how we collect revenues and expend funds (our next fiscal year will be called Stub Year 2020). Third, we have to accommodate other changes that we can’t control like increasing pension contribution costs and impacts of major changes at the State level, including new leadership, a new budget and new legislation that could have major implications locally (like pension reform, potential changes to property taxes, shifting markets that impact sales and use taxes, to name just a few.) Concurrently, the Village is also looking forward to incorporating your feedback from the 2019 Community Survey into budget considerations (you can still take the survey here), in addition to continuing to implement Strategic Plan initiatives and multiple capital and infrastructure improvement projects as planned in the 10-Year Community Improvement Program.
With so many moving parts, a clear and thoughtful process is needed to lead the Village toward a budget document that truly reflects the Village’s priorities for the coming fiscal year, while also playing the long-game of safeguarding the Village’s financial security into the future. Que our dedicated team in the Finance Department. Each year, the Finance Department guides the Board and staff through a multi-month budget development process (and they’re pretty good at it too as evidenced by the Village’s AAA bond rating and by having received a Distinguished Budget Presentation Award for 19 years). Here’s an overview of what that process will look like this year:
Late Summer through September:
- (Okay, forgive me—we’ve already started laying the budget development ground work…)
- Prepare the first round of year-end projections (…This is where staff estimates how actual expenditures will compare to the adopted budget) (COMPLETE)
- Prepare initial departmental and Strategic Plan budget requests and personnel reports (COMPLETE)
- Review updates to the Financial Forecast assumptions with the Finance Committee (…This is when we make an educated guess about which outside factors (e.g. the above-mentioned State changes) and other perceived scenarios may impact revenues and expenditures in the short-term) (COMPLETE)
- Compare the Village’s fee and fines to surrounding communities with the help of a survey (UNDERWAY)
- Discuss full five-year Financial Forecast with the Finance Committee (COMING NEXT WEEK)
- Prepare draft property tax levy information and updates to the 10-Year Community Improvement Program (CIP) requests and draft justifications for Stub Year 2020
- Integrate Finance Committee feedback into preliminary budget documents (…Check out the Fiscal Year 2020 Draft Budget to get an idea of what this looks like)
- Review Draft Stub Year 2020 Budget with the Board at November Budget Workshops (…This also includes a deep dive into the updates to the 10-Year CIP, any proposed fee and fine schedule changes and the draft property tax levy)
- Formally present the Stub Year 2020 Budget to the Board at the December Village Board meeting
- Ask the Board to consider the property tax levy ordinance
- We’re nearing the finish line!
- Ask the Board to consider a resolution adopting the Stub Year 2020 Budget (…Note that this may be delayed should major changes be needed, or should the Board members request more information various budget items)
- When the budget is passed (we are required by law to have a budget in place before the beginning of our next fiscal year), ask the Board to consider associated resolutions (e.g. adopting the new fee and fine schedule)
While the above steps are comprehensive, our residents and businesses community are also a significant part of our process. We encourage active feedback on budget considerations including Village’s services, Strategic Plan initiatives, capital projects or other Village business. As with all we do, we want to hear from you at any stage throughout the process! And again, we look forward to incorporating your feedback from the 2019 Community Survey into budget decisions. Please remember that my door is always open and every Finance Committee, Committee of the Whole and Village Board meeting has time allotted for public comment.
I hope you stay engaged throughout the process this year—check back to my blog for future updates on how the process is coming along. And Happy Budget Season!