Board Budgeting Basics. New Clerk Academy May 22, 2017

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1 New Clerk Academy May 22, 2017

2 Honorable Brent Thurmond, CPA, Wakulla County Clerk of the Circuit Court and Comptroller Michael Tomich, CPA, Marion County Budget Director for the Office of the Honorable David Ellspermann, Marion Co. Clerk of the Circuit Court and Comptroller

3 Budgeting Overview What is Budgeting? Importance of Budgeting in governments The budget is a plan of financial operation Budgets can serve as a policy making tool, a management tool, a financial tool, and a communication tool, other words, a multipurpose tool. The end result should be an enhanced transparency

4 The Clerk s Role in the Budget Comptroller Budget Officer Office of Management and Budget Board Clerk

5 The Clerk s Role in the Budget County budget officer. (1) Each board of county commissioners may designate a county budget officer to carry out the duties set forth in this chapter. Unless the board designates a different officer, the clerk of the circuit court or the county comptroller, if applicable, shall be the budget officer for the purposes of this chapter. So as Clerk, you are the Budget Officer If the Board wants you to be

6 Budgeting Overview A brief description of the budget cycle is as follows: Elected and appointed officials gather information from citizens, taxpayers and other sources about financial and non-financial priorities. Officials meet with staff and convey the goals, objectives, priorities, and concerns that will guide the development of the budget.

7 Budgeting Overview Preparation Revenues are estimated to determine what financial resources will be available to fund operations. Expenditure requests and forecasts are prepared by the Departments. The Budget Officer submits a proposed budget that reflects the community needs and desires to the local government governing body for review.

8 Budgeting Overview Adoption The Board reviews the proposed budget. Changes are made according to the Board s recommendations and public comments. The proposed budget is approved by the Board. The budget is adopted.

9 Budgeting Overview Implementation Revenues are collected and expenditures are incurred in accordance with the budget. The budget may be modified or amended by approval from the Board in accordance with procedures established by State law. Evaluation Internal reports may be prepared as needed for financial data, as well as for performance measurement. Other evaluation is done through internal audits, performance audits, and external audits.

10 Budget Requirements Section , F.S. (Counties) provide specific requirements for local governments to follow when adopting annual budgets. Some of those requirements are as follows: The local government s budget must be adopted by resolution or ordinance, unless otherwise specified in the local government s charter. The amount available from taxation and other sources, including amounts carried over from prior fiscal years, must equal the total appropriations for expenditures and reserves. The adopted budget may be amended at any time during the fiscal year or within 60 days following the end of the fiscal year. If the amendment increases the total amount of expenditures by fund or department, the budget amendment must be adopted in the same manner as the original budget, unless specified in the local government s charter. Counties are required to follow specific advertising requirements (s , F.S.) with respect to the adoption of budget amendments.

11 Budget Requirements Chapter 200, F.S. and the Truth in Millage (TRIM) guidelines promulgated by the Florida Department of Revenue outline specific requirements that local governments must follow with respect to adopting property tax rates and budgets. Some of the key requirements are as follows: Specific timetables with respect to the noticing of the local Property Appraiser s office for the adoption of the ad valorem millage rate and budget; the scheduling of the Tentative and Final Millage Rate/Budget public hearings and the respective advertising of the public hearings. The preparation of specific forms which must be sent to the local Property Appraiser s and Tax Collector s offices and the Florida Department of Revenue. The placement of specific advertisements which are uniform throughout the state based on the local government s situation.

12 Budget Requirements TRIM Forms Rolled Back Millage Rate Maximum Millage Rate Advertisements Budget Summary Ad Notice of Budget Hearing or Notice of Tax Increase Public Hearings Resolutions / Ordinances Certifying Compliance to the DOR

13 Budget Requirements A recent from: TRIM@floridarevenue.com indicated the following schedule of TRIM training workshops. If you are responsible for TRIM compliance in your County participation in one of these workshops is highly recommended. JUNE 1, 2017; 1:00 P.M. - 4:00 P.M. TRIM Workshop Webinar JUNE 6, 2017; 1:00 P.M. - 4:00 P.M.. (Tallahassee) JUNE 13, 2017; 9:00 A.M. - 12:00 P.M. TRIM Workshop Webinar JUNE 14, 2017; 1:00 P.M. - 4:00 P.M. TRIM Workshop Webinar Be sure to confirm these dates, times and location with the TRIM Compliance Office.

14 Budget References References Small Government Resource Manual Florida Government Finance Officers Association Section , F.S.; Preparation and Adoption of Budget Section , F.S.; Execution and Amendment of Budget Section , F.S.; Fiscal Years, Appropriations, Budgets, and Budget Amendments Chapter 200, F.S.; Determination of Millage Florida Department of Revenue TRIM Guidelines dor.myflorida.com/dor/

15 INDEX CHAPTER 129 F.S. ( COUNTY ANNUAL BUDGET Budget system established Consolidation of funds Requisites of budgets County officer budget information County budget officer Preparation and adoption of budget Fiscal year Execution and amendment of budget Unlawful to exceed the budget County commissioner voting to pay illegal claim or for excess indebtedness County auditor not to sign illegal warrants Budget of supervisor of elections; manner and time of preparation and presentation Budget of supervisor of elections; matters related to allocation, expenditure, etc., of amounts in budget.

16 Section F.S. Requisites of budgets Each budget shall conform to the following specific directions and requirements: (1) General fund budget shall contain an estimate of receipts by source, including any taxes now or hereafter authorized by law to be levied for any countywide purpose, except those countywide purposes provided for in the budgets enumerated below, any tax millage limitation to the contrary notwithstanding, and including any balance brought forward as provided herein; and an itemized estimate of expenditures that will need to be incurred to carry on all functions and activities of the county government now or hereafter authorized by law, except those functions and activities provided for in the budgets enumerated below, and of unpaid vouchers of the general fund; also of the reserve for contingencies and of the balances, as hereinbefore provided, which should be carried forward at the end of the year. (2) The County Transportation Trust Fund budget shall contain an estimate of receipts by source and balances as provided herein, and an itemized estimate of expenditures that need to be incurred to carry on all work on roads and bridges in the county except that provided for in the capital outlay reserve fund budget and in district budgets pursuant to this chapter, and of unpaid vouchers of the County Transportation Trust Fund; also of the reserve for contingencies and the balance, as hereinbefore provided, which should be carried forward at the end of the year. (3) The budget for the county fine and forfeiture fund shall contain an estimate of receipts by source and balances as provided herein, and an itemized estimate of expenditures that need to be incurred to carry on all criminal prosecution, and all other law enforcement functions and activities of the county now or hereafter authorized by law, and of indebtedness of the county fine and forfeiture fund; also of the reserve for contingencies and the balance, as hereinbefore provided, which should be carried forward at the end of the year.

17 Section F.S. Requisites of budgets continued (4)(a) Capital outlay reserve fund budget shall contain an estimate of receipts by source, including any taxes authorized by law to be levied for that purpose, and including any balance brought forward as provided for herein; and an itemized estimate of expenditures for capital purposes to give effect to general improvement programs. It shall be a plan for the expenditure of funds for capital purposes, showing as income the revenues, special assessments, borrowings, receipts from sale of capital assets, free surpluses, and down payment appropriation to be applied to the cost of a capital project or projects, expenses of issuance of obligations, engineering, supervision, contracts, and any other related expenditures. It may contain also an estimate for the reserves as hereinbefore provided and for a reserve for future construction and improvements. No expenditures or obligations shall be incurred for capital purposes except as appropriated in this budget, except for the preliminary expense of plans, specifications and estimates. (b) Under the provision herein set forth, a separate capital budget may be adopted for each special district included within the county budget, or a consolidated capital budget may be adopted providing for the consolidation of capital projects of the county and of the special districts included within the county budget into one budget, treating borrowed funds and other receipts as special revenue earmarked for capital projects as separately itemized appropriation for each district special project or county project, as the case may be. (c) Any funds in the capital budget not required to meet the current construction cost of any project may be invested in any securities of the Federal Government or in securities of any county of the state pledging the full faith and credit of such county or pledging such county s share of the gas tax provided for in s. 16 of Art. IX of the Constitution of 1885 as adopted by the 1968 revised constitution or in s. 9, Art. XII of said revision.

18 Section F.S. Requisites of budgets continued (5) A bond interest and sinking fund budget shall be made for each county and for each special district included within the county budget having bonds outstanding. The budget shall contain an estimate of receipts by source, including any taxes authorized by law to be levied for that purpose, and including any balances brought forward as provided herein; and an itemized estimate of expenditures and reserves as follows: The bond interest and principal maturities in the year for which the budget is made shall be determined and estimates for expenses connected with the payments of such bonds and coupons, commissions of the tax collector, and of the property appraiser, and expenses of refunding operations, if any are contemplated, shall be appropriated. A sufficient cash balance to be carried over may be reserved as set forth hereinbefore. The sinking fund requirements provided for in the said reserve may be carried over either in cash or in securities of the Federal Government and of the local governments in Florida, or both. (6) For each special district included within the county budget, the budget must show budgeted revenues and expenditures by organizational unit which are at least at the level of detail required for the annual financial report under s (1). The amount available from taxation and other sources, including balances brought forward from prior fiscal years, must equal the total appropriations for expenditures and reserves. The budget must include expenditures necessary to carry on all functions and activities of the special district as provided by law, including the indebtedness of the special district and the provision for required reserves. History. s. 2, ch. 6814, 1915; RGS 1525; CGL 2303; s. 2, ch , 1951; s. 10, ch , 1953; s. 18, ch ; s. 1, ch ; s. 73, ch ; s. 4, ch ; s. 53, ch ; s. 5, ch

19 Section F.S. Annual financial reports; local governmental entities. (1)(a) Each local governmental entity that is determined to be a reporting entity, as defined by generally accepted accounting principles, and each independent special district as defined in s , shall submit to the department a copy of its annual financial report for the previous fiscal year in a format prescribed by the department. The annual financial report must include a list of each local governmental entity included in the report and each local governmental entity that failed to provide financial information as required by paragraph (b). The chair of the governing body and the chief financial officer of each local governmental entity shall sign the annual financial report submitted pursuant to this subsection attesting to the accuracy of the information included in the report. The county annual financial report must be a single document that covers each county agency (g) Each local governmental entity s website must provide a link to the department s website to view the entity s annual financial report submitted to the department pursuant to this section. If the local governmental entity does not have an official website, the county government s website must provide the required link for the local governmental entity.

20 A budget is A Policy Document. Long-term financial policies. Non-financial policies and goals. Responsiveness to needs of community. A comprehensive message on services, outcomes, taxation levels, and transparency.

21 Budgeting dovetails into financial policies Formal vs. informal Revenue Reserve Investment Debt Financial Reporting.etc..

22 Budget Policies Inflationary Factors Requests (Equipment, Personnel, Extraordinary Items) Internal Transfers and Amendments Millage Rate All Funds Staffing Health Insurance Contingencies etc.

23 A Financial Plan Includes all funds. Basis of budgeting. Summary of all major revenues, expenditures as well as other sources of financing. Summary of prior year actual, current year budget and actual (or estimate), and proposed budget. Projected changes in fund balances. Description and disclosure of capital expenditures

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25 An Operations Guide Activities, services and functions carried out by the organization. Objective measures of progress toward accomplishing the organizational mission. Many times incorporates outcomes or measures into the preparation and reporting. Organizational chart. Summary of prior, current and budgeted personnel.

26 A Communications Device The effect other planning processes have upon the budget and budget process (TRIM etc). Description of the process for preparing, reviewing, adopting and amending the budget. Charts and graphs where appropriate and a narrative interpretation if the message is not selfevident. Statistical data. Formatted so that the average reader can navigate the document and understand the content.

27 Four phases of Budgeting Preparation Adoption Implementation Maintenance Through all phases accountability should be a guiding principle

28 Preparation Budget instructions, calendar and kick-off letter from budget officer. Departments & Divisions role in developing requests. Established budget review process at various stages. OMB/Finance estimates revenue and fund balances. Revenue, fund balance and expenditures put together. Balancing act continues throughout the process. Which comes first, Millage Rate or the Budget?

29 Preparation When do you start? How do you deal with deficit in early stages? Estimates from PA? How accurate are they and what do you do? Commissioner Workshops, how many? Public Hearings Experience with Citizen Committees?

30 County Citizens Board of County Commissioners Clerk of the Circuit Court Supervisor of Elections Property Appraiser Sheriff Tax Collector

31 An Annual Budget Is Required For Each Fiscal Year Ending On September 30. The Budget Must Be Balanced. Appropriations Are To Be Divided Between Countywide And Non-Countywide Expenditures. Provisions May Be Made For Certain Reserves Of Funds.

32 County Budget Schedule Deadlines On Or Before July 15: Budget Is Proposed. No Later Than August 4: Tentative (Maximum) Millage Rate Is Set. No Later Than August 24: Property Appraiser Mails Notices Of Proposed Property Taxes. September 3-18: Public Hearings To Consider Adoption Of Tentative Millage Rates And Budgets. September 18 - October 3: Public Hearings To Consider Adoption Of Final Millage Rates And Budgets.

33 The County s Budget is composed of two major components: The Countywide budget and the Non-Countywide budget. The expenditures of the Countywide budget are incurred to provide services to all residents in the County. The Non-Countywide budget represents funding for various limited service areas within the County.

34 Marion County Countywide

35 Marion County Unincorporated This chart illustrates that Special Districts included in the Non-Countywide budget serve areas of Marion County which reside outside of the various city limits. The various Special Districts may extend to all unincorporated (non-city) areas of the County or just a limited portion therein.

36 Where Can I Find the Marion County Budget? There are 3 main budget documents: Budget Document Line Item Detail Capital Improvement Program Budget Amendments with Schedule Budget Calendar Available in Budget section of

37 Where Can I Find the Wakulla County Budget? There are 2 main budget documents: Budget Document Budget Calendar Available beginning of documents linked on

38 Preparation Know the laws and rules for budget preparation, external and internal. Review existing policies and procedures. Set Goals. When presenting challenges, offer solutions. Include Long Range Financial Models. Conclude workshops with consensus and direction.

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40 Approval. Statutorily the governing authority is presented with a recommended budget for review. Board gives staff direction. Staff prepares the tentative budget for Board approval. After two public hearings the final budget is approved by resolution or ordinance

41 Miami-Dade County War Stories

42 Implementation How do you make changes to the decisions or modifications at final hearing? What system(s) do you use for budgeting? How do you communicate with departments on approved amount?

43 Maintenance, Monitoring, Managing Monitoring. Revenues Expenditures negative balances and internal transfers. Must have an approved policy detailing the process of adjusting the budget Budget Amendments and Florida Statutes.

44 Maintenance monitoring and managing Who monitors revenues and expenses? At what level of budgetary control are expenditures monitored? What corrective steps are taken in current year? What adjustments are made to future budgets?

45 How do you amend the budget for a revision of cash forward or from any source anticipated?

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47 Accountability I suggest you focus on this 24/7/365 Decisions made on budgets must be in the Sunshine and subject to public scrutiny. Sunshine law - who it impacts in budgeting? In public budgeting and finance, Transparency is more than just a buzzword. Web site posting requirement and how much non-budget info to include in document.

48 Board Budgeting Phases PREPARATION ADOPTION IMPLEMENTATION MAINTENANCE ACCOUNTABILITY

49 COUNTY REVENUE SOURCES Ad Valorem Property Taxes General Operations Ad Valorem Property Taxes - Voted Debt Service Levy Local Option Fuel Taxes Local Option Sales Tax: Typically for Infrastructure Tourist Tax Communication Services Tax State Shared Revenues: Fuel Taxes, ½ Cent Sales Tax, Revenue Sharing Special Assessments: Based on Level of service; Benefit to Property Fees for Operations: Solid Waste, Utilities, Building Inspections, etc. Impact Fees: One Time Fee on New Development to Expand Infrastructure Cost Allocation and Internal Charges

50 Marion County Board of County Commissioners Countywide Ad Valorem Millage Levy Adopted Countywide Budget /17 As assessed to an individual homeowner Assessed value of home $ 123,719 Homestead exemption (50,000) Average taxable value of home $ 73,719 X Adopted Countywide Millage Rate 3.89 Homeowner property tax levy $ As levied for the Countywide Budget Countywide taxable property value $ 15,644,017,463 X Countywide Millage Rate 3.89 Property Tax 95% $ 57,812,467

51 BUDGETING REVENUES Input from departments and constitutionals. Some are formula driven/provided. State Revenue Sharing Gas taxes Consult LCIR Look at historical trends, weighted averages, etc. In some cases you may use combinations of estimating methodologies. Pay attention to economic developments US, Florida, and your county.

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53 BUDGETING REVEUNES Be aware of any new sources of revenues. New surtaxes New programs that generate revenue Change in Charges For Service schedule Are you within the guidelines of your legislative body? Budget conservatively.

54 BUDGETING CASH FORWARD Begin looking at this early in the process. Run a Trial Balance Report and calculate current Cash On Hand for each Fund. Estimate revenues you expect to receive for the remaining fiscal year.

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56 CAUTION CAUTION CAUTION There is never a guarantee that you will have excess fund balance to carry forward or what the amount will be. If you use this in your budget do not use it to fund on-going operational or personnel expenses. Appropriate uses include: Contingency reserves One-time purchases (Vehicles or Equipment) Renovations or remodeling

57 Operating Expenditures Departments and Divisions either submit their request or input the information directly. Do you use trends to estimate your needs? Do your Budget Preparation Instructions include a policy for anticipated inflation? Some entities require a justification for certain operating expenditures. Furniture and Fixtures Travel Dues and Memberships Training and Education

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59 Communications Citizen reports Internal reports- What are in your budget monitoring reports Budget Detail Report Summarized Financial Statements Allows tracking of the overall performance of a fund/all funds. Enterprise Program Reports How does the Clerk notify BCC of over-budget issues

60 TIPS FROM OUR EXPERIENCES New position budgeting Benefits budgeting Pay scale One Time (Non-recurring) events

61 Long term operating budget plan Wakulla uses a 5 year excel and updates it regularly Capital budgeting is like combination of operating annual and long term Capital Improvement Plan 5-Year schedule Capital Improvement Budget Year 1 of the Capital Improvement Plan

62 TRIM and F. S. 129 and F. S. 200 Budgets have the force of law, and violations of law are subject to legal sanctions!

63 You could give us a nice evaluation, but tips would be more appreciated! THE END (IS NEAR)