HomeMy WebLinkAboutStaff Report 118-05
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TO: HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE: JANUARY 19, 2005 CMR:118:05
SUBJECT: 2005-07 BUDGET DOCUMENT FORMAT
RECOMMENDATION
Staff recommends the Finance Committee review and comment on format changes to the City
Manager’s 2005-07 Budget documents.
BACKGROUND
On November 15, 2004, the City Council approved a colleague’s memorandum recommendation
to formalize and implement a number of budgeting practices into the annual budget process and
document. The four areas described in the memorandum included an annual review of the
Council’s “Top 5” Priorities at the outset of the budget cycle; inclusion of performance measures
in each year’s budget document; identifying capital projects that have possible policy
implications; and continue summarizing annual funding changes in each department budget
section. All of these except the “Top 5” review have budget presentation implications.
As a matter of practice, a number of presentation adjustments are made at the outset of the two-
year budget cycle. These changes result from a number of sources, including public and Council
Member comment, presentation streamlining efforts, and municipal finance best practices. This
report summarizes the information format changes to be included in the City Manager’s
Proposed 2005-07 Budget document.
DISCUSSION
The City Manager’s budget presentation to the City Council represents the organization’s fiscal
plan for accomplishing its goals for the next one to two year period. It reflects the foundational
knowledge from the recently concluded update to the Long Range Financial Plan (LRFP),
community input, and resources the City Manager believes are necessary to accomplish the
City’s mission. Staff has just begun the 2005-07 budget process and will present a proposed
budget document for Finance Committee consideration during several public hearings in May
2005. Presentation changes will occur in the operating budget, capital budget and municipal fee
schedule documents.
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Operating Budget Document Changes
A number of changes are being prepared for the operating budget document, including:
· Addition of a citywide expense category summary table: enables the reader to see
citywide spending on salary and bene fits, contract services, etc.
· Addition of percent change column to financial summary tables: both the dollar and the
percent change information help the reader interpret variance data.
· Inclusion of benchmark measures: per City Council recommendation, department
performance measures will be included in each year’s budget document. The format is
also changing (Attachment A) and will be based on input, output, efficiency and
effectiveness benchmark measures. The “best practices” benchmark will be noted where
possible. Three years of data (prior, current and next) will be presented. Also,
performance measures from the City Auditor’s Service Efforts and Accomplishments
report will serve as base measures where possible.
Capital Budget Document Changes
The primary change to the five-year capital plan document involves the redesign and
streamlining of the project page layout (Attachment B). Specifically, the project page will
incorporate the following changes:
· Streamlined format to move to a one -page -per-project layout.
· Placing project facts in an easy-to-reference location, including: status, timeline, percent
complete, managing department, and Comprehensive Plan references.
· Redesign of financial summary in more intuitive format and breaking costs into pre-
design, design and construction components.
Municipal Fee Schedule Document Changes
The municipal fee schedule will move from a landscape to a portrait perspective to improve
readability and online ease-of-use. The typical two-year fee presentation will continue with the
proposed fee schedule document, for comparative purposes and to fully consider proposed fee
changes. However, the adopted fee schedule document produced after budget adoption will only
include the fee schedule for that year—the prior year’s fee data will be removed.
In an attempt to determine that adequate cost-recovery levels exist with City fees, department
staff will be asked to review the expense components of each fee and assign a cost index to each.
The indexes used in this effort include:
· Bay Area consumer price index: determined by the United States Bureau of Labor
Statistics; used for fees with primarily external or regional cost factors.
· Department or citywide cost index: determined by either salary/benefit or total cost
growth at the department or citywide level; used for fees with City staff and materials
costs as the primary expense factor.
· Building or construction cost index: determined by regional growth of capital related
expense; used for fees with capital projects or construction costs as a primary cost factor.
Administrative Services Department staff will recommend annual fee increases to departments
beginning with 2005-06 once the appropriate cost index is associated with each fee. Full cost-
recovery includes all direct costs as well as associated overhead and allocated expense.
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ATTACHMENT
Attachment A: Sample Operating Budget Section
Attachment B: Sample Capital Budget Section
Attachment C: Sample Municipal Fee Schedule Section
PREPARED BY:
CHARLES PERL
Budget Manager
DEPARTMENT HEAD APPROVAL:
CARL YEATS
Director, Administrative Services
CITY MANAGER APPROVAL:
EMILY HARRISON
Assistant City Manager