Budget Analysis for the City of Lakeland

Budget Analysis for the City of Lakeland: Executive Summary

In order to understand how a new performance-based budgeting process could be utilized by the City of Lakeland, it is essentially to conduct a review of the City's Annual Budget, with a detailed description of how the budgeting process works from beginning to end.

Lakeland's budgeting process is divided up into parts, with each part being designated a specific amount of time (in terms of a calendar month) in which it is to receive attention. The tasks associated with the budgetary process are thus sequential and proceed in an orderly manner; once the first steps are taken and accomplished, the next steps may be conducted.

Steps According to Monthly Division

The first steps begin in the month of February. The Revenues Manual supplied by the City is utilized to understand and predict the City's revenue and revenue sources, using a systematized method of documentation that serves as the basis for framing and guiding the decisions that must be made when deriving the budget. The Manual gives receipts plus indicates what variables impact the revenue cycle, and how taxes, special assessments, franchises, intergovernmental revenue, interest, and service charges factor in as potential revenue categories.

During this same month, the City submits a list of projects with attendant costs (derived from estimates given by associated departments). Thus, the Manual is reviewed and new costs for the year for any new projects are tallied.

The month of March proceeds with the next two steps in the process: first, use of the financial trend monitoring system; second, budget system training. In the first step of this month, pivotal financial and economic predictors and indicators are used to gauge the City's economic condition. The City's financial health is told by ratios, in other words, that provide a basis for comparison of the City to other cities across the nation as well as to other service organizations. Items that are compared in this step include debt structure, liabilities, operating cash flow, revenues/expenditures, resources, and community. Comparing the City's status with regard to these items to the status of other cities provides some context as to how far ahead or behind the status quo the City is in terms of budgeting. The second step for this month is to provide training for new members of the budgeting staff.

April and May serve as a three-in-two part of the process, with three steps being planned between the two months. First, the results of the City's Core Services are given a final revision made; part of this step includes discussing how the revision will affect the new cycle going forward. Second, the capital improvement plan (CIP) is revised according to the project requests made in the month of February and the analyses conducted in the month prior. Third, the goals of the coming cycle are assessed and used to make adjustments if necessary to the Core Service ranking and grading conducted so as to give projects a set priority over the course of the year.

In June, the City begins its budget kickoff: a business plan package is reviewed along with staffing needs, operating budget and CIP. At this point a directional strategy is developed and instructions for preparing the budget's resource development, with regard to the needs of the business plan. Because some time has passed since the last submission of capital projects, new submissions are taken along with the associated costs derived from priorities and actionable items.

July's steps consist of an administrative review of each department's operational budget. Important in this step is having a detailed list of the various staffing structures, line items, and performance measures that will be used by the departments, along with a table of organizations with which they will be associated. The City Manager will at this point make a tentative determination about the proposed budget. During this month, the City Manager and Finance Department submit a final recommendation for a CIP for the year.

August begins with a legislative review of the recommended budget from the prior month. Fund summaries, consisting of a revenue/expenditure balance sheet, are submitted along with the various projects from the City's departments. These should include operating/performance budgets. A tentative budget is then prepared and provided both to the City Commission as well as to all stakeholders.

In the month of September, public hearings are held, which are required by law, regarding the implementation of the recommended budget as well as property tax establishment rates. This is just the first hearing and a second is also required by law; the same purpose of the hearing remains, and it gives the public a chance to voice concerns regarding the proposals put in place by the City. Finally, the legislature approves the City's recommendations for the tax millage rate and the budget is passed.

In October, the City's budget is published.

Finally in November and December, feedback is given and reviewed; feedback comes from users from within the City's budgetary system; it is directed towards providing points in the overall improvement of the budgeting process and implementing a policy of exceptional application.

Thus, the City's feedback loop helps to shape the budget for the following cycle. Input and analysis is critical in effecting the next year's budget and CIP funding, which in turn is put out to customers. The process repeats annually.

Prioritizing Based on Performance and Relevance

The City's budget is guided by the principle of prioritization and can be assessed as a performance-based model in the sense that priority is given to projects that perform well. The strategic operating plan (SOP) of the City reflects the City's goals, values and outcomes for the community. At the heart of the process is the City's Commission Retreat, which serves as a platform for members to come together, present and develop desired expectations for the year. Presentations are given by various entities, from Economic Development groups to Education, Neighborhood Association, and City Commissioners. Input and feedback are provided for every presentation, and they are ranked according to their relevance in helping the Office to achieve the goals it has established. Thus, they are theoretically assessed on a performance basis.

The goals for the City include generating a high quality of life for the members of the community, communication, economic opportunity, fiscal management, and growth management. The Core Services that reflect these goals depend upon the City's ability to align itself with a process that enables the budget to come to completion.

The Process

This means that, first, the City must identify available resources; second, it must review priorities; third, it must review directional outcomes; fourth, it must review services (both Core and Support); fifth, it must ensure that services are aligned with the City's overall goals; sixth, it must evaluate each of the budgeted expenditures by service; seventh, it must perform a comprehensive evaluation and alignment of resources; eighth, it must report and distribute the budget; ninth, it must establish a method of accountability to stakeholders.