Transcript Slide 1

Budgeting
Minnesota Chiefs of Police Association
C.L.E.O. & Command Academy
December 4, 2014
Chief Tim Fournier
New Hope Police Department
(763) 531-5141
[email protected]
Overview
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Purposes of budgeting
Revenue sources
Various types of budgets
Steps in the budgeting process
Budgeting guidelines
A sample template
Definition: Budget
A budget is a detailed plan for the
acquisition and use of financial and other
resources over a specified period of time.
It represents a plan for the future
expressed in formal quantitative terms
A budget it more than just
numbers...
It is a financial roadmap to the future
It’s a plan expressed in financial terms
Budgeting is the process of allocating
available resources among competing
demands.
…a reflection of values. Whose values?
Budget as a Tool:
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Facilitates Communication
Establishes Priorities
Determines Programs and Their Contents
Exercises Control of Operations
Evaluates Performance
Why have budgets?
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Legally required
Accountability
Evaluation
Planning
Information
Conflict Resolution
“Fiduciary Responsibility”
“Of or relating to holding something in
trust for another”
Key Feature: Expenditures must not
exceed revenues
Specific Forms of Budgets
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Line-Item Budget
Performance Budget
Program Budget
Zero Based Budget
Enterprise
“Hybrid”
Line Item
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Each category of activity is documented
and receives a funded amount
Advantages: Simple to construct; Easy to
compare one year to the next
Disadvantages: Lines tend to perpetuate
themselves from one year to the next
Assumes that we begin with last year’s
allocation
Performance Budget
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Instead of focusing on programs…focuses
on tasks or activities that staff performs
Advantages: Does a good job of depicting
unit costs ie. Cost per patrol mile
Disadvantages: Emphasis upon quantity,
not quality of activity; some things are
difficult to measure.
Program Budget
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Each service program is listed in the budget and
then broken down further by listing budget
allocations as is done in a line item budget
Advantages: Focus is upon services; easy to
show priorities
Disadvantage: Stakeholders have ownership in
programs…can cause conflict it they are
unwilling to collaborate
Zero Based Budget
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A process of budget development in which every
program and activity must justify its existence
and how it relates to the organization’s mission
and goals…everything is on the table. Starting
over from scratch.
Advantages: Eliminates “We have always done it
this way”; Forces innovation and efficiencies.
Disadvantage: Very, very time consuming
Enterprise Funds
Funds earmarked for a specific service
provided by a municipality. Examples
would include ambulance services, utility
funds, liquor operations.
Normally, the money collected is used to
maintain that specific program.
In reality….we use a combination
of all these types of budgets.
We use a “Hybrid” budget
Two general types of budgets
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Annual Operating Budget
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1 year (municipal)
Capital Outlay Budget
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5 year +
Tangible things
Sources of Revenue
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Taxes (property)
Fees for Service
- copies of reports, photos, videos
- license related background checks
Fines
Intergovernmental Revenue Sharing
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Local Government Aid (LGA)
State Peace Officer Aid
Grants
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Timeline
Fiscal Year (Municipal and State are different)
A continual process
Often created 6 months before it will
begin and 18 months before it will finish
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Process
Executive Development
Legislative Consideration (City Council)
Adoption
Execution
Nuts & Bolts....
....time to make a budget
First things first….
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What should we be doing?
What are we doing?
Should we be shedding services?
Should we be adding services?
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What are our values?
What should be our priorities?
What threats / opportunities will we be
facing in the next year…in years to come?
What will be the internal and external
expectations?
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Review past expenditures by category
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Personnel
Commodities
Schools & Conferences
Contractual Services
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Review expenditures by line
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Salaries - Regular
Salaries - OT
PERA
Health Insurance
In-service Training
Fuels
Extrapolate
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Are you where you are supposed to be?
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Project expenditure to year end
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Are there unusual circumstances?
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What will you spend next year?
Scan the environment
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What is happening with your region’s
economic health?
What is happening with your
city’s/county’s economic health?
What are the finance people providing as
a guideline?
What are the goals of the City Council?
What will your needs be within the org?
Ask for input
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From supervisors and line employees
From your boss
From finance people
From other stakeholders (city divisions)
Do your home work…what are other
organizations in your area doing, asking
for, addressing?
“Windows of Opportunity”
Go to it...
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Line Item
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Items in appropriate categories?
What don’t you have control over?
Capital Outlay
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Develop replacement schedules 5-10 years
out
Life expectancy of equipment?
 Justification sheets
 Trade-in values
 Consider other departments…build alliances
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Present it...
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Cover Letter
Budget Summary ( by category)
Line Item (by line)
Line Item Notes
Capital Outlays
Capital Outlay Justifications
Capital Outlay Replacement Schedules
Budget Summary by Category
Program
Program
2011
2012
Allocated
Requested
Code
Description
6210
Office Supplies
$
12,000.00
$
12,000.00
$
6211
Small Tools
$ 113,748.00
$
61,715.00
$(52,033.00)
6212
Fuel
$ 157,800.00
$ 207,000.00
$ 49,200.00
6215
Equip/Parts
$
26,488.00
$
25,688.00
$
6216
Equip/Tires/Batt
$
11,000.00
$
11,000.00
$
6229
General Supplies
$
38,485.00
$
45,150.00
$
6,665.00
6235
Consult Serv
$
14,650.00
$
14,000.00
$
(650.00)
6237
Telephones
$
43,064.00
$
41,824.00
$ (1,240.00)
6236
Postage
$
200.00
$
250.00
6239
Printing/Publishing
$
13,300.00
$
12,200.00
6240
Custodian/Shredding
$
800.00
$
800.00
$
6255
Electric
$
2,000.00
$
2,800.00
$
800.00
6265
Repairs-Equipment
$ 110,674.00
$ 120,594.00
$
9,920.00
6275
Schls/Conf - Local
$
40,035.00
$
39,345.00
$
(690.00)
6276
Schls/Conf-Other
$
14,730.00
$
8,210.00
6277
Education Asst
$
26,000.00
$
30,000.00
$
4,000.00
6280
Dues & Subscriptions
$
11,130.00
$
10,890.00
$
(240.00)
6281
Uniforms/Clothing
$
50,025.00
$
52,400.00
$
2,375.00
6310
Rental Expenses
$
81,503.00
$
91,904.00
$ 10,401.00
6399
Other Charges
$
36,678.00
$
15,150.00
$(21,528.00)
$ 802,920.00
$ (1,390.00)
Total:
$ 804,310.00
Difference
$
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(800.00)
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50.00
$ (1,100.00)
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$ (6,520.00)
Line Item by line
(Additional Detail)
Code
6215
2011
2011
2012
Allocated
Projected
Requested
Description
EQUIPMENT - PARTS
Patrol/Inv/Admin Vehicles
$
16,000.00
$
15,250.00
$
16,000.00
Squad License Plates
$
250.00
$
250.00
$
250.00
Batteries (small)
$
5,000.00
$
8,738.00
$
8,738.00
Gun Parts Replacement
$
500.00
$
700.00
$
700.00
Push Bumpers
$
1,250.00
$
800.00
$
1,250.00
TOTAL
$
23,000.00
$
26,488.00
$
26,938.00
Line Item Notes
Explains what each line item is / dollar
increase or decrease / reason for decrease
or increase / why additional or less
funding is requested in the budget
proposal
Line Item Notes
Light Bar for Marked Squad (1)
The life expectancy of emergency light bars that are mounted on the roof of a
marked squad car are between seven and nine years. This light bar will replace
one that will be 8 years old in 2012. This light bar will be the same as those that
we replaced in 2011 it will be an LED light bar that means decreased
maintenance, brighter light, and lower profile which decreases wind drag and
should have a corresponding positive impact on gas mileage.
2011 Allocation:
2012 Request:
$7,960
$1,695
Capital Outlays
Capital Outlay by Category
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prioritized 1-3
6740 Capital Outlay - Other Items
Priority
Qty
Item
Cost
1
Comments
4
Automated External Defibrillators
$
7,455.00
2
2
In-Car Video System (Squad Video Camera Systems)
$
12,000.00
Will be repeated in 2013
1
10
Tasers
$
13,120.00
Will provide one for every patrol officer/ at $820 each, current
units are 9 years old and starting to fail
1
2
Light Bars for marked squad cars
$
2,960.00
3
4
Doppler Radar Units
$
10,974.00
$
41,589.00
Replacements at $1,864 including tax, current units are 10
years old and can not be updated to new standards
Capital Outlay Notes…Explain the need
Capital outlays are funded with revenues
or certificates of indebtedness
Notes explain why capital outlays are
needed, whether the equipment is
additional or replacement, what will
happen to old equipment, EST tradein/auction values, etc.
Replacement Schedules
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What are the items you will be replacing?
Balanced or spiked expenditures?
Life expectancies?
How far out?
A Special Fiscal Planning Tool
Capital Improvement Plan (CIP)
A CIP is your best guess as to major
expenditures facing your department and
the other municipal departments in years
to come. It is not a budget…it is a long
range capital expenditure plan.
Other Concerns
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Packaging
Forming of alliances
Conditioning the environment
Buy in
Communicating
Tracking expenditures
Contingency
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Transfer of funds
Spending of funds
Spend it or lose it
Building in a cushion????
The audit
What will get you into trouble?
Remember…
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Budgeting is a continual process
It’s your “best guess”
“Full disclosure”
It isn’t just the $6,000 that you can’t account for
that will get you in trouble…it’s the $600 or any
amount…Follow procedures and document!!!
The bottom line in any business, public or
private, is fiscal
Budget allocation is built upon trust
Don’t take this stuff too seriously…
Questions