MRSC has joined with Toni Nelson, Small Cities Specialist, State Auditor's Office, Gayla Gjertsen, Finance Director, City of Tumwater, and Mike Bailey, Finance Director, City of Redmond, to bring you the "Finance Advisor" column. The "Finance Advisor" will feature a new article each month with timely local government finance information and advice you can use.*

Whoa! Budget Again … or Still??

May 2006

By Gayla Gjertsen, Finance Director, City of Tumwater

Yes, now is the perfect time to start thinking about your 2007 Budget. Why? You should be planning your annual retreat about now and that is the perfect time to think about where you want to go and how you plan to get there. This is the time for the legislative body, along with the executive branch of your organization, to take the reins for the beginning of the budget process and start talking about “broad goals.” If you have a retreat, does your agenda look like any other council meeting or work session? That is not what you should be doing at this session. This retreat or planning session only happens once a year so it is important to use this time to “re-discover” and/or “re-validate” where you're headed and how you're going to get there.

The legislative body's primary role in the budget process is to establish the organization's broad goals. These broad goals provide the overall direction for your organization and serve as the basis for developing all of your policies, programs and program levels, capital construction and improvements, and possibly even maintenance levels.

Many can get stuck on how to determine what their broad goals are. One way to get started is to pull out all of those long-term planning documents that you have already worked so rigorously on, such as the comprehensive land use plan, transportation plan, and utilities (water, sewer, stormsewer) plans. Also look at your police and/or fire master plans, and, even historical district, downtown, and economic development plans, if you have them. You may even have others. All of these plans typically have priorities, desired service levels, and/or vision statements. Get all of them laid out and have staff compile a master list of your primary goals. One of your challenges in doing this is to deal with the conflicts that inevitably arise between competing goals. You need to resolve these conflicts in order to set a clear direction for the achievement of your overall goals.

The most important thing in this exercise is to think strategically. In other words, don’t get bogged down in the details. Try to get agreement on a small number of broad goals. These written goals should address the most critical issues facing the community. Defining priorities among competing goals will also improve their usefulness in allocating resources. An example of a goal could be:

Public Safety: Develop standards of service for police and fire and ensure that police and fire services are maintained as top priority services, including adequate funding for staffing, for operating budgets and capital requirements.

(Colorado Springs, Colorado)

There are many other examples of broad goals out there, and certainly, you can use those to assist you in your exercise, but, of course, these need to be tailored to fit your own organization's issues, values and financial resources. One potential resource for sample goal statements is the Government Finance Officer’s Association’s "Budget Practices" Web page.

Once you have set and prioritized your broad goals, staff can then use that information to establish the logical links between authorized spending levels and your goals. We often hear the complaint that legislative bodies (councils) don't have a role in the budget process. Now you know you have the most important role. You are the primary architects of this project and without your leadership, we really don’t know what we're building.

Gayla L. Gjertsen has been the Finance Director for the City of Tumwater for over 15 years and was previously the Director of Administration for the City of Milton for13 years. She has also served as president of the Washington Finance Officer’s Association. Gayla has been a presenter at the annual Budget and Fiscal Management Workshops held each summer for many years, and periodically conducts other workshops and writes about local government finance issues.

*The Articles appearing in the "Finance Advisor" column represent the opinions of the authors and do not necessarily reflect those of the Municipal Research & Services Center.