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HomeMy WebLinkAboutItem #03 - Discussion ItemJanuary 4, 1980 Joseph R. Grassie City Manager 3500 Pan American Drive Miami, Florida 33133 Dear Mr. Grassie: The City Commission, during the FY'79-80 budget hearings, expressed its wish to receive a final report from the Budget Review Committee. As chairman of this committee it is my intention to present our findings to the Commission at the date of the next meeting and I should be obliged if you would include my name on your January 10, 1980 agenda. Sincerely, y tt Bohn Cosgrove, Chairman City of Miami Budget Review Committee i Summary Information for Outline I. Budget Process Past and Present A. • Past In previous years, the budget process entailed the following activities. Firstly, the Department of Management and Budget prepared, an outlook for the ensuing year's budget. This outlook was based .on certain assumptions agreed to by the City "Manager. Examples of these assumptions are: 1) property taxes will increase by 5% as a result of local growth, 2) salaries will increase by X% based on either union negotiated contracts or the City's best estimate, 3)'Federal revenues will increase or decrease by $X, 4) State revenues will increase by $X, 5) .the' cost of pension will increase $X, and 6) inflation will affect the cost of commodities by X %. Based on the results of this. outlook, which usually assumes' that services will be maintined at -current levels, the City Manager is able.to determine whether the City will have sufficient revenues to maintaine services at current levels. If the answer is no, the City Manager determines what actions or strategies are necessary to develop a balanced budget. These strategies are translated into budget guidelines and incorporated into the budget manual, which, is used by departments for preparation.of their budgets. Once the manual is completed the City Manager holds a meeting with department directors to explain to them the budget outlook for next year and the actions they must take to ensure a balanced budget and the highest level of urban services. Departments then begin to prepare their budgets with the guidelines established by the City Manager. This preparation process includes the establishment of goals and objectives for their department within the confines of the City Manager's guidelines. Once this is completed, the input budget is developed which identifies the reduction of current inputs and hence, current services. These budgetsa are then submitted to the Department of Management and Budget which reviews same for accurateness and completeness. Discussions usually ensue with department directors regarding the contents of the proposed budget. The next and most important step includes the City Manager's review of departmental budgets. This process usually lasts two to three weeks whereby the City Manager reviews the objectives of the department for the ensuing year in terms of the overall goals of the City, the guidelines established by him and the detail budgets to support these objectives. -3- Participation By Committee Members A. Number of Members The Budget Review Committee met every third Wednesday for 10 months. During the first few months of organization and • planning and during the development of the budget, they met at -'least twice a week. These meeting dates were exclusive meetings with the City Manager, department directors, and City Commissioners. The number of regular meeting held were 10. • The committee participated in the following acitvities: 1. Discussion of Budget Outlook for FY'80 with City Manager and Department Directors 2. Discussion of Budget Manual for FY'80 with Management and Budget - 3. Preparation and discussion of decision packages with City Manager, Department Directors 4. Management and Budget review of departmental budgets 5. City Manager discussion with City Commission on the status of FY'80 Budget 6. City Manager's review of departmental budgets 7.• City Commission's review of departmental budgets 8. Public Hearings on FY'80 Budget III. Suggestions for Future Committees A. Attendance 1. Of the 10 members, one resigned - Cyril Smith,- after the first month •• 2. 0f the nine members remaining, only 5 attended on a regular basis and they are: 1. John Cosgrove 2. T. Willard Fair 3. Jack Alfonso 4. Aristides Mendez-Insua 5. Angel DePedro Summary Information for Outline Budget Process - Past and Present A. Past In previous years, the budget process entailed the following activities. Firstly, the Department of Management and Budget prepared an outlook for the ensuing year's budget. This outlook was based .on certain assumptions agreed to by the City Manager. Examples of these assumptions are: 1) property taxes will increase by 5% as a result of local growth, 2) salaries will increase by X% based on either union negotiated contracts or the City's best estimate, 3) Federal revenues will increase or decrease by $X, 4) State revenues will increase by $X, 5) .the. cost of pension will- increase $X, and 6) inflation will affect the cost of commodities by X.%. Based on the results of this outlook, which usually assumes that services will be maintined at- current levels, the City Manager' is able to determine whether the City will have sufficient revenues to maintaine services at current levels. If the answer is no, the City Manager determines what actions or strategies are necessary to develop a balanced budget. These strategies are translated into budget guidelines and incorporated into the budget manual , which is used by departments for preparation of their budgets. Once the manual is completed; the City Manager holds a meeting with department. directors to explain to them the budget outlook for next year and the actions they must take to ensure a balanced budget and the highest level of urban services. Departments then begin to prepare their budgets with the guidelines established by the City Manager. This preparation process includes the establishment of goals and objectives for their department within the confines of the City Manager's guidelines. Once this is completed, the input budget is developed which identifies the reduction of current inputs and hence, current services. These budgetsa are then submitted to the Department of Management and Budget which reviews same for accurateness and completeness. Discussions usually ensue with department directors regarding the contents of the proposed budget. The next and most important step includes the City Manager's review of departmental budgets. This process usually lasts two to three weeks whereby the City Manager reviews the objectives of the department for the ensuing year in terms of the overall goals of the City, the guidelines established by him and the detail budgets to support these objectives. After the City Manager's review, the Department of Management and Budget, in conjunction with department directors, make any modifications that may have been requested by the City Manager. Then, the budget is finally printed and submitted to the City Commission. . The process customarily followed by the City Commission in adopting the Manager's Proposed Budget usually entails two activities. The first activity involves the City Commission discussing the details of each budget with department directors. This process usually lasts two to three days. During this process, the City Commission usually voices their likes and dislikes with regard to the proposed budget. The second activity is the public hearings on the proposed budget. This activity is required by law and permits the public to voice their opinions regarding the proposed budget. .Two hearings are usually held. Once this process is completed, the City Commission makes its modifications to the budget (if any) and adopts same. B. Present The differences between the past budget process and the present process are as follows: 1. The citizens are involved from the beginning of the . process instead of at the end only. This involvement .is in the form of Budget Review Committee. 2., The Budget Review Committee was involved in every major step of the budget process from the development of budget guidelines to the detail review of departmental budgets with the City Manager and City Commission. 3. Department directors were given the opportunity in ass kti ng the City Manager in developing guidelines and alternative decision packages to ensure a balanced budget and a high level of urban services. . 4. The City Commission was brought into the budget process at an early stage and kept informed on a continuous basis. In previous years, their involvement was only limited. 5. The. City Manager was able to read the pulse 'of the community through the participation of the Budget Review Committee and the early involvement of the City Commission. II I IIMNII PIN WPM • -3- II. Participation By Committee Members A. Number of Members The Budget Review Committee met every third Wednesday for 10 months. During the first few months of organization and .planning and during the development of the budget, they met at least twice a week. These meeting dates were exclusive meetings with the City Manager, department directors, and City Commissioners. The number of regular meeting held were 10. The committee participated in the following acitvities: 1. Discussion of Budget Outlook for FY'80 with City Manager and Department Directors 2. Discussion of Budget Manual for FY'80 with Management and Budget 3. Preparation and discussion of decision packages with City Manager, Department Directors 4. Management and Budget review of departmental budgets 5. City Manager discussion with City Commission on the status of FY'80 Budget 6.City. Manager's review of departmental budgets 7.. City Commission's review of departmental budgets 8. Public Hearings on FY'80 Budget III. Suggestions for Future Committees A. Attendance 1. 0f the 10 members, one resigned - Cyril Smith - after the first month 2. Of the nine members remaining, only 5 attended on a regular basis and they are: . 1. John Cosgrove 2. T. Willard Fair 3. Jack Alfonso 4. Aristides Mendez-Insua 5. Angel DePedro gr -4- Those not in attendance are as follows: • 1. Robert Hartnett 2. Gary Dix 3. Stephen Chepenik 4. Carlos Salman - (requested a number of excuses due to business reasons) 3. An attendance policy should be developed and agreed to by the City Commission that would ensure attendance by appointees and provide for replacement of appointees that fail to attend or resign. B.. Scope of Committee 1. Present —According to the resolution establishing the Budget Review Committee, its purpose is as follows: 2. Suggested The responsibility of the Committee should be expanded to include the review and participation of all facets of the budget process. This involvement should include but not be limited to the understanding of major budget issues and a Committee recommendation to the City Commission on -same. This should be accomplished in a manner to ensure that the . Committee's activities do not conflict with the Charter -as it relates to duties and responsibilities of the City Manager. i The Committee should also hold "town meetings" to discuss the budget with the public and receive their comments on same. Illii 111!