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BASIC CONCEPTS OF CITY BUDGETING Role and Purpose of Budgeting '- Bei;0re-'it eTi98 ie isiativ*- S~s-si~o~,-~sta-te'i-aw<lid-~ot-require-most cities-toprcpare a budget. The exception was that managers of Plan B statutory cities prepare an annual budget. Most home rule charters also require budgets. The proposed property tax hearing and notification legislation in 1988, however, required that all cities prepare an annual budget. The first objective of a budget is to have expenditures equal to revenues. As public entities, this means keeping expenditures at a minimum so that taxes of residents can be kept at a minimum while providing the maximum level and quality of services. A budget is a comprehensive financial plan for a given period of time. It includes estimates of the level of services, necessary expenditures, and probable tax receipts and other income. It is a complete outline of city activities, containing estimates of probable costs and available revenues during the coming year. Budgeting is critical in both city finance and aclminisu:ation. Proper budgeting can assist the council in the performance of five vital functions: Obtaining estimates of the expected revenues for the coming year and, with this information, planning city spending; Controlling expenditures once the council has allocated available money among the various city services; Facilitating and coordinating important decision making; Evaluating the level and quality of services the city provided during that year;., and Measuring efficiency by measuring the level and quality of service citizens received for each dollar the city spent. Before preparing the annual budget, the city reviews its total revenue picture and answer the following questions: Is the city making the best use Of its taxing powers'?. Is the tax rate adequate to meet the revenue needs of the city? Are the tax assessments distributed equitably among local taxpayers? Cities aim review available intergovernmental grants and aids. They aiso review regularly the adequacy of other sources of city revenue. In particular, they review whether license fees and charges for services the city provides are adequate to cover the city's costs and expenses in such programs, whether the city should establish fees for other city service programs that are currently provided without charge; and whether the council and' other boards are managing the disposition of idle funds properly. Budget Responsibility Ultimately, budgeting responsibility resides with the council. The council must accept or reject the budget and insist upon standards of budget enforcement. Although it must retain responsibility, the council should give the tasks of budget preparation and execution or enfomement either to the clerk or manager, a council committee, or some other city officer. In standard plan cities, the council might use either of two procedures. It might delegate the task of coordinating departmental budget requests to a council committee. It may make either this committee or an administrative officer responsible for budget execution. Or, the council can give the responsibility for both budget preparation and execution to the clerk, deputy clerk, or other official responsible for the supervision of all city activities. Generally, cities delegate budget execution or enforcement to the chief executive or admires' trative officer of the city.