by Mayor Joe Lockwood
The City of Milton is riding the “high” of rolling out our police and fire operations in May, which provides our citizens an increased level of public safety service. Now we must do some soul searching as we begin to develop the budget for fiscal year 2008.
Perhaps no other issue is as difficult for elected officials as choosing among so many different and important needs – public safety, transportation, and parks, just to name a few. We must weigh a variety of needs and requests, which together vastly exceed available funds. Priorities must be set and decisions are guided, of course, by the requirement under the City Charter that taxes cannot be raised without voters’ consent.
In Milton, it is the city manager’s responsibility to develop the budget in collaboration with the various department heads and present it to City Council for approval. In reality, the city staff works closely with Council throughout the process. And of course, there are opportunities for the public to ask questions and provide input at various points along the way.
Under the guidance of the city’s Director of Operations and Finance Manager, budget data is gathered in three phases:
The general fund for maintenance and operation (M&O) – This essentially is the cost to continue doing what we did the previous year. Naturally, those costs usually increase slightly every year. This year we are projecting about a 3.5 percent rise.
M&O initiatives – This is the new stuff – the new or expanded initiatives and projects, additional staff, and so on that department heads want to undertake, and what it will cost. Just because they are requested does not mean they will be approved, however. All requests must be justified before a recommendation is made.
Capital projects – These are the big-ticket items, generally costing $50,000 or more, that include things like construction of new facilities or repairs and renovations on existing facilities, updating the comprehensive plan, parks and recreation projects, and transportation projects.
It is this last category in which the Council and the public have the greatest input in establishing priorities. Each project is evaluated on numerous criteria including whether the proposed project involves a health or safety hazard, if it is legally mandated, if it maintains a current asset, if it has a future operating impact, the amount of public support, the number of citizens affected, the economic impact and, of course, the availability of funds. This process will take place in early July.
At the same time department heads are developing the expenditure side of the ledger, the finance office is projecting revenue for the coming year. The bulk of those funds come from property taxes, along with other sources such as local option sales tax, business licenses and user charges. The city does actively seek a variety of grant opportunities to help supplement the budget – we have received $630,000 so far this year with another $526,000 pending.
Once the expenditure needs are determined and the revenue projected, the finance office then balances the budget, including salaries and benefits. The difference between the two figures is the amount available for capital projects.
Earlier I mentioned that the capital projects identified far outweigh the funding available to carry them out, and that we need to prioritize. But first we need to answer a larger philosophical question – should we move forward aggressively to carry out those projects or should we save for a rainy day? All governments have a reserve fund – like your family’s savings account – typically 16 percent or two months worth of operating expenses. For Milton, that equals approximately $2.5 million. When we embarked on incorporation, we gave ourselves five years to build the reserve fund to that level. Should we try to get there quicker if the funds are available?
Along the way, Council will review the process in work sessions throughout the summer. Once the process is complete, we will hold two public hearings, on Sept. 6 and Sept. 20, before adopting the budget.
Our inaugural year budget calls for $11.8 million in expenditures and $12.6 million in revenue. It’s important to note that this was a 10-month budget. The process we are embarking on now is the first full-year budget we will develop.
Throughout this process, as always, we welcome your comments and questions. You can e-mail us at email@example.com or call 678.242.2500. I hope your summer is off to a wonderful start.