City Council Agenda and Packet 2022 07 21 SP

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SUBJECT: BUDGET DEVELOPMENT PROCESS & FINANCIAL POLICIES DATE: JULY 21, 2022 PAGE 4 OF 5 The current set of financial policies include an Introduction Section and the following eight Policy Sections: 1. General Policies 2. Reserve Policies 3. Debt Policies 4. Revenue Policies 5. Operating Budget Policies 6. Investment Policies 7. Capital Asset Management Policies 8. Accounting, Auditing, and Financial Reporting Policies BUDGET GUIDELINES In January, the Finance Department issued instructions and forms for departments to request C-I-P projects, and the City Manager provided guidelines to staff regarding the development of the 2023-24 budget. Departments were asked to submit operational and capital project requests with the following budget guidelines in mind: • 2023-2024 budget request amounts will be preloaded based upon the 2020 adopted budget (before amendments and COVID-related budget cuts). • The Marshall Fire has had a significant impact to our fiscal position, and the full magnitude of the impact remains to be determined. Additionally, expenditure trends are outpacing revenue trends. Accordingly, this will be a challenging budget process. Consider these factors as you prepare your requests. • Line item adjustments should be based on projections, not simple percentage increases. • Also, as you prepare your request consider our human resource capacity to complete projects and programs. We should not be budgeting for things we do not have the capacity to complete, and if the project/program is important enough, consider requesting additional human resources to ensure that we can implement. • Along with any new staff position requests, include specific information defining the need for the position(s). • Given the fiscal challenges we face, the community's expectation for a high level of service, and the significant level of capital project expenditures already submitted, we expect to have some difficult decisions ahead during the budget process. You can help in advance by reviewing all of your operations, programs and projects and evaluating where we can reduce expenditures. • Budget priorities will be based on maintaining what we have vs. adding new services/programs/amenities. • If you propose increasing services, include appropriate off -sets or reductions in other program areas. CITY COUNCIL COMMUNICATION