As is their usual modus operandi, City of Edmonds’ staff are busy this time of year preparing departmental budgets for inclusion in the city’s next overall budget.
But this year, for the first time, staff members are helping prepare two, 12-month budgets rather than a single one in order to create a financial road map for Edmonds in 2007 and 2008.
A biennial budget has been in the talking and planning stages for several years, according to Mayor Gary Haakenson and Dan Clements, director of administrative services. The mayor said it has taken Clements — whose office literally is where the buck stops at City Hall — and his staff, that long to “get the financial records of the city into a proper condition to do a two-year budget.”
Staff has “gone through every inch of auditing and accounting information so they feel we are ready to do a two-year budget,” the mayor added.
Although for two budgets it initially will take the city more time to project expenses, calculate anticipate revenue and plan for two years out, the initial investment of time is not significantly greater and is less time-intensive in the long run, according to Clements.
Most cities in Washington that have moved to biennial budgets are pleased with the system, Clements said.
Presently, city staff are preparing budgets that will undergo further adjustments during meetings with the mayor. He will present the biennial budget to the City Council by Nov. 1. After the Council and public have weighed in on the proposals, the Council will vote by year’s end to approve the budgets.Typically, quarterly budget adjustments are made by the Council for reasons such as unanticipated expenditures or additional revenue, Haakenson said.
The most common reason for preparing a biennial budget is the time savings, Haakenson said. Hours no longer spent crafting a budget less than 12 months after the previous one was finalized may be spent in other budget areas, such as strategic planning and performance measurements.
Another advantage is the longer perspective it gives the city. When budgeting is done yearly, the emphasis tends to be on balancing budgets rather than strategic planning. Multi-year financial planning is a practice recommended by the Government Finance Officers Association.
Political implications are another reason for opting for a biennial budget. A two-year budget, by state law, must begin in an odd-numbered year so as to not coincide with elections of some policy makers. With an annual budget, every other one is developed during the year of elections of those who make policy decisions. That adds the potential of a political element to financial planning.
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