Section 7. Budget and Financial Overview
The City of Ashland strives to deliver services essential to the community and that enhance quality of life. The Budget provides information to the Ashland community about where the money to finance the City operations comes from and how that money is spent.
Government Accounting
The City uses fund accounting to report on its financial position and the results of its operations. All governmental type funds (such as the General Fund and the Capital Improvements Fund) use the modified accrual basis of accounting. This means revenues are recognized only when they become measurable and available and expenditures are recognized when the fund liability is incurred (when the money is committed to be spent). Proprietary type funds (Sewer, Water, Electric, etc.) use the full accrual basis of accounting. In this latter case, expenditures are recognized when the fund liability is incurred, but revenues are recognized when they are obligated to the City (which can be before they are actually received).
A formal encumbrance system is utilized that commits funds for later payment and ensures that appropriations cannot be overspent. Re-categorizing money to an encumbrance occurs when a commitment to purchase is made. Encumbrance money may not be spent. Goods and services not received by the fiscal year end result the encumbrance lapsing and rolling over into the next fiscal year.
Citizens' Budget Committee
An established internal control structure is used to protect assets from loss, theft, or misuse and to ensure that compliance is maintained with accepted accounting principles. Budgetary control is maintained through quarterly budget review approved by the City Council.
The Citizens’ Budget Committee (CBC) has an important role in the biennium (BN) budget adoption process as identified by State Law. For reference, the Local Budget Law can be found in Oregon Revised Statutes (ORS) 294.305 through 294.565 which can be accessed online at https://www.oregon.gov/dor/programs/property/Pages/local-budget.aspx.
In 2017, an ad hoc Budget Process Committee was formed and created the Citizens' Budget Committee Training and Reference Guide which identifies these statutes and how they impact the operation of the CBC.
The CBC is a partner in the long term financial sustainability of the City’s financial position. This packet includes a summary of key information to help create a successful budgeting process. The information and process can be confusing at times and it is the desire of the City Council that any uncertainties be communicated with the Budget Officer for clarification.
After the BN 2017-19 process, the City Council felt that it was important to evaluate the entire budget process and identify ways that the process could be improved in future years. The BN 2019-21 budget process incorporates these changes into the CBC approval process.
