Planning & Budget Process

FY 2021-2022 Annual Budget


Planning Process

Strategic Plan


The City has developed a comprehensive strategic plan that was created by citizens, elected and appointed officials, and staff during recent years. The plan documents and formalizes the goals and processes by which White Settlement will strive to enhance its quality of life. Its foundation is the City’s mission statement and a set of policy statements.


Mission and Policy Statements


The City’s Mission Statement serves as a broad statement of purpose. There are six major defined policy statements intended to support the City’s mission. Each describes in specific terms a desired ending state or result. The policy statements are the vision of White Settlement at its very best and represent the ultimate target at which all activities are aimed. Policy statements are addressed with goals and strategies and assigned to each city division. Each goal represents a specific Council or citizen direction given toward achieving the more general policy statement. Policy statements may or may not have specific goals and strategies planned for the upcoming fiscal year. More detailed planning and additional resources may be required to identify the goals and determine the necessary strategies to achieve them.


Link to the Budget


City staff and elected and appointed City Officials rely on the policy statements to provide direction and guidance for recommending and authorizing the expenditure of public funds. The budget is the Annual Budget element of the strategic plans. It is prepared around the policy statements set by the City Council at its budget workshops. Community input is also a factor in determining use of resources. Not all policy statements are addressed in each Annual Budget element. The Annual Budget specifically defines the methods or processes by which the City Manager and City Staff will go about achieving the desired results for each policy statement.


Goals, Objectives, and Performance Measures


Goals represent specific outcomes that will promote or enhance policy statements. Strategies are the specific actions needed to accomplish goals. Both goals and strategies are identified through strategic planning sessions with senior management team and key division staff guided by Council priorities. The Annual Budget is a detailed look at each operational area, or division, within the City’s departments. Each division within the City has developed its own unique set of divisional goals which enhance its purpose and connection to the policy statements. Annually, each division reviews and updates these goals.


Long Range Planning


The City uses a three-year planning horizon to prepare the capital projects program and financial forecasts. The three-year capital projects program and the anticipated funding sources are adopted by separate plans. The capital planning process is discussed in more detail in the Capital Improvements section. The following provides an overview of the City’s strategic plan policy statements and the goals and strategies planned for the upcoming year.


Bond Rating Information


The City’s goal is to fund capital improvement projects on a “pay-as-you-go” basis whenever possible. For large infrastructure projects or large pieces of equipment, debt financing is sometimes required. The City’s debt management objective is to maintain levels of debt service that does not adversely impact tax or utility rates and does not hinder the City’s ability to effectively operate the utility systems, street network, or other facilities. Debt financed projects must meet the City’s long-term financing criteria as included in the Fiscal and Budgetary Policy.


When the City of White Settlement utilizes long-term debt financing, it will ensure that the debt is soundly financed by conservatively projecting the revenue sources that will be utilized to pay the debt and financing the improvement or equipment over a period of time not greater than the useful life of the asset.


Budget Process

Summary


The budget is a financial plan for a fiscal year of operations that matches all planned revenues and expenditures with the services provided to the residents of the City based on established budgetary policies. The City Charter establishes the City of White Settlement's fiscal year as October 1st through September 30th. Upon receipt of the proposed budget, the City Council is required to set a date and place for a public hearing. A public notice of the hearing date must be published at least ten (10) days prior to such hearing. At the hearing, the Council gives all interested persons an opportunity to be heard for, or against, any expenditure account or revenue estimate. The City Charter binds the City Council to adopt a budget prior to the beginning of the fiscal year. The City Council will normally approve the tax rate for the coming fiscal year and adopt the budget ordinance during the same meeting.


Budget Preparation


The City Manager’s Office and Finance Department performs the functions of preparing and analyzing the 2021-2022 budget. The budget process is initiated in March with distribution of budget preparation packages to department heads and directors. In May, the City Manager prepares back-up information for the City Council and schedules work sessions to discuss the direction of the budget for the upcoming fiscal year. Work sessions begin in April with the Finance Department, City Manager, and each department supervisor to review line items for both the current budget and the proposed budget to determine if service levels were to be maintained, improved, or reduced. Revenues are projected as accurately as possible in order to set priorities for proposed expenditures. Issues are addressed in workshops beginning in May between the city staff and City Council. The City Manager and Department Heads must identify and prioritize programs, projects, and equipment necessary to accomplish their goals and objectives plus those established by City Council. The budget must be developed within the limitations of available resources. Each Department Head is responsible for divisions that are under their scope of authority. Each line item of maintenance and operations are justified on budget worksheets. All capital items are separately identified and justified. The City Council retains final authority on the budget.


Property Tax Rate


A property tax rate consists of two components: a rate for funding maintenance and operations expenditures and a rate for debt service. State Property Tax law dictates certain procedures that must be followed when proposing and adopting a tax rate. The City must annually calculate and publicize its “no new revenue tax rate” and “voter approval tax rate.” The City Council may not adopt a tax rate that exceeds the lower of the voter approval tax rate or 103.5% of the no new revenue tax rate until it has held a public hearing on the proposed increase following notice to the taxpayers. The voter approval tax rate is the rate that will produce last year's maintenance and operations tax levy as adjusted from this year's value multiplied by 1.035 plus a rate that will produce this year’s debt service from this year’s values divided by the anticipated tax collection rate.


Budget Adoption


Public notices of the no new revenue tax rate are published in the local newspaper according to state law. Workshops to discuss the budget were held in June and August 2021. A public hearing on the budget was conducted according to state and local laws on August 25, 2021. The proposed Tax Rate exceeded the No New Revenue Tax Rate but was equal to the Voter Approval Tax Rate, so one public hearing was held as required by state law. A meeting of the governing body to discuss the tax rate was held August 10, 2021 at which time the Council proposed the adoption of the property tax rate that is above the No New Revenue Tax Rate but equal to the Voter Approval Tax Rate. The Fiscal Year Budget for 2021-2022 and the tax rate were adopted by the majority consent of the City Council on September 7, 2021.


Budget Amendment


Once the annual budget has been adopted, there are several methods by which the budget may be amended. In the internal form, the City Manager is authorized by the City Council to make adjustments between departments within an operating fund or line items within an operating department. Typically, these requests are generated at the department head level and submitted to the City Manager for consideration after the Finance Department has reviewed the request and recommended approval. In no case, however, may the budget adjustments result in the budgeted expenditures exceeding the lawfully adopted expenditures appropriated for the fund.


The City Council may amend the budget by ordinance during the fiscal year if such expenditures are necessary to protect public property or the health, safety, or general welfare of the citizens of White Settlement. The actual process begins in the same manner as an internal amendment, from department head submission through finance review to the City Manager. The City Manager then submits the request to the Mayor and City Council as part of a budget amendment public hearing.


Basis of Budgeting

  • Revenues are recognized in the budget period when they are earned and measurable.
  • Expenditures/Expenses are recognized in the budget period when the liability is incurred.
  • Depreciation of assets is not budgeted.
  • Capital outlay is budgeted as an expense in the year purchased.
  • Principal payments are budgeted as an expense rather than a reduction to the liability.
  • Proceeds from bond sales are budgeted as revenue.
  • Transfer of bond proceeds to the Capital Projects Fund is budgeted as an expense.

Basis of Accounting

  • Governmental and fiduciary funds are accounted for using the modified accrual basis according to Generally Accepted Accounting Principles (GAAP).
  • Revenues are recognized in the budget period when they are measurable and available.
  • Revenues subject to accrual include taxes, charges for services, and interest revenue.
  • Expenditures are recognized in the accounting period in which the liability is incurred, if measurable.
  • Capital outlays are recorded as additions to capital assets at fiscal year-end and the cost of those assets are depreciated over their estimated useful lives for the government-wide financial statements.
  • Proprietary funds are accounted for using the accrual basis according to Generally Accepted Accounting Principles (GAAP).
  • Available balances are determined using cash equivalent approach: cash + investments + accounts receivable + prepaid expenses - accounts payable = cash equivalent available.
  • Revenues are recognized in the period in which they are earned and become measurable.
  • Expenses are recognized in the period in which they are incurred and measurable.
  • Proprietary funds also record depreciation and amortization.
  • Payment of principal is recorded as a reduction to the long-term liability.