Rationale for Passing Permanent Budget in December

Have the budget in place to cover spending on January 1, rather than having to delay certain
purchases because a temporary appropriation may not cover them.

Enables department heads to better plan and implement their budgets which enhances operational
efficiencies.

Avoids the potential for price increases and for missing out on discounts / special pricing due to
having to purchase items later in the year.

Being able to effectively monitor expenditures relative to the budget during the first quarter of
the year.

Streamlines operations by allowing for the creation of one purchase order for respective goods
and services that are necessary and have generally fixed pricing, such as internet service,
memberships, subscriptions, copier maintenance, etc.
o Two purchase orders for such items would have to be generated when passing a
permanent budget later in the year: one to cover the temporary and one to cover the
permanent.

An amended appropriations ordinance can be enacted in the first quarter of the year to either
allocate additional funding or reduce expenditures depending upon the actual ending balances.
o This allows Council and staff to focus on how best to allocate the additional funds when
applicable, rather than having the discussions included with all of the other items when
passing a permanent budget after the first of the year.
o By the end of the first quarter, passing a permanent budget in December and an amended
appropriations ordinance later in the new year results in essentially the same final
budget as passing a temporary budget in December and a permanent budget in March.

Avoid spending time on developing a temporary budget, which is ultimately a meaningless

document.

The actual revenues, expenditures and fund balances from the prior year are still reported and
analyzed early in the subsequent year.

A budget serves as the Citys plan for the year and as such, is subject to change throughout the
year. Therefore, amending the budgeted revenues and expenditures is to be expected and
indicates that the City is responding to changes throughout the year.

The sitting Council passes the budget continuing the initiatives and policies that have been set.
Neophyte Council members are not required to pass a budget in their first quarter of service.

The timing of department head budget meetings may need to be revised. Commencing budget
meetings in August for the budget adopted the following year extends the budget season and
may cause more revisions to the budget.