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BUDGET PROCESS
RECOMMENDED BUDGET
PRACTICES
The City of Missoula is striving to incorporate the
recommended practices promulgated by the
National Advisory Council on State and Local
Budgeting (NACSLB) in its annual budget.
The NACSLB was created to provide tools for
governments to improve their budgeting
processes and to promote their use. The
NACSLB focuses on long-term financial planning
and encourages governments to consider the
longer consequences of actions to ensure that
impacts of budget decisions are understood over
a multi-year planning horizon and to assess
whether program and service levels can be
sustained. Practices encourage the development
of organizational goals, establishment of policies
and plans to achieve these goals, and allocation
of resources through the budget process that are
consistent with goals, policies and plans. There is
also a focus on measuring performance to
determine what has been accomplished with
scarce government resources.
Following are excerpts of the NACSLB’s budget
practice recommendations.
BUDGET DEFINITION
The budget process consists of activities that
encompass the development, implementation,
and evaluation of a plan for the provision of
services and capital assets.
A good budget process is characterized by
several essential features.
Incorporates a long-term perspective
Establishes linkages to broad goals
Focuses budgeting decisions on results
and outcomes
Involves and promotes effective
communication with stakeholders
Provides incentives to government
management and employees
These key characteristics of good budgeting
make clear that the budget process is not simply
an exercise in balancing revenues and
expenditures one year at a time, but is strategic
in nature, encompassing a multi-year financial
and operating plan that allocates resources on
the basis of identified goals. A good budget
process moves beyond the traditional concept of
line-item expenditure control, providing incentives
and flexibility to managers that can lead to
improved program efficiency and effectiveness.
MISSION OF THE BUDGET
PROCESS
The mission of the budget process is to help
decision makers make informed choices about
the provision of services and capital assets and
to promote stakeholder participation in the
process. Communication and involvement with
citizens and other stakeholders is stressed.
Communication and involvement are essential
components of every aspect of the budget
process.
PERFORMANCE BUDGETING
The City of Missoula is moving to a Performance
Budgeting approach for the development of its
annual operating budget. Performance budgets
emphasize the accomplishment of program
objectives as opposed to a description of what is
going to be purchased by the government.
Performance budgeting involves a shift away
from a debate by the City Council of what is
going to be purchased toward a debate regarding
what is going to be accomplished.
The City of Missoula is in the early stages of its
Performance Budgeting efforts. Each
department is in the process of identifying
performance objectives, identifying and tracking
workload indicators, and establishing quantifiable
performance measures. It is anticipated that it
will take 3 – 5 years to fully implement the
performance budgeting system.
FINANCIAL TREND ANALYSIS
The budget process begins in the winter with the
initial updating of the five-year financial trend
analysis for the City as a whole.
Using the latest fiscal, operational, and legislative
information, the finance office staff works
collaboratively with city departments to update
the city’s most recent financial trend analysis.
The financial trend analysis assists the City
Council and the city administration in focusing on
the “Big Picture” of the city’s financial operations.
NEEDS ASSESSMENT PHASE
Late Winter – Early Spring
Departments have an opportunity to assess
current conditions, programs, and needs.
Examination of current departmental programs or
positions for possible trade-offs, reduction, or
BUDGET PROCESS
elimination is strongly suggested. During this
phase, departments are encouraged to
thoroughly review all programs and services,
assessing their value and priority to the citizens.
At the same time, departments are asked to
submit requests for new or expanded programs.
The first proposals submitted for review are those
capital requests that fit within the City's five-year
capital improvement program.
From this process, they prepare their preliminary
departmental budgets.
BUDGET DEVELOPMENT AND
PRIORITIZATION PHASE
The Finance Department compiles and tabulates
the budgetary information submitted by the
individual departments and begins the
preparation of the preliminary budget in
cooperation with the Mayor, City Administrator
and the City's CIP and operating budget teams.
The needs of the city departments are weighed
against projected funds available and a
determination must be made as to which services
will be included in the final budget. The
operating budget includes proposed expenditures
and the means of financing them. All capital and
operating new requests are scored and ranked
by the CIP and operating budget teams.
Within the framework of the City’s financial
capacity, City Council priorities and departmental
needs assessments, budget requests are
reviewed and a preliminary City operating budget
takes shape.
The purpose of the preliminary budget is to
enable the community, stakeholders and the City
Commission to comment on a balanced budget
well before it is adopted.
CAPITAL IMPROVEMENTS
PROGRAM (CIP) AND ITS
RELATIONSHIP TO THE
OPERATING BUDGET
The City of Missoula prepares a Capital
Improvement Plan (CIP) document separate and
apart from the Annual Operating Budget. Unlike
the Annual Operating Budget, the CIP is a multi-
year capital improvements plan that forecasts,
but does not obligate, future spending for all
anticipated capital projects.
Whenever the City commits to a CIP plan, there
is an associated long-range commitment of
operating funds. For this reason, it is important to
evaluate capital commitments in the context of
their long-range operating impact. Most capital
projects affect future operating budgets either
positively or negatively due to an increase or
decrease in maintenance costs or by providing
capacity for new programs to be offered. Such
impacts vary widely from project to project and,
as such, are evaluated individually during the
process of assessing project feasibility.
The multi-year, long-range fiscal analysis also
provides an opportunity to review the operating
impact of growth-related future capital projects.
ADOPTION/IMPLEMENTATION
PHASE
Public hearings are conducted to enable citizens
and other interested parties to comment on the
proposed budget. Following the public hearings,
the City Council may modify the proposed budget
or may adopt it without changes.
The budget and the corresponding property tax
mill levy must be adopted by the 3rd Monday in
August or within 45 days of receiving certified
taxable values from the Department of Revenue.
Management control of the budget is maintained
by monthly revenue and expenditure reports,
whereby departments are able to compare actual
results to the budget throughout the fiscal year. In
addition, the Finance Director prepares quarterly
budget reviews on a city-wide basis, with
presentations to the City Council at a public
meeting. These budget reviews are aimed at
examining expenditure patterns, and
recommending corrective action to be taken
during the year.
AMENDING THE BUDGET
The City’s budget may be amended during the
course of the year, following public notice, a
public hearing, and a majority vote of the City
Council. The requesting department is
responsible for preparing the budget amendment
and supporting documents. The proposed
amendment and supporting documents are
reviewed by the Finance Department for
accuracy and completeness. After Finance
reviews and approves the amendment, a budget
amendment resolution is drafted and presented
along with the amendment and supporting
documents to the City Council at a duly noticed
public meeting.
The amendment, supporting documents and
drafted resolution is presented to the Council for
BUDGET PROCESS
The Finance Department prepares year-end
working capital (cash), estimates revenue for the
coming year, and adjusts current year budget to
project next year’s needs.
The City Council continues to take comment on the
budget at the public hearings which are held open
until the budget is adopted.
Information is presented to the City Administration
and Budget Team.
The tax levies are estimated and proposed based
on reasonable assumptions concerning the
economy.
The Capital Improvement Program is initiated for
next fiscal year with a press release notifying the
public and a workshop scheduled for all City
supervisory staff.
The City Council adopts the budget resolution
setting the appropriations.
The Finance Department analyses and
assimilates proposed capital improvement project
(CIP) revenues and expenditures.
A Budget/CIP workshop is held with all supervisory
staff.
Revenue estimates are made along with salary
adjustment parameters and costs for all budgets.
The CIP Budget Team meets with all Departments
that submitted a CIP request and reviews the
scoring of all requests.
Final budget documents are published on the City
website either in August or September.
The Preliminary CIP Budget is referred to the
Missoula City Council A&F committee to review all
new requests approved for inclusion.
Tax levies are set based on the receipt of taxable
value certification from the State Department of
Revenue.
The Operating Budget Team meets with all City
Departments. All funding streams are reviewed
and requests are discussed.
On–going review and monitoring of current year
budget.
The A&F committee continues to review the new
CIP requests weekly until completed.
On-going review and monitoring of current year
budget.
The Mayor and Budget Team continue meeting with
Department Heads and staff to discuss the
proposed preliminary budget.
Preparations are made for the coming year.
Budget appeals are heard by the Mayor, CAO and
Finance Officer.
On-going review and monitoring of the current year
budget.
The preliminary budget is referred to the Missoula
City Council Budget Committee of the Whole for
discussion. Public Hearings are scheduled.
Preparations are made for the coming year.
The preliminary budget is presented and the
Budget Committee of the Whole begins meeting
weekly with City departments and outside agencies
who are requesting funding.
On-going review and monitoring of the current year
budget.
Preparations are made for the coming year.
On-going review and monitoring of the current
year budget.
Finance Department updates preliminary budget
as needed.
Preparations are made for the coming year
September
October
April
November
December
May
The public hearing is kept open until the budget is
adopted in June.
March August
THE BUDGET TIMELINE
January June
February July
Waiting to receive final tax values from the State
Department of Revenue.
CITIZENS
OF THE
CITY OF MISSOULA
MAYOR
MISSOULA CITY
COUNCIL
DENOTES
ELECTED
OFFICIALS
BOARDS &
COMMISSIONS
CHIEF
ADMINISTRATIVE
OFFICER
HEALTH
DEPARTMENT
MISSOULA
REDEVELOPMENT
AGENCY
PARKING
COMMISSION
REDEVELOPMENT,
HOUSING &
ECONOMIC
DEVELOPMENT
MISSOULA
CEMETERY
PARKS AND
RECREATION
PUBLIC
WORKS
POLICE
DEPARTMENT
FIRE
DEPARTMENT
CENTRAL
SERVICES
FACILITY &
VEHICLE
MAINTENANCE
FINANCE/
TREASURER
CITY
CLERK
HUMAN
RESOURCES
INFORMATION
TECHNOLOGIES
PARK
MAINTENANCE
URBAN
FORESTRY
AQUATICS
STREET
DIVISION
COMM/SIGNAL
SHOP
WASTEWATER
TREATMENT
FACILITY
ADMINISTRATION
PATROL
DIVISION
DETECTIVE
DIVISION
MUNICIPAL
COURT JUDGE
MUNICIPAL
COURT
FY1 7 Citizens of The City of Missoula
DEVELOPMENT
SERVICES
ENGINEERING
BUILDING
DIVISION
PLANNING
TRANSPORTATION
PERMITS AND
LAND USE
CODE
COMPLIANCE
OPERATIONS
ADMINISTRATION
CITY
ATTORNEY
PROSECUTING
CIVIL
MAYORAL
SUPPORT
FACILITIES
MAINTENANCE
HOUSING &
COMMUNITY
DEVELOPMENT
ECONOMIC
DEVELOPMENT
BUDGET PROCESS BUDGET INCREASES
Non-Budgeted
Medium -Not Low -Not One-Tim e Ongoing Revenues
Departm ent Ranking Am ount High-Funded Funded Funded Costs Costs Funded
Fire:
ROCO Training 1 10,000 - 10,000 - 10,000 - -
Reimbursed Overtime N/A-1 628,912 628,912 - - 628,912 - 628,
Sub-total 638,912 628,912 10,000 - 638,912 - 628,
Cem etery:
Overtime increase for S&S 1 2,500 - 2,500 - 2,500 - -
Plotter 2 5,000 5,000 - - 5,000 - 5,
Sub-total 7,500 5,000 2,500 - 7,500 - 5,
Grants and Com m unity Program :
GCP COLA & Benefits 1 4,109 4,109 - - - 4,109 4,
Sub-total 4,109 4,109 - - - 4,109 4,
City/County Health Departm ent
Health Dept. - COLA 1 64,640 64,640 - - - 64,640 64,
Animal Control - COLA 2 16,359 16,359 - - - 16,359 16,
Add Animal Control Officer 3 78,309 29,107 49,202 - 35,500 42,809 29,
Smart phones for Field Professionals 4 7,987 - 7,987 - - 7,987 -
Sub-total 167,295 110,106 57,189 - 35,500 131,795 110,
Non-Departm ental
Director - Housing Office 1 52,000 52,000 - - 52,000 52,
Skill/Competency Based Pay 2 67,964 67,964 - - 67,964 67,
Minimum Wage Initiative 3 1,725 1,725 - - 1,725 1,
Sub-total 121,689 121,689 - - - 121,689 121,
Com m unity Based Organizations
BREDD 30,000 - 30,000 - 30,000 - -
Fourth D Club 12,000 - 12,000 - 12,000 - -
International Choir Festival 12,000 12,000 - - 12,000 - 12,
Missoula Cultural Council 116,000 116,000 - - 116,000 - 116,
CDRC 7,200 7,200 - - 7,200 - 7,
City Band 5,880 5,880 - - 5,880 - 5,
Community Service 68,400 68,400 - - 68,400 - 68,
MRTMA 10,780 10,780 - - 10,780 - 10,
Volunteer Missoula 10,000 10,000 - - 10,000 - 10,
Partnership Health Center 42,532 42,532 - - 42,532 - 42,
Neighborhood Ambassador 10,000 10,000 - - 10,000 - 10,
Missoula Economic Partnership 100,000 100,000 - - 100,000 - 100,
Sub-total 424,792^ 382,792^ 42,000^ -^ 424,792^ -^ 382,
1241 Cem etery Crem ain Wall
Columbarium Cremation Wall 1 90,000 90,000 - - 90,000 - 90,
Sub-total 90,000^ 90,000^ -^ -^ 90,000^ -^ 90,
1242 Cem etery Care Fund
Mow er 1 45,000 45,000 - - 45,000 - 45,
Plotter 2 15,000 15,000 - - 15,000 - 15,
Sub-total 60,000^ 60,000^ -^ -^ 60,000^ -^ 60,
1219 Fort Missoula Regional Park:
Operations 1 294,707 - - - - 294,707 73,
Recreation 2 131,815 - - - - 131,815 95,
Sub-total 426,522 - - - - 426,522 168,
General Fund & General Fund Special Total 2,826,013 2,139,149 260,342 - 1,689,481 1,136,532 2,257,
REQUESTED AND FUNDED OPERATING BUDGET INCREASES (Cont'd)
General Fund
General Fund Special
BUDGET PROCESS BUDGET INCREASES
Non-Budgeted
Medium -Not Low -Not One-Tim e Ongoing Revenues
Departm ent Ranking Am ount High-Funded Funded Funded Costs Costs Funded
Road District 1:
Special Services 1 1,543 - 1,543 - 1,543 - 1,
Pavement Assessment 2 150,000 - 150,000 - 75,000 75,000 150,
Labor/Operators 3 62,330 23,374 38,956 - - 62,330 62,
ADA Ramps & Sidew alks 4 140,000 - 140,000 - - 140,000 140,
Street Lights Maintenance 5 30,000 - 30,000 - - 30,000 30,
South Ave ROW Litigation 415,156 91,949 323,207 - 323,207 91,949 91,
Sub-total 799,029^ 115,323^ 683,706^ -^ 399,750^ 399,279^ 475,
Park District 1:
Business Manager 1 80,631 80,631 2,265 78,366 10,
Conservation Lands Trailhead & Trails 2 24,829 15,000 9,829 - - 24,829 24,
G & H Supplies and Contracts 3 80,073 20,000 60,073 - - 80,073 20,
New Playground Maintenance 4 19,530 - 19,530 - 14,000 5,530 19,
Urban Forestry Staffing 5 85,631 39,301 46,330 - 85,631 39,
Park Asset Management Staffing 6 11,015 - 11,015 - - 11,015 -
Community Service Specialist 7 114,947 - 114,947 - 54,827 60,120 -
Park Master Plan Update 8 80,000 80,000 80,000 16,
City-w ide Safety Committee Support 9 6,330 6,330 - 6,330 -
Sub-total 502,986 74,301 428,685 - 151,092 351,894 129,
Wastew ater:
WWTP New sletter 1 5,000 5,000 - - - 5,000 5,
Treatment Operating Supplies N/A-1 100,000 100,000 - - - 100,000 100,
Lab Testing N/A-2 8,700 8,700 - - - 8,700 8,
Sub-total 113,700 113,700 - - - 113,700 113,
Parking Com m ission:
Meter Upkeep 1 122,870 - 122,870 - - 122,870 122,
Grants & Contributions 2 11,000 - 11,000 - - 11,000 11,
Sub-total 133,870 - 133,870 - - 133,870 133,
Non-General Fund Total 1,549,585 303,324 1,246,261 - 550,842 998,743 853,
Grand Total - All Funds $ 4,375,598 $ 2,442,473 $ 1,506,603 $ - $ 2,240,323 $ 2,135,275 $ 3,110,
REQUESTED AND FUNDED OPERATING BUDGET INCREASES (Cont'd)
NON-GENERAL FUND REQUESTS
PROJECTED ESTIMATED COMMITTED OTHER FY17 MILL LEVY FY16 MILL LEVY PERCENTAGE BUDGETED INTER-FUND END-OF-YEAR TOTAL FUNDS BEGINNING EXPENDITURE NON-TAX INTER-FUND PROPERTY TAX TOTAL SOURCES MILL VALUE = MILL VALUE = CHANGE # FUND NAME EXPENDITURES TRANSFERS OUT FUND BALANCE REQUIRED FUND BALANCE SAVINGS REVENUES TRANSFERS IN REQUIREMENTS OF FUNDS 113,132 108,677 FY16 TO FY
ENTERPRISE FUNDS 5020 CIVIC STADIUM 118,723 - 1,277 120,000 - - 120,000 - - 120,000 - -
SEWER ENTERPRISE FUNDS 5310 SEWER OPERATING BUDGET 5,552,456 - - 5,552,456 - - 86,384 5,466,072 - - - 5311 SEWER REVENUE COLLECTION & CLEARING - 7,963,568 - 7,963,568 - - 7,963,568 - - - - 5315 SEWER LOAN 20,000 - 20,000 20,000 - - - - - - 5320 SEWER REPLACEMENT & DEPRECIATION 1,836,708 - 619,710 2,456,418 740,000 - 1,300,000 416,418 - - - 5325 SEWER DEVELOPMENT FEE 1,118,994 - 330,000 1,448,994 330,000 - 1,118,994 - - - - 5340 SEWER CONSTRUCTION 2,517,966 - - 2,517,966 - - 2,517,966 - - - - 5361 01 SEWER REVENUE BONDS DEBT SERVICE 30,480 - - 30,480 - - - 30,480 - - - 5362 00 SEWER REVENUE BONDS -SERIES B DEBT SERVICE 48,480 - - 48,480 - - - 48,480 - - - 5365 99 SEWER REVENUE BONDS DEBT SERVICE 123,600 - - 123,600 - - - 123,600 - - - 5368 00 SEWER REVENUE BOND RESERVE - - 49,030 49,030 49,030 - - - - - - 5369 01 SEWER REVENUE BONDS SERIES BOND RESERVE - 270 31,050 31,320 31,320 - - - - - - 5370 99 SEWER REVENUE BOND RESERVE - - 124,060 124,060 124,060 - - - - - - 5371 02 SEWER REVENUE BONDS DEBT SERVICE 84,420 - 84,420 - - - 84,420 - - - 5372 02 SEWER REVENUE BONDS RESERVE - - 85,260 85,260 85,260 - - - - - - 5373 02 SEWER REVENUE BONDS DEBT SERVICE-WWTP upgrade 330,810 - 330,810 - - - 330,810 - - - 5374 02 SEWER REVENUE BONDS RESERVE-WWTP upgrade - - 331,740 331,740 331,740 - - - - - - 5375 03 SEWER REVENUE BONDS DEBT SERV.-3.8M SRF Loan 250,156 - 250,156 - - - 250,156 - - - 5376 03 SEWER REVENUE BONDS RESERVE-3.8M SRF Loan - - 251,319 251,319 251,319 - - - - - - 5377 04 SEWER REVENUE BONDS DEBT SERV.-3.023M SRF Loan 243,416 - 243,416 - - - 243,416 - - - 5378 04 SEWER REVENUE BONDS RESERVE-3.023M SRF Loan - - 243,723 243,723 243,723 - - - - - - 5379 05 BIRCH/BRDY/LIN/GIL SRF BOND DEBT SERV. 109,451 - 109,451 - - - 109,451 - - - 5380 05 BIRCH/BRDY/LIN/GIL SRF BOND RESERVE - - 110,026 110,026 110,026 - - - - - - 5383 10 LOLO ST SRF BOND DEBT SERVICE-NON ARRA 30,350 - - 30,350 - - - 30,350 - - - 5384 10 LOLO ST SRF BOND DEBT SERVICE-NON ARRA RESERVE - - 31,440 31,440 31,440 - - - - - - 5385 10 MSLA HEADWORKS RESERVE - - 925,360 925,360 925,360 - - - - - - 5386 10 MSLA HEADWORKS DEBT SERVICE 698,099 - 256,273 954,372 256,273 - 251,145 446,954 - - - 5387 11 SEWER $1.29 M BOND DEBT SERVICE 100,380 - - 100,380 - - - 100,380 - - - 5388 11 MSLA SEWER REVENUE BOND RESERVE - - 113,025 113,025 113,025 - - - - - - 5389 15 SEWER REVENUE BOND DEBT SERVICE 62,063 - - 62,063 - - - 62,063 - - - 5390 15 SEWER REVENUE BOND RESERVE - - 62,575 62,575 62,238 - - 337 - - - 5391 16 SEWER REVENUE BOND DEBT SERVICE (NEW) 170,238 - - 170,238 - - - 170,238 - - - 5392 16 SEWER REVENUE BOND RESERVE (NEW) - - 268,969 268,969 - - 268,969 - - - - SEWER ENTERPRISE FUND SUBTOTALS 13,328,067 7,963,838 3,833,560 25,125,465 3,704,814 - 13,507,026 7,913,625 - 25,125,465 - -
5711 AQUATICS 1,263,758 - 222,518 1,486,276 198,551 - 1,084,725 203,000 - 1,486,276 - -
TOTAL ENTERPRISE FUND SUBTOTALS 14,710,548 7,963,838 4,057,355 26,731,741 3,903,365 - 14,711,751 8,116,625 - 26,731,741 - -
6050 EMPLOYEE BENEFIT PLAN 6,137,237 - 1,058,885 7,196,122 1,031,622 - 5,722,500 442,000 - 7,196,122 - -
PROPRIETARY FUNDS SUBTOTALS 20,847,785 7,963,838 5,116,240 33,927,863 4,934,987 - 20,434,251 8,558,625 - 33,927,863 - -
TOTALS FOR CITY BUDGETED FUNDS 95,094,136^ 16,480,125^ 17,596,075^ 129,170,336^ 20,391,363^ 1,550,000^ 58,382,845^ 16,480,125 -^ 32,366,003^ 129,170,336^ 286.10^ 275.54^ 3.83%
7370 PARKING COMMISSION OPERATING 1,653,874 309,510 389,306 2,352,690 410,000 - 1,942,690 - - - - 7371 INTEREST FUND SERIES 2010B BONDS 266,220 - - 266,220 - - - 266,220 - - - 7372 SINKING FUND SERIES 2010B BONDS 250,000 - - 250,000 - - - 250,000 - - - 7375 PLEDGED TIF SERIES 2010 B BONDS - 266,851 - 266,851 - - - 266,851 - - - PARKING SUBTOTAL 2,170,094 576,361 389,306 3,135,761 410,000 1,942,690 783,071 - 3,135,761 - -
7380 BUSINESS IMPROVEMENT DISTRICT 431,315 - 113,007 544,322 175,000 - 369,322 - - 544,322 - - 7381 TOURISM BUSINESS IMPROVEMENT DISTRICT 296,713 - - 296,713 - - 296,713 - - 296,713 - -
7383 MRA - RIVERFRONT TRIANGLE URD 36,962 - - 36,962 27,646 - 9,316 - - - - 7384 N RESERVE SCOTT STREET CLEARING 59,452 - 59,452 - - 59,452 - - - - 7385 MRA - FRONT ST URD 629,034 - 1,950 630,984 560,748 - 70,236 - - - 7386 MRA- URD II - SAFEWAY 127,012 - 63,526 190,538 63,526 - - 127,012 - - - 7387 MRA URD II- REVOLVING LN FD 54,716 - - 54,716 - - - 54,716 - - - 7388 MRA TAX INCREMENT BOND RESERVE - - 675,665 675,665 675,665 - - - - - - 7389 MRA TAX INCREMENT DEBT SERVICE 676,312 - 113 676,425 113 - - 676,312 - - - 7390 MRA TAX INCREMENT DEBT SERVICE CLEARING - 2,125,154 - 2,125,154 - - 2,125,154 - - - - 7392 MRA- URD II 2,211,766 250,000 - 2,461,766 1,340,589 - - 1,121,177 - - - 7393 MRA- URD III 15,790,455 - 283,668 16,074,123 7,322,385 - 7,100,000 1,651,738 - - - 7394 MRA TAX INCREMENT BOND CLEARING 1,744,938 - 1,744,938 - 1,744,938 - - - - 7395 MRA TAX INCREMENT DEBT SERVICE 343,200 - - 343,200 - - 343,200 - - - 7396 MRA TAX INCREMENT DEBT SERVICE 31,690 - - 31,690 - - 31,690 - - - 7397 MRA - N RESERVE/SCOTT ST 27,762 - - 27,762 - - 27,762 - - - 7399 MRA URD II INTERMOUNTAIN BOND - SERIES 2013-new 145,937 7,690 153,627 7,690 - - 145,937 - - - 7400 MRA TAX INCREMENT FRONT STREET URD BOND CLEARING - 616,443 - 616,443 - - 616,443 - - - - 7401 MRA TAX INCREMENT FRONT ST. BOND -PARKING STRUCTURE 206,340 - 214,656 420,996 212,706 - - 208,290 - - - 7402 MRA TAX INCREMENT FRONT ST. BOND -SUB. LIEN NOTE 131,161 - 86,017 217,178 85,971 - - 131,207 - - - MRA SUBTOTAL 20,412,347 4,795,987 1,333,285 26,541,619 10,297,039 - 11,655,303 4,589,277 - 26,541,619 - - COMPONENT UNIT TOTALS 23,310,469 5,372,348 1,835,598 30,518,415 10,882,039 - 14,264,028 5,372,348 - 30,518,415 - -
TOTALS FOR ALL BUDGETED FUNDS 118,404,605^ 21,852,473^ 19,431,673^ 159,688,751^ 31,273,402^ 1,550,000^ 72,646,873^ 21,852,473^ 32,366,003^ 159,688,751^ 286.10^ 275.54^ 3.83%
CITY OF MISSOULA - FY 17 BUDGET SOURCES & USES OF FUNDS & MILL LEVY CALCULATION
PROPOSED USES OF FUNDS PROPOSED SOURCES OF FUNDS PROPOSED MILL LEVIES
MISSOULA REDEVELOPMENT AGENCY FUNDS
PROPRIETARY FUNDS
INTERNAL SERVICE FUNDS
COMPONENT UNITS - CITY OF MISSOULA
PARKING COMMISSION FUNDS
FY 2015 FY 2016 FY 2017 Budget
Actual Actual Budget Increase (Decr)
Taxes and Assessments $ 35,900,213 $ 38,018,694 $ 35,797,646 $ (2,221,048)
Licenses and Permits 3,664,808 3,849,635 3,691,820 (157,815)
Intergovernmental 11,380,145 10,981,580 12,352,862 1,371,
State Entitlement 8,759,542 8,986,238 8,327,658 (658,580)
Charges for Services 17,868,248 17,823,094 19,498,641 1,675,
Fines and Forfeitures 1,460,480 1,704,692 2,037,627 332,
Miscellaneous 1,152,285 1,800,315 7,432,395 5,632,
Investment Earnings 138,810 13,238 73,500 60,
Transfer In/Other Financing 16,358,856 37,789,746 47,918,484 10,128,
Total City Revenues $ 96,683,387 $ 120,967,232 $ 137,130,633 $ 16,163,
FY 2015 FY 2016 FY 2017 Budget
Actual Actual Budget Increase (Decr)
General Government $ 10,202,822 $ 10,871,079 $ 12,173,677 $ 1,302,
Public Safety 28,117,822 29,122,337 31,166,373 2,044,
Public Works 24,261,826 20,157,285 16,341,740 (3,815,545)
Public Health 1,644,431 1,706,945 1,754,519 47,
Social & Economic Services 210,000 175,000 175,000 -
Culture and Recreation 6,350,712 6,556,870 8,069,161 1,512,
Housing and Community Develop 2,389,831 4,434,504 16,188,875 11,754,
Debt Service 5,532,707 818,567 11,391,016 10,572,
Internal Service 6,426,785 8,324,764 93,500 (8,231,264)
Capital Outlay 8,477,784 8,422,503 13,609,169 5,186,
Transfer Out/Other Financing 9,047,694 23,337,323 29,294,048 5,956,
Total City Expenditures $ 102,662,414 $ 113,927,177 $ 140,257,078 $ 1,090,
Taxes and
Assessments
Licenses and
Permits
Intergovernmental
State Entitlement
6.07% Charges for Services
Fines and
Forfeitures
Miscellaneous
Investment Earnings
Transfer In/Other
Financing
ALL CITY - WHERE THE MONEY COMES FROM - FY 2017
General Government
Public Safety
Public Works
Public Health
Social & Economic
Services
Culture and
Recreation
Housing and
Community Develop
Debt Service
Capital Outlay
Transfer Out/Other
Financing
ALL CITY - WHERE THE MONEY GOES - FY 2017
FY 2015 FY 2016 FY 2017 Budget
Actual Actual Budget Increase (Decr)
General Purpose Revenue $ 30,821,023 $ 32,227,896 $ 34,098,169 $ 1,870,
General Government 940,901 1,001,638 1,050,368 48,
Police & Court 4,218,005 4,448,897 4,686,817 237,
Fire Department 2,696,872 2,876,419 3,013,526 137,
Community Development 1,062,743 1,015,008 1,124,757 109,
Administrative Services 8,061,090 8,130,808 8,760,219 629,
Public Works 1,869,689 1,994,227 2,089,252 95,
Park & Recreation 604,413 730,099 720,645 (9,454)
FY 2015 FY 2016 FY 2017 Budget
Actual Actual Budget Increase (Decr)
General Purpose Expenditures $ 4,458,711 $ 4,358,619 $ 4,504,168 $ 145,
General Government 888,331 849,914 937,074 87,
Police & Court 15,241,400 15,821,105 17,161,284 1,340,
Fire Department 12,235,563 12,702,810 13,266,138 563,
Community Development 149,985 170,030 809,363 639,
Administrative Services 6,557,875 6,968,904 8,019,903 1,050,
Public Works 6,238,135 6,877,751 7,220,837 343,
Park & Recreation 4,452,663 5,041,370 5,645,294 603,
General Purpose
Revenue
General Government
Police & Court
Fire Department
Community
Development
Administrative
Services
Public Works
Park & Recreation
FY 2017 GENERAL FUND REVENUES BY SUB-FUND
General Purpose
Expenditures
General Government
Police & Court
Fire Department
Community
Development
Administrative
Services
Public Works
Park & Recreation
FY 2017 GENERAL FUND EXPENDITURES BY SUB-FUND
FINANCIAL POLICIES
The City of Missoula has an important responsibility to its citizens to carefully account for public funds,
manage city finances wisely, manage growth, and plan for the adequate funding of services desired by the
public, including the provision and maintenance of public facilities. As Missoula continues to grow at a
record pace, its government needs to insure that it is capable of adequately funding and providing those
local government services the citizens require. The following fiscal and budgetary policies are designed to
meet these goals.
The overall goal of the city's fiscal policy is to establish and maintain effective management of the city's
financial resources. Formal policy statements and major objectives provide the foundation for achieving this
goal. Accordingly, this section outlines the policies used in guiding the preparation and management of the
city's overall budget and the major objectives to be accomplished.
Financial policies are guidelines for operational and strategic decision making related to financial matters.
Financial policies identify acceptable and unacceptable courses of action, establish parameters in which the
government can operate, and provide a standard against which the government's fiscal performance can be
judged.
The following City financial policies, endorsed by the City Council, establish the framework for the City of
Missoula’s overall fiscal planning and management. They set forth guidelines against which current
budgetary performance can be measured. The City of Missoula’s financial policies show the credit rating
industry and prospective investors (bond buyers) the City’s commitment to sound financial management and
fiscal integrity. The financial policies also improve the City’s fiscal stability by helping City officials plan fiscal
strategy with a consistent approach. Adherence to adopted financial policies promotes sound financial
management, which can lead to improvement in City bond ratings and lower cost of capital. The City is in
compliance with the comprehensive financial policies in this budget.
OPERATING BUDGET POLICIES
Links to Financial Plans
1) Five-Year Plan. The City of Missoula’s
annual budget will be developed in
accordance with the policies and priorities
set forth in the five year strategic financial
plan, Council goals, the needs of the city,
and state and federal laws. Program/project
priorities and service levels will be
established by the aforementioned plans.
Scope.
1) Comprehensive Budget. A comprehensive
annual budget will be prepared for all funds
expended by the city. State law (7-6-4005),
states that “Local government officials may
not make a disbursement or an expenditure
or incur an obligation in excess of the total
appropriations for a fund.” Inclusion of all
funds in the budget enables the council, the
administration, and the public to consider all
financial aspects of city government when
preparing, modifying, and monitoring the
budget, rather than deal with the city's
finances on a "piece meal" basis.
2) Competing Requests. The budget process
is intended to weigh all competing requests
for City resources, within expected fiscal
constraints. Requests for new, ongoing
programs made outside the budget process
will be discouraged.
3) Understandable. The budget will be
prepared in such a manner as to facilitate its
understanding by citizens and elected
officials. One of the stated purposes of the
budget is to present a picture of the city
government operations and intentions for the
year to the citizens of the City of Missoula.
Presenting a budget document that is
understandable to the citizens furthers the
goal of effectively communicating local
government finance issues to both elected
officials and the public.
4) Budgetary Emphasis. Budgetary emphasis
will focus on providing those basic
government services which provide the
maximum level of services, to the most
citizens, in the most cost effective manner,
with due consideration being given to all
costs--economic, fiscal, and social.
Adherence to this basic philosophy provides
the citizens of the City of Missoula
assurance that its government and elected
officials are responsive to the basic needs of
the citizens and that its government is
operated in an economical and efficient
manner.
FINANCIAL POLICIES
expenditure obligations which may be
unfunded in future years. Using one-time
revenues to fund capital assets or other non-
recurring expenditures better enables future
administrations and council’s to cope with
the financial problems when these revenue
sources are discontinued, since these types
of expenditures can more easily be
eliminated.
User Fees.
1) Cost-Effective. User fees will be collected
only if the city finds it cost-effective and
administratively feasible to do so. User fees
are often costly to administer. Prior to
establishing user fees, the costs to establish
and administer the fees will be considered in
order to provide assurance that the city's
collection mechanisms are being operated in
an efficient manner.
2) Beneficiary Populations. User fees and
charges will be used, as opposed to general
taxes, when distinct beneficiary populations
or interest groups can be identified. User
fees and charges are preferable to general
taxes because user charges can provide
clear demand signals which assist in
determining what services to offer, their
quantity, and their quality. User charges are
also more equitable, since only those who
use and benefit from the service must pay--
thereby eliminating the subsidy provided by
nonusers to users, which is inherent in
general tax financing.
3) Community - Wide Versus Special Benefit.
The level of user fee cost recovery should
consider the community-wide versus special
service nature of the program or activity.
The use of general-purpose revenues is
appropriate for community-wide services,
while other user fees are appropriate for
services that are of special benefit to
identified individuals or groups.
4) General. The following general concepts will
be used in developing and implementing
service charges and user fees:
Revenues should not exceed the
reasonable cost of providing the service.
Cost recovery goals should be based on
the total cost of delivering the service,
including direct costs, departmental
administration costs and organization-
wide support costs such as accounting,
personnel, information technology, legal
services, fleet maintenance, and
insurance.
The method of assessing and collecting
fees should be as simple as possible in
order to reduce the administrative cost
of collection.
Rate structures should be sensitive to
the “market” for similar services as well
as to smaller, infrequent users of the
service.
A unified approach should be used in
determining cost recovery levels for
various programs based on the factors
discussed above.
EXPENDITURE POLICIES
Maintenance of Capital Assets.
Capital Assets. The budget will provide for
adequate maintenance of capital, plant, and
equipment and for their orderly replacement.
All governments experience prosperous
times as well as periods of economic
decline. In periods of economic decline,
proper maintenance and replacement of
capital, plant, and equipment is generally
postponed or eliminated as a first means of
balancing the budget. Recognition of the
need for adequate maintenance and
replacement of capital, plant, and equipment,
regardless of the economic conditions, will
assist in maintaining the government's
equipment and infrastructure in good
operating condition.
RESERVE POLICIES
Unreserved Fund Balance.
1) General Fund. An undesignated general
fund reserve will be maintained by the city.
The undesignated reserve will be used for:
cash flow purposes, equipment acquisition
and replacement, and to enable the city to
meet unexpected expenditure demands or
revenue shortfalls. The City will focus on
attaining and maintaining a fund balance
equal to 7% of the General Fund's budget.
2) Enterprise Funds. Enterprise Fund
Reserves will be maintained to meet four
objectives: (1) ensure adequate funding for
operations; (2) to ensure infrastructure repair
FINANCIAL POLICIES
and replacement; (3) to provide working
capital to provide level rate change for
customers; and, (4) to maintain the legally
required coverage for outstanding revenue
bond debt.
3) Insurance Funds. Self-Insurance Reserves
will be maintained at a level, which, together
with purchased insurance policies, will
adequately indemnify the City’s property,
liability, and health benefit risk. The City will
focus on attaining and maintaining a fund
balance equal to three months of claims
experience for the City's health plan
insurance budget.
4) Required Reserves. Reserves will be
established for funds which are not available
for expenditure or are legally segregated for
a specific use, in accordance with
Governmental Accounting and Financial
Reporting Standards (GAFR). The City’s
policy is to manage and account for its
financial activity in accordance with
Generally Accepted Accounting Principles
(GAAP), as set forth by the Governmental
Accounting Standards Board (GASB). This
policy is consistent with GASB requirements.
Utilizing Unreserved Fund Balances.
1) Spending Reserves. On-going
expenditures will be limited to levels which
can be supported by current revenues.
Utilization of reserves to fund on-going
expenditures will produce a balanced
budget, however, this practice will eventually
cause severe financial problems. Once
reserve levels are depleted, the city would
face elimination of on-going costs in order to
balance the budget. Therefore, the funding
of on-going expenditures will be limited to
current revenues.
CAPITAL IMPROVEMENT
POLICIES
CIP Formulation.
1) CIP Purpose. The purpose of the CIP is to
systematically plan, schedule, and finance
capital projects to ensure cost-effectiveness
as well as conformance with established
policies. The ClP is a five-year plan
organized into the same functional groupings
used for the operating programs. The ClP
will reflect a balance between capital
replacement projects that repair, replace or
enhance existing facilities, equipment or
infrastructure; and capital facility projects
that significantly expand or add to the City’s
existing fixed assets.
2) CIP Criteria. Construction projects and
capital purchases of $5,000 or more will be
included in the Capital Improvement Plan
(CIP) as long as the useful life of the asset
exceeds five years; minor capital outlays of
less than $5,000 will be included in the
regular operating budget. Vehicles intended
for use on streets and highways, costing less
than $35,000, are not included in the CIP.
The Capital Improvement Plan (CIP)
differentiates the financing of high cost long-
lived physical improvements from low cost
"consumable" equipment items contained in
the operating budget. CIP items may be
funded through debt financing or current
revenues while operating budget items are
annual or routine in nature and should only
be financed from current revenues.
3) Deteriorating Infrastructure. The capital
improvement plan will include, in addition to
current operating maintenance expenditures,
adequate funding to support repair and
replacement of deteriorating infrastructure
and avoidance of a significant unfunded
liability.
Project Financing.
1) Minor Capital Projects. Minor capital
projects or recurring capital projects, which
primarily benefit current residents, will be
financed from current revenues. Minor
capital projects or recurring capital projects
represent relatively small costs of an on-
going nature, and therefore, should be
financed with current revenues rather than
utilizing debt financing. This policy also
reflects the view that those who benefit from
a capital project should pay for the project.
2) Major Capital Projects. Major capital
projects, which benefit future residents, will
be financed with other financing sources
(e.g. debt financing). Major capital projects
represent large expenditures of a non-
recurring nature which primarily benefit
future residents. Debt financing provides a
means of generating sufficient funds to pay
for the costs of major projects. Debt
financing also enables the costs of the
project to be supported by those who benefit
from the project, since debt service
payments will be funded through charges to
future residents.
FINANCIAL POLICIES
will enable the city to prepare its financial
statements in accordance with Generally
Accepted Accounting Principles as set forth
by the Governmental Accounting Standards
Board. The basis of accounting is the same
for both the budget and the financial
statements. It is worth noting that
depreciation is not budgeted. Likewise, debt
principle is budgeted for but is reported as a
reduction of liability for the proprietary funds
on the financial statements at year end.
Financial Report. The City of Missoula will
prepare an Annual Financial Report (AFR) in
conformity with Generally Accepted
Accounting Principles (GAAP). The report
will be made available to the general public.
Audits. An annual audit will be performed by an
independent public accounting firm, with an
audit opinion to be included with the City’s
published Annual Financial Report (AFR).
Audits of the city’s financial records provide
the public assurance that its funds are being
expended in accordance with Local, State,
and Federal law and in accordance with
Generally Accepted Accounting Principles.
Audits also provide management and the
Council with suggestions for improvement in
its financial operations from independent
experts in the accounting field.
INVESTMENT POLICIES
Scope
This policy applies to the investment of short-
term operating funds. Proceeds from certain
bond issues will be covered by a separate policy.
Pooling of Funds. Except for cash in certain
restricted and special funds, the City of
Missoula will consolidate cash balances from
all funds to maximize investment earnings.
Investment income will be allocated to the
various funds based on their respective
participation and in accordance with
generally accepted accounting principles.
General Objectives. The primary objectives, in
priority order, of investment activities shall be
safety, liquidity, and yield:
Safety. Safety of principal is the foremost
objective of the investment program.
Investments shall be undertaken in a
manner that seeks to ensure the
preservation of capital in the overall
portfolio. The objective will be to
mitigate credit risk and interest rate risk.
a. Credit Risk
The City of Missoula will
minimize credit risk, the risk of
loss due to the failure of the
security issuer or backer, by:
i. Limiting investments to the
safest types of securities
ii. Pre-qualifying the financial
institutions, broker/dealers,
intermediaries, and
advisers with which the
City of Missoula will do
business
iii. Diversifying the
investment portfolio so that
potential losses on
individual securities will be
minimized.
b. Interest Rate Risk
The City of Missoula will
minimize the risk that the
market value of securities in
the portfolio will fall due to
changes in general interest
rates, by structuring the
investment portfolio so that
securities mature to meet cash
requirements for ongoing
operations, thereby avoiding
the need to sell securities on
the open market prior to
maturity and by investing
operating funds primarily in
shorter-term securities, money
market mutual funds, or similar
investment pools.
Liquidity. The investment portfolio shall remain
sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
This is accomplished by structuring the portfolio
so that securities mature concurrent with cash
needs to meet anticipated demands (static
liquidity). Furthermore, since all possible cash
demands cannot be anticipated, the portfolio
should consist largely of securities with active
secondary or resale markets (dynamic liquidity).
A portion of the portfolio also may be placed in
money market mutual funds or local government
investment pools, which offer same-day liquidity
for short-term funds.
Yield. The investment portfolio shall be designed
with the objective of attaining a market rate of
return throughout budgetary and economic
cycles, taking into account the investment risk
constraints and liquidity needs. Return on
investment is of secondary importance compared
to the safety and liquidity objectives described
above. The core of investments are limited to
relatively low risk securities in anticipation of
FINANCIAL POLICIES
earning a fair return relative to the risk being
assumed. Securities shall not be sold prior to
maturity with the following exceptions:
a. A security with declining credit may
be sold early to minimize loss of principal.
b. A security swap would improve the
quality, yield, or target duration in the portfolio.
c. Liquidity needs of the portfolio
require that the security be sold.
Other areas. The complete investment policy,
which is provided in detail in the appendix, also
addresses standards of care, ethics and conflicts
of interest, delegation of authority, safekeeping
and custody, suitable and authorized
investments, investment parameters, maximum
maturities, and policy considerations.
