Springtime at the City of Bartlesville means only one thing to the City’s Finance and Accounting staff: Budget. Every year around this time City staff begins working to prepare the proposed budget for the upcoming fiscal year. For this edition of Director’s Cut, City Beat spoke with Chief Financial Officer and City Clerk Jason Muninger about the process and what citizens can expect in the coming weeks.
City Beat: When does the City’s budget process start and why?
Muninger: The budget is certainly top of mind for most directors throughout the year, but planning for the next fiscal year’s budget technically begins around February so that the process can be wrapped up by June 30, when our fiscal year ends. The City Charter and state law requires us to enact the new budget on July 1, the beginning of our fiscal year, so starting in February ensures that we have time to meet all the requirements and are ready to go on July 1.
What steps are involved in the budget approval process?
The first thing we do is look at each department and identify needs and potential cost reductions and efficiencies throughout City operations and consider those needs and reductions in conjunction with projected growth or decline in overall revenue. Once these steps are completed, a proposed budget is prepared and presented to the City Council. This is always during a public meeting and sometimes multiple meetings are held to discuss the issue. A public hearing is then held to gain input from citizens. The proposed budget is then reviewed by the governor’s office and ultimately approved by the City Council to become effective on July 1.
How is the City funded?
The City of Bartlesville relies primarily on two sources of funding: Sales tax revenue, which is used to fund City operations, and Enterprise funding, which is revenue derived from fees that are collected through the City’s three Enterprise Funds — Water, Waste Water and Solid Waste. The City receives several other sources of funding as well, including the voter-approved ½-cent Capital Improvement Projects tax and the ¼-cent Economic Development tax, both of which are sunset taxes and budgeted separately, following the start of the fiscal year. Bartlesville also has a 5 percent hotel/motel tax, 60 percent of which helps fund the Bartlesville Community Center and 40 percent of which is used to fund the Bartlesville Convention and Visitors Bureau. The City also collects a small portion of property taxes — 15 mils — for General Obligation Bond projects, also approved by voters.
Decisions on the upcoming budget depend largely on whether City revenue streams are projected to be up or down over the coming year. What are those projections based on?
Projections are made based on economic indicators at the time the budget is constructed, which are sometimes not as reliable as we would like. While sales tax collections and fees for services fluctuate based on a variety of factors, the City, like all government entities, must budget for fixed, reoccurring expenses — such as employee salaries and benefits — despite those fluctuations. Because the potential exists for declines in revenue beyond our control, the City of Bartlesville makes every attempt to project conservatively and budget accordingly.
How have projections this year been affected by the coronavirus pandemic?
We budgeted very conservatively for the current fiscal year due to the pandemic, which was just getting started when we began our budget process last year. However, we haven’t seen the decreases in our monthly sales tax revenues that we feared would occur. Currently, we are up somewhere between seven and eight percent or roughly $1 million over budgeted anticipation, and that is certainly something we didn’t anticipate. It’s a very good ‘problem’ to have.
How will the pandemic impact projections for next year?
We can never truly know if our projections will hit or miss, but we traditionally ‘hit’ more than we ‘miss.’ Of course, the pandemic is something none of us have lived through before, so we can’t say for sure how revenue might be impacted going forward. We have reason to believe some of the spikes we saw in our revenue this year was because people were shopping closer to home due to the pandemic. If that changes, it could impact our revenue negatively. We will budget conservatively to try to get ahead of that, because it is always better to end up with more than you had planned than to end up with less.
Are you optimistic about the City’s outlook this coming year?
I am. We are very lucky to enjoy tremendous support from the community, which has resulted in voter approval of several revenue streams that fund City operations, projects and equipment. That we have fared this well despite the pandemic is further evidence that people are shopping locally and spending their dollars where they provide the most benefit for Bartlesville. This, along with the sound planning and strong leadership of our city councils — past and present — has enabled us to maintain and improve our infrastructure and continue providing quality services to our citizens, all while maintaining a strong financial position. It’s because of these things that we are optimistic that next year will prove to be another fiscally sound one for our city.