THE OPERATING BUDGET PROCESS

The annual budget preparation cycle begins with the development of a detailed budget manual and calendar in or around March. This contains all the pertinent information departments need to prepare their requests for the upcoming year, and is usually adopted by Commissioners in April.

The Budget Office prepares and distributes all wage and fringe benefit costs and several other costs such as courier service, telephone, and utilities, which must be included in the departmental budgets. Human Resources and Management Information Services also provide information regarding classifications and automation costs, respectively. After receipt of this information, departments project the remaining operating costs and prepare their requests for equipment and other capital expenditures.

Submission of Departmental Budget Requests; Anticipated Concerns; Statistical Information: All departments have several weeks to prepare the budget information and submit it to the Budget Office. The Controller's Office contacts all previously funded community agencies to notify them of the availability of funds. Similarly, public notice is given concerning these monies. Most county departments enter their budget requests directly into the computer system and submit all the required information within the allotted time.

Departments must submit with their requests a written statement of anticipated changes for the upcoming year in the fiscal, social, or political environment which may affect the provision of services. In addition, the departments submit projected output and workload measures called activity indicators along with the budget request. This background information and activity indicators, along with performance measures are part of the strategic planning process, and are used to guide the development of the Controller recommended budget and the work priorities of county staff.

Revenue Projections and the Budgetary Forecasts for the Upcoming Fiscal Year: During April and May, the Budget Office prepares its preliminary estimates of revenues and expenditures for the upcoming fiscal year. The projections are based upon a variety of factors; the outcomes of the calendar year just ended; projections of the status of state and federal grants; cash reserves and interest rate projections; general economic indicators; wage and fringe benefit cost projections; etc. The 2007 revenue projections, as they were adopted, assumed some growth in the revenue base.

Budget Guidelines: From March through June, the Controller and Budget Office work with the Finance Committee on developing revenue projections for the upcoming year, as well as developing guidelines which will govern the preparation of the budget. Development of the actual budget is driven by the Ingham County's Strategic Plan. This process allows the county’s vision, mission, and objectives to be in the forefront, a critical step in the process of shaping discussions on programming and service priorities.

The resolution (#07-105) setting budget priorities and guidelines also establishes the proposed unallocated amount of $300,000 for Strategic Planning Initiatives, consistent with the process listed earlier for strategic planning. This resolution also sets directions for the development of the budget, prior to requests being made from department heads and agencies.

Controller's Budget Hearings; Preparation of the Controller's Recommended Budget Document: The Controller holds hearings with the department head, his or her staff, Budget Office staff and the appropriate liaison committee chair during May. The purpose of these hearings is to obtain a better understanding of all the issues related to the departmental budget. After these hearings, the Controller's Office and the Budget Office work to balance the budget for each of the liaison committees.

The amounts to set aside for capital expenditures and debt payments are determined following review of the departmental requests and discussions with appropriate staff.

Since the budget has historically set aside an amount for use later in the process by the Finance Committee (Discretionary Funds, now referred to as Strategic Planning Initiatives), the balancing of the Controller's Recommended Budget usually involves some proposed reduction of certain services and/or positions within the base levels of certain departments.  For 2008, as in the past, there were requests for new positions and program enhancements.

Liaison and Finance Committee Budget Hearings: The Controller Recommended Budget is formally reviewed by the liaison committees of the Board. They in turn hold budget hearings on each departmental and agency budget and develop their own recommendations for additions to or restoration of service levels from the $300,000 Strategic Planning Initiatives. Each list of service levels, new programs, or new positions requested, compiled by the committees during these hearings is forwarded with the committee’s recommendation for funding. A liaison committee may add new or existing services to the budget only by reducing another budget under its control or by identifying additional revenue sources within the committee.

Any services not funded by the Controller or by this method are prioritized for Finance Committee funding if further consideration is desired. In addition, the funds for strategic planning are also used as match for leveraging grants from state, federal or other revenue sources, consistent with priorities.

These liaison committee recommendations are then reviewed by the Finance Committee in another round of hearings with departments and agencies where the liaison committees’ lists of recommendations for strategic planning funding are then reviewed, amended, and condensed into a single Finance Committee list for recommended funding. The Finance Committee prioritizes this final list of service levels and funds the top priorities with the $300,000 set aside at the beginning of the process. In order to fund more services, the Finance Committee may also choose to reduce the size of the $600,000 contingency account, or it may increase the revenues if new information indicates this is possible.

Budget Adoption by Board of Commissioners: The complete operating and capital expenditure plan is passed by the Finance Committee, along with a proposed General Appropriations Resolution. All are then forwarded to the entire Board of Commissioners. After formal notice of public hearing, the budget is then adopted.