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T F D R It d o fo co B A C sc A o s 1 v A co A m A D F S tr To: Depa From: Janet Date: Augu Re: FY 20 is time to b epartments f responsib or formulati ompleting y Budget Tim August 1: Fi Communica chedule for August 4: Bu nline goes ite-based b 8. For thos ia departme August 18: ompleted b August 20 a meetings. August 20-S Departments Finance com Sept 2: Fina rends. artment Hea Dutcher, S st 4, 2014 014/2015 F begin the fin s in develop bility. The p ng your De your depart meline: nance hold te expectat r one-on-on udget instru live for bud budgeting m se departm ent mailbox Departmen by the close nd 22: Aud Sept. 4: Fina s correct dr mpiles final ance presen ads and Fis Senior Finan Final Budge nal budget ping their in purpose of t epartment’s tment’s sub ds meeting w tions. 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Distribute published budget to known participants. Sept. 17: Special Board Meeting. Open public budget hearing. Opportunity for public comments concerning final budget. Begin review of budgets with Board. Opportunity for department heads to address the board concerning budgetary matters. Department heads should be available at meeting to answer questions. Continue public hearing to special meeting of the Board of Supervisors scheduled for September 23. Sept. 23: Special Board Meeting. Continue, then close public budget hearing. Board of Supervisors considers adoption of final budget. Budget Development Guidelines The budget is a tool specifically meant to measure and control financial accountability. It communicates information about the anticipated allocation of resources and expenditures. A balanced budget ensures the County does not spend beyond its means. A balanced budget is also required by California State law. A structurally balance budget further ensures the County’s use of resources for operating purposes does not exceed operating revenues. This is our ultimate goal with the budget process as it strengthens the County’s fiscal sustainability. The goal of Finance is to achieve a structurally balanced budget for the County’s General Fund within the next couple of years. These guidelines are designed to help the County achieve this goal. A structurally balanced budget is defined as one that budgets recurring expenditures at no more than the amount of recurring revenues. Guidelines for estimating revenues: Operating or recurring revenues are those reasonably expected to continue year to year with some degree of predictability. Some revenues have both non-recurring and recurring components and the exercise of judgment is required to determine how much is truly recurring. Generally, only the recurring portion is budgeted. Finance has very conservatively estimated General Fund operating or recurring revenues and this is especially true for those revenues that are highly volatile and difficult to accurately predict. This is done to avoid overspending and to prevent mid-year expenditure cuts. Finance has not budgeted non-recurring or one-time revenue unless: o A specific appropriation or use of the revenue has been identified, o Receipt of the revenue is reasonably assured and o The amount can be estimated with a high degree of accuracy. ---PAGE BREAK--- 3 o Departments responsible for budgeting revenue outside the General Fund should also adhere to this guideline. Finance is responsible for estimating revenues for the General Fund. Departments are responsible for estimating revenues for those funds under their authority and outside the General Fund. Revenue projections should be based on grantor award letters, anticipated allocations, trend analysis, economic modeling or any other method that is appropriate that results in conservatively projecting the amount of revenues anticipated to be received. Guidelines for estimating expenditures: Operating or recurring expenditures appear in the budget each year and include salaries, benefits, materials, services, utilities, supplies and maintenance. Capital asset acquisitions are not considered recurring and although some capital assets are acquired every year they are not the same assets year after year. Recurring expenditures are those necessary to continue providing the same level of service provided in the prior year. The finance department will set and enter salaries and benefits for all funds using the following guidelines: o Salaries are based on current pay rates and anticipated step increases. o Budgeted salaries are limited to those positions approved and currently filled. o PERS contributions are generally based on 37.781% for safety personnel and 17.038% for non-safety personnel. Rates are lower if PEPRA applies. o Health insurance premiums are estimated with a 5% increase. o Workers compensation amounts are based on a separate allocation using information provided by Trindel. This allocation takes into consideration historical trends resulting from paid claims. Insurance amounts are based on a separate allocation prepared by Finance using information provided by Trindel. This allocation takes into consideration asset ownership and historical trends resulting from paid claims. Indirect cost allocations are based on the County’s cost plan filed with the State. A schedule of amounts by fund will be prepared and distributed. All departments are responsible for budgeting services and supplies using the following guidelines: o Estimate expenditures using historical actual results from prior years and not carryover budgets unless circumstances have changed and a different budget amount is warranted (but see below). o If the department’s proposed budget for any account exceeds FY 2014 actual results by the greater of $1,000 or 20% of FY 2014, the department must provide finance with justification as to why. Justification is to be documented using the Budget Justification form. FY 2015 budgets cannot be more than 120% of last year’s actual results without providing justification. ---PAGE BREAK--- 4 Example: For office supplies, a department proposes spending $13,000 for FY 2015. FY 2014 budget was $12,000 and FY 2014 actual results were $10,000. The department is required to provide justification because the proposed budget of $13,000 is greater than 120% of FY 2014 results of $10,000. The FY 2014 budget of $12,000 has no impact. This does not mean the department cannot budget $13,000 for office supplies. It means the department must provide justification to propose spending $3,000 more than it did in the prior year. o Do not budget one-time expenditures unless one-time revenues (or carryover balance) is available and obligated in some manner. If one-time revenues or carryover balance is not available or obligated, these items should be listed on the Unfunded Request form. Do not include unfunded requests in the department’s budget. Departmental Instructions – those with access to site-based budgeting model Departments will prepare this year’s final budget request using the site-based budgeting model which is accessible from the site-based voucher system menu. Using the Site Based Budget – Department Menu, each general fund department will enter their projected amounts for services and supplies using the guidelines described above. Non-general fund departments will enter their projected revenues, services and supplies. Salaries and benefits will be entered by Finance. Budget amounts for each budget unit are entered separately based on the department’s site code and fund/department combination. The budget system will display the 2014 YTD and 2014 Budget amounts and the 2015 Request amount will show the amount requested during the preliminary budget process. Enter the department’s projected 2015 Request by changing the amount currently shown. Budget input to the system must be completed by the close of business on Monday, August 18. Department Instructions – those without access to the site-based budgeting module For those departments without access to the site-based budgeting module, Finance will distribute reports to department mailboxes. These departments should review their budgets and make corrections directly on the report. Corrected reports should be returned to Finance no later than the close of business on Monday, August 18.