Developing our City’s budget requires both knowledge of municipal finance and an understanding of what the government organization and community needs.
“We take a lot into consideration when developing a budget,” said Eric Christensen, Finance Director. “We look at the current state of revenues and expenditures and ending fund balances. We consider the City’s strategy and mission—what are we trying to achieve and how can we justify potential enhancements.”
In the last biennial budget cycle, staff presented a long-range financial plan, identifying a looming structural imbalance, meaning expenditures would potentially outpace revenues in 2024 if changes were not made. The COVID-19 pandemic, and the subsequent economic downturn caused by closures necessary to protect public health, exacerbated the City’s financial position. However, things change. Revenues may go up, or expenditures may need to increase. This is why the City’s financial position is reassessed regularly.
“While sales tax revenue remained flat between 2019 and 2020, program and planning fees dropped, which affected overall revenues,” says Christensen.
The City must take measures to ensure a balanced budget, which is required by state law. During the COVID-19 pandemic, staff positions were either cut or re-imagined, resulting in staff layoffs and furloughs. Programs and services were reduced, and staff were asked to take on different work duties to meet emergency needs. With an economic recovery on the horizon and new businesses opening in Burien, the City is revisiting the budget.
“One of the biggest challenges we are facing is the looming structural imbalance,” says Christensen. “Our long-range financial plan shows that tough conversations are needed about revenue and expenditures.”
We are currently in the middle of a biennial budget cycle. The City Council will be considering staff requests to adjust the budget this fall. Rebecca Hodge, the City’s new finance analyst, will be assembling these requests and working with City leadership to prioritize what goes in front of the City Council.
“Budgets are a snapshot of what the city needs and is trying to accomplish,” said Hodge. “But it evolves. The budget document that is approved in the beginning of a biennial budget cycle can change as needs and conditions change. For example, the pandemic required us to alter what was planned.”
“The community has a voice in what gets prioritized in our budget,” said Hodge.
The City follows state laws regarding municipal budgets, and is guided by its own financial policies, approved by the City Council. The budget serves as the plan that guides how the City spends public money. There are numerous accountability requirements and checks and balances that are implemented to ensure transparency and stewardship of public funds.
Budget development follows a similar process each year. While the community can weigh in at any time, there are public hearings dedicated to the budget scheduled for this fall.
- Baseline budget: This step involves understanding current expenditures and revenues.
- Landscape analysis: Staff gather information on organizational changes and changes to tax codes, economic conditions, and policies.
- Goal setting: Staff seek guidance from both the City Manager and City Council regarding their goals. Do they want to keep the budget the same, do some minor fine-tuning, or are more significant updates desired?
- Budget development: The finance director and budget analyst work with City leadership to collaborate on a draft budget.
City Manager Review
The City Manager works with finance staff and departments to finalize and approve a draft budget before it is presented to the City Council.
- City Council review: City Council reviews the budget during public meetings. State law requires public hearings and the budget be presented to City Council in early October. There are five council meetings devoted to discussing the budget before it gets approved, taking place from October through early December.
- Budget approval: State law requires the City Council to approve the budget by the end of the year.
Keeping track of the budget
The Finance Department records daily expenditures and revenue intake. They also produce quarterly and annual reports tracking budget progress. These reports are shared with the City Council and published on the City website.