2007-2008 Annual Operating Budget

City of Mesquite, Texas Fiscal Year 2007 – 2008 Annual Budget John Monaco Mayor David L. Paschall Mayor Pro Tem Shirley Roberts Deputy Mayor Pro Tem John L. Heiman, Jr. Councilmember Stan H. Pickett Councilmember Dennis Tarpley Councilmember Ted Barron City Manager Carol Zolnerowich Deputy City Manager Mark Hindman Assistant City Manager Ted Chinn Budget Director This budget will raise more total property taxes than last year’s budget by $2,981,385 (7.84%), and of that amount $798,806 is tax revenue to be raised from new property added to the tax roll this year. The above statement is required by Section 102.005(b), Local Government Code as amended by HB 3195 of the 80th Texas Legislature. i ii Understanding the Budget The City of Mesquite's adopted budget is produced in conformance with guidelines developed for use by local governments and is intended to ensure proficiency in four major categories as follows: 1. Policy Document – The budget should serve as a policy document for elected officials and management to convey how the organization will operate, and what process will be used to adopt and amend the annual budget. 2. Financial Plan – The budget should serve as a financial plan describing all sources of funding, including summaries of revenues and expenditures for multiple years, and changes in fund balances. 3. Operations Guide – The budget should serve as an operations guide to the departments that receive funding through the budget by identifying the resources to be provided and the objectives to be met. 4. Communications Device – The budget should serve as a communications device to convey essential information to the diverse groups who use the budget information – elected officials, the public, bond rating agencies and investors. To help ensure that the budget document meets the above criteria and contributes to the effectiveness of communication to its readers, the budget document is organized into the following sections: Organizational Structure This section provides information about elected officials and the City of Mesquite organization. Included in this section are an organizational chart, information on the City’s advisory boards and commissions and detailed staffing information that lists all authorized full-time and part-time positions by fund. Budget Message The Budget Message includes a formal transmittal letter designed to summarize major issues facing the City of Mesquite and briefly explains key budget decisions and major initiatives to be taken. This section also includes budget information on the General Fund and other major funds, detailing significant revenue and expenditure changes, growth, debt policies and tax rate history. Financial Summaries This section describes the City’s fund structure and presents the budget information for each appropriated fund on detailed schedules with summaries of revenues, expenditures and other financing sources. These financial schedules show actual historical results from the prior fiscal year, the current year adopted and amended budgets, and the budget year. Policies and Goals This section contains all of the City’s financial and non-financial policies, as well as City Council goals and priorities for the immediate future. The City’s long-term financial planning process is also described in this section along with multi-year financial forecasts of major funds. iii Department Profiles The Department Profile section of the budget includes a cover page highlighting the City’s programs and activities, program objectives and performance measures, and cost and personnel summaries over a three-year timeframe by division. Capital Budget The Capital Budget section summarizes all capital expenditures included in both the operating budget and the first year budget of the Capital Improvement Program. Statistical This section offers demographic information and graphical representation of local economic and financial indicators, or benchmarks, that the City uses to assess its overall financial health. Appendix The Appendix contains ordinances that adopt the budget and establish the tax rate. This section also offers schedules of the City’s total outstanding general obligation and revenue debt. Debt service costs (amount of principal and interest) for each bond issue are shown for the budget year and for each fiscal year until the bonds are retired. Glossary The Glossary section defines technical terms related to finance and accounting, as well as non- financial terms related to the City’s programs and activities. Common acronyms and abbreviations are also defined to assist readers. Budget Process The City of Mesquite annual budget is a Target Based Budget developed in accordance with State law, the City Charter, and input from the public and all stakeholders within the framework of best practices identified by the National Advisory Council on State and Local Budgeting (NACSLB). According to City Charter, "The City Manager shall have prepared on or before the 15th day of August in each year a budget to cover all proposed expenditures of the City for the succeeding fiscal year which begins on October 1 and ends on September 30, of each calendar year. The budget shall be prepared in conformity with the state laws of Texas." Much work takes place before and after this deadline, and the following overview summarizes the entire budget process. Budget Preparation In January the Budget Department works with other City departments in preparing multi-year revenue and expenditure forecasts for the City’s major funds. The City Manager’s executive team then reviews and updates, as needed, the City’s budget and financial policies and Long-Term Financial Plan. During this time the budget calendar is developed and salary and benefit projections are completed by the Budget Department. Based on revenue and expenditure projections a budget target amount is determined for each department. This budget target is, in effect, an expenditure cap that iv cannot be exceeded by the department head in preparing their budget requests. Budget preparation manuals are distributed along with budget target numbers to each department head by mid-March. Department heads then develop their budget requests within the constraints of their target number, and any new programs or services sought by the department head are submitted as expanded programs, which could be considered later in the year once the budget is further developed and depending on available resources. City Manager Review Departments have about a month’s time to submit their budget requests to the Budget Department, usually by mid-April. Once the budget requests are entered into the City’s budget and accounting system, the Budget staff then formats the budget requests in useful reports for the City Manager’s executive team to review. During the month of May the City Manager’s budget review team meets individually with each department head to go over their budget requests by division, making preliminary decisions on existing service levels, staffing levels and learning about new expanded program requests. On May 15th the Chief Appraiser sends preliminary notices of appraised values to taxing entities. The City’s Tax Office then calculates the amount of property tax that may be generated from the preliminary appraisal and tax rate, and any adjustments are made to the revenue forecast for the budget year. The management review process is usually completed by mid-June. Citizen Input In June the City Council provides for several public hearings to gather citizen input on the budget. During these public hearings citizens are encouraged to offer their suggestions and ideas of what programs they would like included in the upcoming budget or what levels of service they desire. These public hearings are not required by law, but are viewed as an important part of the budget process. A state law mandated public hearing is held after the proposed budget is filed with the City Secretary’s Office and made available to the public. Council Review After citizen input is gathered at the public hearings a draft budget is submitted to the City Council for their review by the first week of July. Throughout the month of July the City Council holds several budget workshops to receive presentations by department heads and to discuss their budget needs and any fiscal impacts. These budget workshops are also open to the public and are used to encourage further citizen input on the budget as details are discussed. On July 25 the Chief Appraiser certifies the approved appraisal roll to each taxing entity, and the budget is modified to reflect any changes in anticipated property tax revenue. The City Council usually holds a budget retreat workshop, also open to public input, once the certified roll is received to discuss the budget and consider any changes to the draft budget. Budget Adoption Upon conclusion of the Council/Staff budget workshops, but before August 15th, the City Manager submits a proposed budget to the City Council for consideration and adoption. A copy is also filed with the City Secretary’s Office and posted on the City’s Web site for public review in accordance with State law. Prior to City Council adoption, a final, State law mandated public hearing is held on the proposed budget. At this public hearing, all interested persons are given a final opportunity to be heard regarding any item on the proposed budget. The Council then has the option of approving the v budget at this meeting or postponing the vote to the next Council meeting. Once approved, the City Council adopts the budget by ordinance, which becomes effective on October 1. Budget Amendments The adopted budget authorizes the amount of spending, also known as appropriations, that is allowed for the fiscal year. Appropriation changes, or revisions, are allowed to account for situations that were not anticipated at the beginning of the year. Budget revisions may be approved by the City Manager between departments in the same fund, but any changes to the appropriated amount at the fund level, or transfers between funds, require Council approval.

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