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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. E.i.
For Meeting of: October 6, 2020
ITEM TITLE: Recognition of City Budget Award
SUBMITTED BY: Steve Groom, Director of Finance and Budget
SUMMARY EXPLANATION:
The City of Yakima has been recognized by the Government Finance Officers Association
with GFOA's Distinguished Budget Presentation Award for its 2020 budget.
The City's 2020 budget reflects the effort of staff across every department of the city, city
management and City Council. Incremental improvements in the process, and the resulting
document, in the past few years have resulted in achieving results that meet best practice
standards.
ITEM BUDGETED: NA
STRATEGIC PRIORITY:
APPROVED FOR SUBMITTAL BY THE CITY MANAGER
RECOMMENDATION:
ATTACHMENTS:
Description Upload Date Type
F4 A rd certificate 9/16/2020 exhibit
V1/ashin ton Mate a rd s 9/ 3/ 0 0 backup Material
D FA budget scorecard 9/10/2020 exhibit
D F udgot criteria 9/1 /2020 exhibit
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GOVERNMENT FINANCE OFFICERS ASSOCIATION
Distinguished
Budget Presentation
Award
PREarv1ED 10
City of Yakima
Washington
For the Fiscal YearB e®mtivg
January 1,2020
Cee,444, - Aftlal
Executive Director
Current GFOA Distinguished Budget Award Recipients 3
Washington State
Number of
Entity Name Entity Type Year Awards
Benton County County 2018 13
Kitsap County County 2018 14
Pierce County County 2018 32 3
Aberdeen Municipality 2018 2
Auburn Municipality 2018 27
Bainbridge Island Municipality 2018 19
Bellevue Municipality 2018 32
Bonney Lake Municipality 2018 8
Bothell Municipality 2018 16
Burien Municipality 2018 16
Clyde Hill Municipality 2018 13
Everett Municipality 2018 27
Federal Way Municipality 2018 22
Kenmore Municipality 2018 17
Kennewick Municipality 2018 28
Kent Municipality 2018 21
Kirkland Municipality 2018 18
Lake Forest Park Municipality 2018 2
Lakewood Municipality 2018 12
Lynnwood Municipality 2018 13
Maple Valley Municipality 2018 17
Newcastle Municipality 2018 12
Normandy Park Municipality 2018 7
North Bend Municipality 2018 10
Olympia Municipality 2018 35
Poulsbo Municipality 2018 20
Puyallup Municipality 2018 13
Redmond Municipality 2018 19
Renton Municipality 2018 29
Ridgefield Municipality 2018 1
Sammamish Municipality 2018 16
Shoreline Municipality 2018 20
Sumner Municipality 2018 5
Tacoma Municipality 2018 4
Tukwila Municipality 2018 8
Washougal Municipality 2018 3
West Richland Municipality 2018 11
Woodinville Municipality 2018 13
Yelm Municipality 2018 1 36
Central Whidbey Island Fire & Rescue Special District 2018 5
Clark Regional Wastewater District Special District 2018 3
Discovery Clean Water Alliance Special District 2018 2
Port of Seattle Special District 2018 11
Port of Tacoma Special District 2018 14
Puget Sound Regional Council Special District 2018 2
Sound Transit Special District 2018 9 7
46 46
Budgets beginning before 1/1/21
Reviewer ID Document Number 4
Name of Entity State/Province
Record Number Order Rec'd Number
1 = Information not present, 2= Does not satisfy criterion, 3=Proficient,4=Outstanding
Please rate each criterion and each
overall category
qy „fr, Criteria Description
Grade Introduction and Overview
* C1 Table of contents (mandatory)
P1 I
Strategic goals & strategies
P2 Short-term organization-wide factors influencing decisions
* P3 Priorities and issues (mandatory)
* C2 - Budget Overview(mandatory)
Financial Structure, Policy, and Process
* 01 . Organization chart(mandatory)
F1 Fund descriptions and fund structure
02 M Department/fund relationship
F2 Basis of Budgeting
* P4 Financial policies (mandatory)
* P5 Budget process (mandatory)
Financial Summaries
* F3 Consolidated financial schedule(mandatory)
* F4 Three(four) year consolidated and fund financial schedules (mandatory)
* F5 Fund balance(mandatory)
* F6 Revenues (mandatory)
F7 Long-range financial plans
Capital & Debt
* F8 Capital expenditures (mandatory)
F9 Impact of capital investments on operating budget
* F10 Debt(mandatory)
Departmental Information
• 03 Position summary schedule(mandatory)
* 04 Department descriptions (mandatory)
05 Unit goals and objectives
06 Performance measures
Document-wide Criteria
C3 Statistical/supplemental section
C4 Glossary
C5 Charts and graphs
C6 Understandability and usability
I Overall as a policy document
I
Overall as a financial plan
Overall as an operations guide
■ Overall as a communications device
Return this rating sheet and your narrative comments to the Budget Awards Program (budgetawards@gfoa.org)
5
Distinguished Budget Presentation Awards Program
Government Finance Officers Association
Awards Criteria
(and explanations of the Criteria)
Budgets beginning before 1/1/21
#C1. Mandatory: The document shall include a table of contents that makes it easier
to locate information in the document.
Criteria Location Guide Questions
Table of 1. Is a comprehensive table of contents provided to help the reader locate information
in the document?
Contents 2. Are all pages in the document numbered or otherwise identified?
3. Do the page number references in the budget or electronic table of contents agree
with the related page numbers in the budget or electronic submission?
Make sure every page in the budget
Explanation document is sequentially numbered
Detailed indices preceding individual sections can be helpful, but they are not a substitute
for a single comprehensive table of contents. Care should be taken in developing budget or
electronic page number references in the table of contents, so they agree with the related
page numbers in the budget document or electronic submission. The use of whole numbers
as page numbers is easier to follow.
#P1: The document should include a coherent statement of organization-wide,
strategic goals and strategies that address long-term concerns and issues.
Criteria Location Guide Questions
Strategic 1. Are non-financial policies/goals included?
Goals and 2. Are these policies/goals included together in the Budget Message or in another
Strategies section that is separate from the cabine sections?
3. Are other planning processes discussed?
Look at GFOA best practice on
Establishment of Strategic Plans.
Explanation
This criterion relates to the long-term, entity-wide, strategic goals that provide the context
for decisions within the annual budget. Consider including action plans or strategies on
how the goals will be achieved.
Refer to GFOA's best practice on Establishment of Strategic Plans.
#P2: The document should describe the entity's short-term factors that influence the
decisions made in the development of the budget for the upcoming year.
Criteria Location Guide Questions
1. Are short-term factors addressed?
Short-term 2. Does the document discuss how the short-term factors guided the development of
organization the annual budget?
-wide 3. Is a summary of service level changes presented?
factors Factors should include a mix of
operational andfinancial items.
Explanation
This criterion requires a discussion of the key factors that guide the development of the
upcoming year's budget. Factors that might be included relate to: salary and benefit
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guidelines, fees, capital improvements, program enhancements or reductions, tax levels,6
use of reserves, service level assumptions, unfunded mandates, economic development
strategies, inflation assumptions, and demographic assumptions.
#P3. Mandatory: The document shall include a budget message that articulates
priorities and issues for the upcoming year. The message should describe significant
changes in priorities from the current year and explain the factors that led to those
changes. The message may take one of several forms (e.g., transmittal letter, budget
summary section).
Criteria Location Guide Questions
1. Does the message highlight the principal issues facing the governing body in
Priorities developing the budget (e.g., policy issues, economic factors, regulatory, and
and Issues legislative challenges)?
2. Does the message describe the action to be taken to address these issues?
3. Does the message explain how the priorities for the budget year differ from the
priorities of the current year?
4. Is the message comprehensive enough to address the entire entity?
Discuss issues and offer solutions
Explanation
This criterion requires a summary explanation of key issues and decisions made during the
budget process. The budget message also should address the ramifications of these
decisions. It is recommended that the total amount of the budget be included in the budget
message.
#C2. Mandatory: The document should provide an overview of significant budgetary
items and trends.An overview should be presented within the budget document either
in a separate section (e.g., executive summary) or integrated within the transmittal
letter or as a separate budget-in-brief document.
Criteria Location Guide Questions
Budget 1. Is an overview contained in the budget message/transmittal letter, executive
summary, or in a separate budget-in-brief document?
Overview 2. Is summary information on significant budgetary items conveyed in an easy to read
format?
3. Is summary information on budgetary trends provided?
Present the budget overview in a concise manner.
Explanation
The intent of this criterion is to help readers quickly understand major budgetary items and
trends (revenues, expenditures, and capital). Highlighting, indentation, bullet points,
outlines,tables, or graphs may help in communicating this information. If a budget-in-brief
is published as a separate document, inclusion of easy to read summary financial
information in the main budget document is encouraged.
Refer to GFOA's best practice on Effective Presentation of the Budget Document.
#01. Mandatory: The document shall include an organization chart(s) for the entire
entity.
Criteria Location Guide Question
Organization 1. Is an organization chart provided which shows the entire entity?
Chart
Make sure the organization char 4is legible.
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Explanation
This criterion requires that an organizational chart be presented only for the overall entity.
Organizational charts for individual units are not required. When organizational charts are
provided for individual units within the entity, those charts should be presented in such a
way as to underscore the link between the individual unit and the overall entity.
#F1: The document should include and describe all funds that are subject to
appropriation.
Criteria Location Guide Questions
1. Is a narrative or graphic overview of the entity's budgetary fund structure included
Fund in the document?
Descriptions 2. Does the document indicate which funds are appropriated? (Other funds for which
and Fund financial plans are prepared also may be included in the document.)
Structure 3. Does the document include a description of each individual major fund included
within the document?
4. If additional or fewer funds are included in the audited financial statements, does
the document indicate this fact?
An`organization chat'of the government's funds is useful.
Explanation
Showing an entity's budgetary fund structure is essential for understanding its financial
configuration. An overview of the budgeted funds should be included in the document.
This overview should include each major fund's name and either (1) an indication of
whether the fund is a governmental, proprietary, or fiduciary fund OR (2) an indication of
the fund type of each fund (e.g., general, special revenue, enterprise fund). Any fund
whose revenues or expenditures, excluding other financing sources and uses, constitute
more than 10% of the revenues or expenditures of the appropriated budget should be
considered a major fund for this purpose. The entity needs to identify its major funds.
#02: The document should provide narrative, tables, schedules, or matrices to show
the relationship between functional units, major funds, and nonmajor funds in the
aggregate.
Criteria Location Guide Questions
1. Is the relationship between the entity's functional units, major funds, and nonmajor
Department/ funds in the aggregate explained or illustrated?
Fund
Relationship The department/fund relationship can be shown
through the use of amatix.
Explanation
Since most entities use more than one way of classifying financial and operational
information,this criterion requires an explanation or illustration of the relationship between
functional units, major funds, and nonmajor funds in the aggregate. A matrix is one way
to show this relationship.
#F2: The document shall explain the basis of budgeting for all funds,whether cash,
modified accrual, or some other statutory basis.
Criteria Location Guide Questions
1. Is the basis of budgeting defined (eg., modified accrual, cash, or accrual) for all
Basis of funds included in the document?
Budgeting 2. If the basis of budgeting is the same as the basis of accounting used in the entity's
audited financial statements, is that fact clearly stated?
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3. If the basis of budgeting is not the same as the basis of accounting used in the8
entity's audited financial statements, are the differences described?
Make sure exceptions between basis of budgeting and basis of accounting are noted
Explanation
The document should clearly identify the basis of budgeting(e.g., modified accrual, cash,
accrual) employed by the entity for each category of funds represented (governmental,
proprietary, and fiduciary). If the basis of budgeting is identical to the basis of accounting
used in the audited fund financial statements in the basic financial statements for some or
all categories of funds,that fact should be clearly stated. Differences between the basis of
budgeting and the basis of accounting should be identified.
For examples of differences between the basis of budgeting and the basis of accounting,
refer to GFOA's best practice, Basis of Accounting versus Budgeting Basis.
#P4. Mandatory: The document should include a coherent statement of entity-wide
long-term fmancial policies.
Criteria Location Guide Questions
1. Is there a summary of financial policies and goals?
Financial 2. Do the financial policies include the entity's definition of a balanced budget?
Policies 3. Are all financial policies presented in one place?
Look at GFOA best
practice on Adoption of
Financial Polices.
Explanation
This criterion requires a discussion of the long-term financial policies. Financial policies
that should be included (but not limited to) and formally adopted relate to: (1)financial
planning policies, (2)revenue policies, and (3) expenditure policies. The entity should
adopt a policy(s)that defines a balanced operating budget, and indicate whether the
budget presented is balanced. The entity should adopt a policy(s)that supports a financial
planning process that assesses the long-term financial implications of current and
proposed operating and capital budgets, budget policies, and cash management and
investment policies. The entity should adopt a policy(s)to inventory and assess the
condition of all major capital assets. Revenue policies should consist of diversification,
fees and charges, and use of one-time and unpredictable revenues. Expenditure policies
should consist of debt capacity, issuance, and management,fund balance reserves, and
operating/capital budget versus actual monitoring.
Refer to GFOA's best practices on (1) Adopting Financial Policies, (2) Long-Term
Financial Planning (3) Multi-Year Capital Planning. (4) Establishing Government
Charges and Fees, (5) Debt Management, (6) Determining the Appropriate Level of
Unrestricted Fund Balance in the General Fund, (7) Determining the Appropriate Level
of Working Capital in Enterprise Funds (8) Creating a.Comprehensive Risk Management
Program, and (9) Establishing an Effective Grants Policy.
#P5. Mandatory: The document shall describe the process for preparing, reviewing,
and adopting the budget for the coming fiscal year. It also should describe the
procedures for amending the budget after adoption.
Criteria Location Guide Questions
1. Is a description of the process used to develop, review, and adopt the budget
Budget included in the document?
Process
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2. Is a budget calendar provided to supplement(not replace)the narrative information s
on the budget process?
3. Is a discussion of how the budget is amended provided in the budget document
available to the public (including the budgetary level of control)?
Include the public in your budget process.
Explanation
This criterion requires a concise narrative description of the budget process, including an
explanation of relevant legal or policy requirements. This description should include the
internal process to prepare the budget, the opportunities for public input, and the actual
adoption of the budget. A budget calendar should be included (noting both key operating
and capital dates), although its format may vary. Inclusion of dates in the narrative
description of the budget process will not satisfy this criterion. The process for amending
the budget after adoption should be covered. The description of the amendment process
should identify the level at which the governing body must approve changes.
Refer to GFOA's best practice on Public Participation in Planning, Budgeting, and
Performance Management as a guide on public involvement in the budget process.
#F3. Mandatory: The document shall present a summary of major revenues and
expenditures, as well as other financing sources and uses, to provide an overview of
the total resources budgeted by the organization.
Criteria Location Guide Questions
1. Does the document include an overview of revenues and other financing sources
Consolidated and expenditures and other financing uses of all appropriated funds?
Financial 2. Are revenues and other financing sources and expenditures and other financing uses
Schedule presented either (1) together in a single schedule OR (2) in separate but
adjacent/sequential schedules OR(3) in a matrix?
3. Are revenues presented by major type in this schedule (e.g., property taxes,
intergovernmental, sales taxes,fees and charges)?
4. Are expenditures presented by function, organizational unit, or object in this
schedule?(For funds other than the main operating fund of the entity, a presentation
by fund normally would satisfy this requirement.)
Break out revenues by type and expenditures by function,
organizational unit or object
Explanation
This criterion requires a summary of the revenues and other financing sources and
expenditures and other financing uses of all appropriated funds in one place in the budget
document. Other funds may be included in this schedule, but appropriated funds must be
included. Both revenues and other financing sources and expenditures and other financing
uses must be presented either (1) together in a single schedule OR (2) in separate but
adjacent/sequential schedules OR (3) in a matrix. Merely showing fund totals in a
summary schedule is not proficient.
Revenues should be presented by type (e.g., property tax, sales tax, fees and charges,
intergovernmental) for all appropriated funds in total. A more detailed presentation that
also shows revenues by major fund is encouraged, but not required. Expenditures should
be presented either by function, organizational unit or object.
#F4. Mandatory: The document must include summaries of revenues and other
financing sources, and of expenditures and other financing uses for the prior year
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actual, the current year budget and/or estimated current year actual, and the
proposed budget year.
Criteria Location Guide Questions
1. For annual budgets, are revenues and other financing sources and expenditures and
Three(Four) other financing uses for the prior year, the current year, and the budget year
Year presented together on the same schedule(s) or on schedules presented on
Consolidated adjacent/sequential pages?
and Fund 2. Is this information presented for the appropriated funds in total (or for the entity as
Financial a whole if no appropriated funds are included)?
Schedules 3. Is this information also presented at a minimum for each major fund and for other
(i.e. nonmajor)funds in the aggregate (or for each significant fund and other funds
in the aggregate if no appropriated funds are included)?
4. For biennial budgets, are revenues and other financing sources and expenditures
and other financing uses for the prior year, the current year, and both budget years
presented together on the same schedule(s) or on separate schedules presented on
adjacent/sequential pages? Break out revenues by type and expenditures by
function,organizational unit,or object for the all
Explanation funds total and individual funds
This criterion requires a schedule(s) that includes both revenues and other financing
sources and expenditures and other financing uses for at least three budget periods (prior
year actual, current year, and budget year). The data for the prior year should be the actual
revenues and expenditures. However, the entity may choose whether to use current year
budget and/or estimated figures. Alternately, the document may include both the current
year budget and the current year estimated amounts. Also, the document may include a
discussion of any changes to the budget for the current year. However, such a discussion
is not required. Any fund whose revenues or expenditures, excluding other financing
sources and uses, constitute more than 10% of the revenues or expenditures of the
appropriated budget should be considered a major fund. Of course, information for other
funds also may be presented. Information for individual major funds, nonmajor funds in
the aggregate, and the entity as a whole may be presented on a single schedule OR on
separate schedules. Regardless of the format selected, the information for both revenues
and expenditures must be included (1) on the same schedule(s) OR (2) on schedule(s)
presented on adjacent/ sequential pages. As in the prior criterion, revenues should be
presented by type (e.g., property tax, sales tax,fees and charges, intergovernmental) and
expenditures should be presented either by function, organizational unit or object.
Entities with biennial budgets should present data for four years - one prior year actual,
current year budget and/or estimated amount, and budget for both years of the biennium.
#F5. Mandatory: The document shall include projected changes in fund balances, as
defined by the entity in the document, for appropriated governmental funds included
in the budget presentation (fund equity if no governmental funds are included in the
document).
Criteria Location Guide Questions
1. Does the document include the entity's definition of"fund balance" (or of"fund
Fund equity" if no governmental funds are included in the entity - frequently the
Balance noncapital portion of net assets)?
2. Is the fund balance (equity) information presented for the budget year?
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3. Is there a schedule showing (1) beginning fund balances, (2) increases and11
decreases in total fund balances (reported separately), and(3)ending fund balances
for appropriated governmental funds?
4. Is this information presented at a minimum for each major fund and for nonmajor
governmental funds in the aggregate?
5. If fund balances of any major fund or the nonmajor funds in the aggregate are
anticipated to increase or decline by more than 10%, does the document include a
discussion of the causes and/or consequences of these changes in fund balance?
6. If an entity has no governmental funds, is the change in the fund equity presented
for (1) the entity as a whole, (2) the main operating fund, and (3) each significant
fund?
7. If an entity has no governmental funds and the fund equity of any significant fund
or other funds in the aggregate is anticipated to change by more than 10%, does the
document include a discussion of the causes and/or consequences of any change in
fund equity that is greater than 10%in either a significant fund or other funds in the
aggregate?
8. For biennial budgets is the change in fund equity presented separately for both years
of the biennium?
Discuss fund balance changes over 10%.
Explanation
This criterion requires that beginning and ending fund balances, as defined by the entity in
the budget document, be shown for the budget year, as well as revenues, expenditures, and
other financing sources/uses. This information must be provided for each major fund and
for the nonmajor governmental funds in the aggregate. The information may be included
on the schedule(s) with the three-year data or may be presented on a separate schedule(s).
Both the beginning and ending fund balances must be clearly labeled. If the entity budgets
on a cash basis,the schedule may show beginning and ending cash rather than fund balance.
If the fund balances of any major fund or the nonmajor funds in the aggregate are expected
to change by more than 10%, the changes should be discussed in the budget
message/transmittal letter or at the bottom of the schedules identifying the change. If the
ending fund balances are greater than the amount or percentage that the financial policies
require to be set aside, the entity is encouraged to state that fact. Changes in fund equities
for entities with no governmental funds should be reported.
Refer to GFOA's best practice on Determining the Appropriate Level of Unrestricted Fund
Balance in the General Fund and Determining the Appropriate Level of Working Capital
in Enterprise Funds.
#F6. Mandatory: The document shall describe major revenue sources, explain the
underlying assumptions for the revenue estimates, and discuss significant revenue
trends.
Criteria Location Guide Questions
1. Are individual revenue sources described?
Revenues 2. Do the revenue sources that are described represent at least 75 percent of the total
revenues of all appropriated funds?
3. Are the methods used to estimate revenues for the budget year described (e.g., trend
analysis, estimates from another government or consulting firm)?
4. If revenues are projected based on trend information, are both those trends and the
underlying assumptions adequately described?
Trend graphs can be useful in revenue analysis.
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Explanation 12
This criterion requires that the major revenues of the appropriated funds in the aggregate
be identified and described. If an outside source (e.g., another government or consulting
firm) provides an estimate of the revenue for the budget year, that fact must be clearly
stated. If the entity uses trend analysis to project particular revenue, a discussion of the
revenue trend is required in addition to any schedules or graphs depicting the revenue trend.
If the projections are based on trend analysis,the discussion must identify factors that affect
the trend, such as changes in the local economy, a new housing development, or fee
increases. Do not just focus on General Fund revenues.
Refer to GFOA's best practice on Financial Forecasting in the Budget Preparation Process.
#F7: The document should explain long-range fmancial plans and its effect upon the
budget and the budget process.
Criteria Location Guide Questions
1. Are long-range financial plans identified?
Long- 2. Do your long-range financial plans extend out at least two years beyond the budget
range
year?
Financial 3. Is there a concise explanation or illustration of the linkage between the entity's
Plans long-range financial plans and strategic goals?
Include long-rangejinancial plans that extend
beyond the budget year.
Explanation
This criterion requires the identification of long-range financial plans that extend beyond
the budget year. The impacts of the long-range financial plan upon the current budget and
future years should be noted.
Refer to GFOA best practices on (1) Long-Term Financial Planning, (2) Establishment of
Strategic Plans (3) Budgeting for Results and Outcomes and (4) Multi.-Year Capital
Planning.
#F8. Mandatory: The document should include budgeted capital expenditures,
whether authorized in the operating budget or in a separate capital budget.
Criteria Location Guide Questions
1. Does the document define "capital expenditures"?
Capital 2. Does the document indicate the total dollar amount of capital expenditures for the
Expenditures budget year (both budget years for biennial budgets)?
3. Are significant nonrecurring capital expenditures described along with dollar
amounts? (Information in a separate CIP document does not satisfy this criterion.)
4. If the entity has no significant nonrecurring capital expenditures, is that fact clearly
stated in the document?
Include discussion on major capital projects.
Explanation
This criterion does not mandate any particular definition of"capital expenditures," only
that whatever definition is being used by the entity be disclosed.
After defining capital expenditures, the entity should indicate the total dollar amount of
such expenditures for the budget year. The entity is encouraged, but not required, to
provide a summary of capital expenditures by major project, type, fund, or user.
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Recurring capital expenditures are those that 1) are included in almost every budget and 2)13
will have no significant impact on the operating budget. For example, the construction of
a new school building, because of its significant impact, would almost always be
considered nonrecurring, even if such construction is a frequent occurrence. If the entity
has only insignificant recurring capital expenditures,the document should clearly state that
fact.
If the entity has any significant, nonrecurring capital expenditures, the document should
describe these items (i.e. indicate the project's purpose and funding sources) and indicate
the amount appropriated for the project during the budget year(s). Also, the document
should include the amount appropriated for significant, nonrecurring capital expenditures
in the budget year.
Refer to GFOA best practices on (1) Establishing Appropriate Capitalization Thresholds
for Tangible Capital Assets, (2) Determining;the Estimated I"seful Lives of Capital Assets,
(3) Incorporating a Capital Project Budget in the Budget Process, (4) Multi-Year Capital
Planning and (5) Presenting the Capital Budget in the Operating Budget Document.
#F9: The document should describe if and to what extent significant nonrecurring
capital expenditures will affect the entity's current and future operating budget and
the services that the entity provides.
Criteria Location Guide Questions
1. Are anticipated operating costs associated with significant nonrecurring capital
Impact of expenditures described and quantified (e.g., additional personnel costs, additional
Capital maintenance costs, or additional utility costs)? (Information in a separate CIP
Improvements document does not satisfy this criterion.)
on Operating 2. Are anticipated savings or revenues expected to result from significant
Budget nonrecurring capital expenditures described and quantified (e.g., reduced utility
costs, lower maintenance costs)?
Explanation Quad°➢and discuss operating impacts.
This criterion asks for the identification of specific significant financial impacts upon
current and future years that are likely to result from significant nonrecurring capital
expenditures (other than the cost of the improvements themselves). The entity may make
its own determination of what is "significant." However, some examples of significant
costs are those that (1) would require an increase in the tax rate OR (2) would result in a
reduction in spending elsewhere in the budget OR (3) would require additional staff.
Additional anticipated revenues and expenditure reductions also should be briefly
described and quantified. Concepts like net present value,return on investment, or payback
period may be used.
Identification of the anticipated non-financial impact of significant nonrecurring capital
expenditures on services is encouraged. Examples include a cleaner environment,
improved response time by public safety employees, smaller class sizes in schools, and
access to public buildings and public transportation by all citizens.
#F10. Mandatory: The document shall include fmancial data on current debt
obligations, describe the relationship between current debt levels and legal debt
limits, and explain the effects of existing debt levels on current operations.
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Criteria Location Guide Questions 14
1. If the entity has legal debt limits:
Debt • Are debt limits described?
• Are the amounts of debt limits expressed in terms of total dollars,
millage rates or percentages of assessed value?
• Are the amounts of debt subject to debt limits identified in the same
terms used to describe the debt limits themselves?
2. If the entity has no legal debt limits, is that fact clearly stated within the budget
document?
3. If the entity does not have and does not intend to issue debt, is that fact clearly
stated?
4. Is the amount of principal and interest payments for the budget year (two years for
biennial budgets) shown for each major fund (for appropriated funds), for each
significant unappropriated fund and for other funds in the aggregate?
Debt to maturity schedules breaking out
Explanation principal and interest can be useful.
Entities should describe their legal debt limits. The legal debt limits may be expressed in
terms of total dollars, millage rates, or percentages of assessed value. A graph may
supplement the calculation, but may not be a substitute for the calculation. If an entity has
no legal debt limits, that fact should be clearly stated within the budget document. The
budget document may omit the debt limits requirements only if the entity (1) has no debt,
(2)has no intention of issuing debt, and (3) states this fact in the budget document.
The document should indicate the impact of debt on the current budget by indicating the
total amount of principal and interest payments to be paid during the year for each major
appropriated fund and for each significant unappropriated and for other funds in the
aggregate (two years for biennial budgets). If the entity has variable rate debt or a balloon
payment that could significantly alter debt levels in the future, the entity is encouraged to
disclose that fact. A repayment schedule may be presented,but is not required. The entity
is encouraged to discuss coverage requirements and actual coverage for revenue backed
debt. An entity may wish to discuss debt that it anticipates issuing separately from its
discussion of outstanding debt. An entity should consider concisely describing the purpose
and type of individual debt obligations.
#03. Mandatory: A schedule or summary table of personnel or position counts for
prior, current and budgeted years shall be provided.
Criteria Location Guide Questions
1. Is a summary table of position counts provided for the entire entity?
Position 2. Does the table include the prior year, the current year, and budget year position
Summary counts?
Schedule 3. Are changes in staffing levels for the budget year explained?
4. If there are no changes in staffing levels, is that item noted?
Position counts are frequently presented
showing individual department totals
Explanation summing to a grand total.
This criterion requires a presentation of position counts or full time equivalents (FTEs)
within the entity. Presentation may be by position and/or by summaries of positions.
Position summaries within individual departments may supplement, but not be a substitute
for, the position counts on the consolidated schedule. If presented, position counts on the
departmental summaries should tie to the consolidated position count schedule for the
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entity as a whole. Staffing level changes must be explained. If there are no staffing level15
changes, then that fact must be noted.
#04. (Mandatory): The document shall describe activities, services or functions
carried out by organizational units.
Criteria Location Guide Questions
Department 1. Does the document clearly present the organizational units (e.g., divisions,
Descriptions departments, offices, agencies, or programs)?
2. Does the document provide descriptions of each organizational unit?
Discuss major financial or program changes occurring in the different departments.
Explanation
This criterion requires a clear presentation of the organizational units within the budget
document. A narrative description of the assigned services, functions, and activities of
organizational units should be included. The presentation of relevant additional
information should be included (e.g., shift in emphasis or responsibilities or major changes
in costs).
Refer to GFOA's best practice on Departmental Presentation in the Operating Budget
Document.
#05: The document should include clearly stated goals and objectives of
organizational units (e.g., departments, divisions, offices or programs).
Criteria Location Guide Questions
Unit Goals 1. Are unit goals and objectives identified?
and 2. Are unit goals clearly linked to the overall goals of the entity?
Objectives 3. Are objectives quantifiable?
4. Are timeframes on objectives noted? Consider a matrix linking department
goals to overall entity goals
Explanation
This criterion requires that unit goals and objectives be clearly identified. The relationship
of unit goals to the overall goals of the entity should be apparent(perhaps, in the form of a
matrix). For purposes of this criterion, goals are long-term and general in nature, while
objectives are more short-term oriented and specific. Note when goals and objectives are
expected to be accomplished.
#06: The document should provide objective measures of progress toward
accomplishing the government's mission as well as goals and objectives for specific
units and programs.
Criteria Location Guide Questions
1. Are performance data for individual departments included in the document?
Performance 2. Are performance data directly related to the stated goals and objectives of the unit?
Measures 3. Do performance measures focus on results and accomplishments (e.g., output
measures, efficiency and effectiveness measures) rather than inputs (e.g., dollars
spent)?
Link performance measures
to unit goals and objectives
and include efficiency and
effectiveness measures.
Explanation
Performance measures should include the outputs of individual units and provide a
meaningful way to assess the effectiveness and efficiency of those units. The measures
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should be related to the mission, goals, and objectives of each unit. Include information for16
at least three years (the prior year actual, current year estimate or budget, and budget year).
Refer to GFOA's best practice on A Systematic Approach to Managing Performance and
Performance Management for Decision Making.
#C3: The document should include statistical and supplemental data that describe the
organization, its community, and population. It should also furnish other pertinent
background information related to the services provided.
Criteria Location Guide Questions
1. Is statistical information that defines the community included in the document(e.g.,
Statistical/ population, composition of population, land area, and average household income)?
Supplemental 2. Is supplemental information on the local economy included in the document (e.g.,
Section major industries, top taxpayers, employment levels, and comparisons to other local
communities)?
3. Is other pertinent information on the community(e.g., local history, location,public
safety, education, culture, recreation, transportation, healthcare, utilities, and
governmental structure) included in the document?
Do not just copy the CAFR statistical/supplemental
Explanation section into the budget document
Background information should be included in the budget in the form of statistical and
supplementary data, either in a separate section or throughout the document. The goal is
to provide a context for understanding the decisions incorporated into the budget document.
The presentation should include factors that will affect current or future levels of service
(e.g., population growth, economic strength in the region, or a change in the size of the
school age population).
Refer to GFOA's best practice on The Statistical/Supplemental Section of the Budget
Document for information that should be included as part of this discussion.
#C4: A glossary should be included for any terminology(including abbreviations and
acronyms)that is not readily understandable to a reasonably informed lay reader.
Criteria Location Guide Questions
Glossary 1. Is a glossary that defines technical terms related to finance and accounting, as well
as non-financial terms related to the entity, included in the document?
2. Are acronyms or abbreviations used in the document defined in the glossary?
3. Is the glossary written in non-technical language?
Make sure acronyms and nonfinancial terms are also included
Explanation
The use of technical terms and acronyms ought to be kept to a minimum, to enhance the
value of the document to the majority of stakeholders. When technical terms and acronyms
are used,they should be clearly and concisely described in the glossary.
#C5: Charts and graphs should be used, where appropriate, to highlight fmancial
and statistical information. Narrative interpretation should be provided when the
messages conveyed by the graphs are not self-evident.
Criteria Location Guide Questions
Charts 1. Are charts and graphs used in the document to convey essential information (e.g.,
and key policies, trends, choices and impacts)?
Graphs 2. Do the graphics supplement the information contained in the narratives?
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Including captions with graphs can be helpful
Explanation
This criterion requires that graphics be used to communicate key information in the budget
document. Graphics should enhance the budget presentation, and clarify significant
information. The entity determines the most effective format to present graphic
information. Graphics may be consolidated or included throughout the document.
Normally, narratives should accompany the graphs. Graphs can be used for such topics as
revenues, expenditures, fund balances, staffing, economic trends, capital expenditures,
service levels, performance measures, or general statistical information. Originality is
encouraged, but not at the expense of clarity and consistency. Consider using captions to
explain the significance of graphs.
#C6: The document should be produced and formatted in such a way as to enhance
its understanding by the average reader. It should be attractive, consistent, and
oriented to the reader's needs.
Criteria Location Guide Questions
1. Is page formatting consistent?
Understand- 2. Are the main sections of the document easily identifiable?
ability and 3. Is the level of detail appropriate?
Usability 4. Are text, tables, and graphs legible?
5. Are budget numbers in the document accurate and consistent throughout the
document?
Explanation Make sure the docu,nen d tis easy to read.
The goal of this criterion is to make sure that the document itself contributes to the
effectiveness of the communication to readers. Sequential page numbering throughout the
document is encouraged. Budget numbers (both financial and operational) should be
accurate and consistent throughout the document. Put similar topics in the same section.
Refer to GFOA's best practice on Making the Budget Document Lacier to Understand and
Presenting Ofticial. financial Documents on Your Government's Website.
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