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HomeMy WebLinkAbout03/08/2022 05. Biennial Budgeting for Cities 1,),„ BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 5. For Meeting of: March 8, 2022 ITEM TITLE: Biennial Budgeting for Cities SUBMITTED BY: Jennifer Ferrer-Santa Ines, Director of Finance and Budget SUMMARY EXPLANATION: The development and adoption of a budget by the City is a lengthy and intense process subject to limited amounts of available time which reduces opportunities for deliberating other issues of importance by the City Council; and biennial budgeting will provide an opportunity for better long- range and strategic financial planning and consolidation of efforts invested in the budget development and approval process, thereby improving services to the citizens of Yakima. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: I nformational Only ATTACHMENTS: Description Upload Date Type 0 2/28/2022 Corer Memo 2 4�f F I FINANCE TO: Mayor and City Council FROM: Jennifer Ferrer-Santa Ines, Director of Finance and Budget DATE: February 28, 2022 RE: Biennial Budgeting for Cities The City of Yakima today prepares an annual budget with the planning process beginning in March each year and commencing with Council adoption in early December. The bulk of the work takes place during the months of June through September. Developing the budget involves multiple meetings with departments to ensure department needs are addressed while producing a balanced budget that meets Council's desired priorities. The month of October is reserved as Budget Study sessions for Councilmembers where members in the community are encouraged to participate. In the past, these have been four consecutive discussions over all sections of the City budget including presentations from departments covering both operations and capital projects. There are a number of municipalities in the State preparing biennial budgets. These include Renton, Federal Way, Bellevue, Kirkland on the west side and Kennewick, Walla Walla, Pasco, Pullman as neighboring cities of Yakima. A growing list of cities, both small and large have transitioned to biennial budgeting. A longer list of cities with biennial budgets can be found at Municipal Research and Services Center (MRSC) at the link below. MRSC - Biennial Budgeting The benefits of biennial budgeting include the following: ✓ Reducing the amount of time spent budgeting over a two-year period and freeing up time for other projects in year two. ✓ Staff can utilize off budget years to plan or focus on other important areas in the department. ✓ Allows for the jurisdiction to think strategically over multiple years instead of just balancing the budget for a single year. 3 FINANCE Due to the nature of changes in priorities or the availability of more current information, the budget is amendment/modified as necessary throughout the year, once per quarter. Council is briefed on these matters and the information is included for Council review and approval throughout the year. Transitioning to a two-year budget will not change the opportunity to amend the budget, if needed. Adopting a biennial budget process would provide staff and Council some freed up time to focus on other important priorities for the organization and the community. Quarterly updates of the City's financial status, monthly treasury reports and disbursements will continue to be included in Council materials to promote transparency and periodic fiscal review. RCW 35.34.010 outlines the intent of the legislature to authorize cities to establish by Ordinance a biennial budget and to provide for budget modifications. The full language of this legislative intent is below. RCW 35.34.010 Legislative intent. The legislature hereby recognizes that the development and adoption of a budget by a city or town is a lengthy and intense process designed to provide adequate opportunities for public input and sufficient time for deliberation and enactment by the legislative authority. The legislature also recognizes that there are limited amounts of time available and that time committed for budgetary action reduces opportunities for deliberating other issues. It is, therefore, the intent of the legislature to authorize cities and towns to establish by ordinance a biennial budget and to provide the means for modification of such budget. This chapter and chapter 35A.34 RCW shall be known as the municipal biennial budget act.