Budgets

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Budgets
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Budget

• Financial plan that outlines and forecasts the
  revenues and expenditures over a fiscal year

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Some Terms

• Fiscal year
• Allocated monies
• Expended monies
• Budget cycle
• Length of time required to prepare, administer
  close out a single year budget

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Budget Cycle
Fiscal Year 2009
Fiscal Year 2010 Fiscal Year 2011

• National Park Service 21 month cycle
• 2010 is in progress
• 2011 is under congress review
• 2012 preparation is beginning

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Town of Queen Creek, AZ

• November January
• Finance Dept examines revenues collected to date
  projected revenues
• Distribution of info, instructions and worksheets
  to depts.
• February - April
• Depts. prepare estimated budget expenditures
  revenues.
• The Finance Department compiles projections
• The Budget Committee (including three Town
  Council members) reviews departmental budget
  estimates.

• May - June
• The Budget Committee reviews and revises dept
  budgets and prepares the tentative budget
  summary.
• The Town Council reviews and adopts the tentative
  budget.
• June - July
• Tentative budget is published 1 a week for 2
  consecutive weeks.
• A public hearing held to discuss budget.
• The Town Council convenes special meeting to
  adopt final budget.
• The final budget is implemented

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Why do budgets?
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Why budget?

• Prediction of resources
• Prediction of a work schedule
• Used to make decisions
• Explains resource acquisition expenditures to
  stakeholders
• How goals are being met

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2 types of budgets

• Capital
• Operating

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2 types of budgets

• Capital
• Major purchases lasting 10 years
• Facilities, renovations, equipment
• Developed independently of operating budgets
• Covers 5-6 years (CIP)
• Priorities are reviewed shifted annually

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Priority Project Name Finance Source Revenue Expenses
1 LINCOLN LEISURE CENTER-CONSTRUCTION WORK CIF   220,000
2 SKATEBOARD PARK-CONSTRUCTION CIF   170,000
3 MCGRAW COMMUNITY PARK-2ND PHASE CIF   700,000
4 MCGRAW COMMUNITY PARK-2ND PHASE OSLAD 400,000 400,000
5 MCGRAW COMMUNITY PARK-PARKING LOT CIF   550,000
6 CONSTITUTION TRAIL(GROVE ST. SOUTH TO LAFAYETTE) TEA 1,000,000 1,000,000
CIF Capital Improvement Fund
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2 types of budgets

• Operating
• Annual, routine activities
• All revenues expenditures for day to day
  operation

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Operating Budgets

• Line item budgets
• Object classification budgets
• Program budgets
• Performance budgets
• Zero based budgets
• Running budgets

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Line Item Budgets

• Item
• Specific item or object for which monies will
  need to be allocated
• Postage, equipment
• Line
• Process of placing the items in a line so that
  all items appear on the budget sheet

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Line Item Budgets Process

• List all revenues
• Fees program 1
• Fees program 2
• Other sources
• List all expenditures
• Staff
• Utilities
• Office supplies
• Determine costs of each item

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Line Item Total
Revenue
Ticket Sales 1875
Reserve (Savings) 36
Total Revenue 1,911
Expenditures
Meal 900
Appetizers 131
Damage deposit 50
Rental fee 75
DJ 300
Mailing 53
Printing - invite 53
Printing - info sheet 14
Envelopes 60
Total Expenditures 1,636

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REVENUES
Program fees 6400

EXPENDITURES
Flights 1126.60
Rental Car 268.59
Hotel 2700.00
Gas 323.40
Meals 540.00
City Walk 140.92
Busch Gardens 130.90
Titanic Exhibit 31.84
Arabian Nights 113.20
Universal Studios 157.60
Disney Quest 56.24
Walk Disney Theme Parks 377.02
Medieval Times 134.72
Sleuths Mystery Dinner 75.02
Kennedy Space Center 76.00
Wet and Wild 78.70
Pleasure Island 33.70
Ripleys Museum 28.08

TOTAL 6392.53
1127/ 1130
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Line Item Budgets

• Advantages Disadvantages?

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Line Item Budgets

• Advantages
• Flexibility
• Add/delete items as needed
• No coding system
• Easy to administer
• Doesnt require ee to conform to a single system

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Line Item Budgets

• Disadvantages
• Easy to forget items, thus no allocated
• Confusion in comparing between departments
• Used most often in an informal situation

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Line Item Object Classification Budgets
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OCB

• Most common form of budget, similar to line item
  budgets
• Object - item for financial cost
• Salaries, phone bills
• Classification uniform method of grouping the
  objects into certain categories subcategories
• Personnel, Contractual services, Commodities
• See handout

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Example Classification

• Expenditure Classification by Object
• 2000 Services Contractual
• 2100 Communication Transportation
• 2110 Postage
• 2120 Telephone
• 2300 Printing, Binding, Advertising
• 2350 Advertising Publication Notice

Classifications Sub classifications Objects
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Table 13.2 Sample Object Classification Categories Table 13.2 Sample Object Classification Categories
Object total Sub-category total Category Total
1000 Personnel Services 2,037,000
1100 Salaries, Regular (Full Time) 1,500,000
1200 Salaries, Temporary (Part time) 25,000
1300 Wages, Regular (Hourly, FT) 250,000
1400 Wages, Temporary (Hourly. PT) 175,000
1500 Contractual employees 75,000
1600 Other Compensations 12,000

2000 Contractual Services 641,252
2100 Communication and Transportation 183,252
2110 Postage 5,002
2120 Telephone 23,000
2130 Freight and Express 10,000
2140 Travel Lodging 70,000
2150 Vehicles 32,000
2160 Gasoline, Oils and Lubricants 43,250
2300 Printing, Binding and Advertising 16,475
2310 Printing/Photocopying 12,000
2320 Typewriting/Word Processing 500
2330 Binding 500
2340 Photocopying Blueprinting 250
2350 Advertising Publication of Notices 3,225
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Advantages to OCB

• Uniform standardized
• Categories are provided
• Easy to set-up
• Can compare line items across areas

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Disadvantages to OCB

• May not be as flexible as needed
• May not be able to find the category needed
• Requires a lot of detailed cost estimates
• Multiple items in a category
• Repair to buildings
• Advertising

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Making Purchases

• How do you make purchases??

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Making Purchases

• Charge account
• Petty cash
• Procurement card
• PO.

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Normal Amusements Address line 1 Address line
2 Purchase Order
Date _______________ PO 1234567 Vendor
______________ Staff name ___________ Requisitio
n _________
Quantity Description Unit price Total price Code
1 Basketball backboard 450 450 246170-13
10 Adult League Basketballs 17 170 246172-13

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Budgets

• Program
• Performance

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Program Performance Budgets

• Based on a performance outcome model.

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Performance Outcome Model
Inputs
Programs
Outputs
Outcomes
Resources dedicated to the programs and services
Financial Human Technological Physical
Programs, products services offered Seniors
in organized golf activity Creative art
experience for parent child City
beautification
Volume of work produced or the number of people
served Number of senior golf leagues, of sr.
golfers served of Parent/child art classes
offered of art projects done together of
flowers planted
Benefits received from participation in the
program or service or from buying the product
Social interaction with other seniors improved
BMI or health New appreciation for each others
interests exposure to different mediums
increased art appreciation Decreased vandalism
in landscaped areas increased property values
Adapted from Measuring Program Outcomes A
Practical Approach (1996)
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Program Performance Budgets

• Program budgets outcomes based
• Performance budget outputs based
• Performance/Program Budgets outputs outcomes
  based

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Program Budgets (Outcomes)

• Focuses on outcomes (end results, g o) rather
  than inputs (LIB, OCB)
• Focuses on explaining why expenditures are
  required tied to agency mission, goals
  objectives
• Emphasis on effectiveness rather than efficiency
  of spending
• Not used at federal level
• Increasing in public, NPOs, commercial

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• Company Backroads Bike Tours
• Program Budget New York Wine Country Bike
  Tour
• Program Dates October 2-7
• Program Length 6 days
• of participants 20
• Description
• This bike tour starts in Skaneateles, NY and
  tours the wine country in the Finger Lake area.
  Riders stay at unique inns and B Bs along the
  300 mile route. Trip fee includes 5 nights
  lodging, 10 meals, beverages and snacks, van
  support expert experienced guides.

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• Goals
• 1. Gain appreciation of the wine country in the
  Finger Lakes area.
• 2. Meet and interact with riders from all over
  the country.
• 3. Develop a program that will help fight obesity
•  
• Objectives
• 1. Each rider will be given cue sheets describing
  the attractions and points of interest along the
  bike route each day
• 2. The trip will be advertised nationally to
  attract a wide variety of riders.
• 3. Riders will be given a training schedule to
  begin six months prior to the tour dates in order
  to achieve a needed level of physical fitness.
•  

Why use Program Budgeting???
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Advantages

• Narrative budget description rather than cost
  only
• Highlights value uniqueness of the program
• Forces in depth examination of the outcomes

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Disadvantages

• Potential of overselling a program
• Limited budget-cost detailed information
• Requires the use of another budget system to
  determine costs

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Performance Budgets (Outputs)

• Based on results oriented mgt
• Used by federal government since 1997
• More visibility of outcomes to public
• Improved decision making
• Accountability
• Efficiency
• Budgeting is more closely tied to service
  provision

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Performance Budgets

• Goal to allocate to accomplish specific units
  of performance
• Set performance indicators for each program
• Workload outputs
• Efficiency measures
• Effectiveness measures.

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Performance Budgets

• Workload outputs (program size or volume
  indicators)
• Number of
• parks managed
• conferences held
• programs offered
• worker hours
• teams in the league
• season tickets sold

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Performance Budgets

• Efficiency measures
• Acres mowed per hour
• Cost per person served
• Hotel capacity rates
• Effectiveness measures
• How well the program achieves its goals or meets
  a need
• satisfaction on program evaluation

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Table 13.5 Performance Budget Example
Goal Effectively efficiently manage natural resource areas within the park Goal Effectively efficiently manage natural resource areas within the park
Objectives Budget
1. Protect and maintain the raptor population by installing 25 perches for hawks and insulating electrical wires 72,508
2. Preserve 235 acres of wetlands by stabilizing shoreline erosion 123,500
3. Institute a 7 bus transportation system within the park to minimize traffic congestion, danger to pedestrians, air pollution, the need for parking lots 723,000
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Performance Budgets

• Advantages
• Accountability of expenditures
• Difficult to hide money
• Disadvantages
• s driven
• Not everything in rec is quantifiable

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Performance/Program Budgets (P/PB)
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P/PB Budgets

• Newest form of budgeting
• Focus on outputs outcomes
• Links objectives end results
• Shows relationship between inputs, outputs
  outcomes

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Questions on types of budgets??
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Budget Prep Philosophies Issues
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Budget Preparation Philosophies

• Zero based budgeting
• Open ended budget
• Alternative budgets
• Historical analysis
• Fixed ceiling budget

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Zero Based Budgeting

• Start with no previous budget
• Examine effectiveness value
• Objectives
• Outcomes
• Develop rank budget packages
• Top x of programs funded
• Used more in the commercial sector

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ZBB- Advantages

• All programs have equal opportunity for funding
• More detailed info is generated to justify
  program
• Objectives priorities are examined regularly
• Eliminates waste by eliminating programs not
  meeting objectives

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ZBB - Disadvantages

• Information overload
• Political nightmare
• Time consuming

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Open Ended Budget

• No restrictions on spending
• Submit budget for optimum programming
• Later adjust the budget to meet funding
  capabilities of agency
• Seeing less of this

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Alternative Budgets

• Prepare a basic budget then alternatives to it
• Alternatives not shared with board or public
• Time consuming!

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Historic Analysis

• Historical analysis
• Looks at past to predict future

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Fixed Ceiling Budget

• Limits growth of expenditures
• Doesnt see changing needs of organization
• Ie.1 growth, no growth budget
• Expenditures 155,000 v 1 156,550
• Can you just turn in last years budget?

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Bidding Process

• Invitation to Bid
• RFP
• Request for Quotation

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Bidding Process

• Invitation to bid (sealed/legal bids)
• Advertised contract or sealed bid
• Price is submitted in a sealed envelope
• All bids are opened at the same time
• Eg.
• Printing
• Equipment
• T-shirts

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• Body of Notice INVITATION TO BIDDERSThe State
  of Alaska, Department of Natural Resources,
  Division of Parks and Outdoor Recreation, subject
  to the provisions of AS 41.21.020 will receive
  sealed bids for Bunkhouse Warehouse
  Foundations, Project Number 70111-3, near Palmer,
  Alaska. Work includes replacing the existing
  foundations on two (2) historic buildings at the
  independence Mine State Historic Park.The bids
  will be received until 300 pm prevailing time on
  June 10th, 2003 at the division's Anchorage
  office, 550 W 7th Avenue, Suite 1340, Anchorage,
  Alaska 99501-3565 at which time and place the
  bids shall be publicly opened and read.Bids may
  be held by the Division for a period of forty
  (40) calendar days from the date of opening for
  the purpose of reviewing the bids and
  investigating the qualifications of the bidders
  prior to awarding the contract.Plans,
  specifications and contract documents may be
  obtained at a cost of 25.00 per set
  non-refundable by all who have a bona fide need
  for them for bidding purposes from the Director,
  Division of Parks and Outdoor Recreation, 550 W
  7th Avenue, Suite 1340, Anchorage, Alaska
  99501-3565. For information call
  269-8731.Disadvantaged Business Enterprises are
  encouraged to submit proposals.The TTD
  telephone number for hearing impaired persons is
  [phone].The State of Alaska is an Equal
  Opportunity Employer and it complies with Title
  II of the Americans with Disabilities Act of
  1990. Individuals with disabilities who may need
  auxiliary aids, services, and/or special
  modifications to submit a proposal should contact
  the TTD number no later than one week prior to
  the submittal date to make any necessary
  arrangements.Engineer's Estimate is between
  500,000 and 1,000,000.

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• INVITATION FOR BID
• JOHNSON COUNTY PARK AND RECREATION DISTRICT
• Sealed bids will be received by the Planning
  Development Department for the Johnson County
  Park and Recreation District (the District) at
  the JCPRD Administration Building located at 7904
  Renner Road, Shawnee Mission, Kansas, 66219 until
  200 pm on August 18, 2009 for the following four
  (4) bid items
• 1. Kill Creek Trail Concrete Sidewalk, Retaining
  Wall, Bridge Abutments
• 2. 2009 JCPRD Miscellaneous Concrete Work
• 3. 2009 JCPRD Miscellaneous Asphalt Work
• 4. Prefabricated Concrete Restroom Building,
  Fabrication, Delivery and Setup.
• Bids will be opened and publicly read in the
  JCPRD Administration Building Boardroom at the
  time and date set forth to accept bids. Bids will
  then be delivered to the Board of Commissioners
  of the District for bid award determination at a
  public meeting of such Board to be held within 30
  days following such bid opening.

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• Idaho Parks and Recreation issued the following
  news release
• Sealed proposals will be received by the State of
  Idaho, Department of Parks and Recreation (IDPR),
  5657 Warm Springs Avenue, Boise, Idaho 83716. All
  bids must be received at our Headquarters by 500
  p.m. Mountain Standard Time on Wednesday, October
  22, 2008, for THE PURCHASE OF USED OVER SNOW
  VEHICLES (OSVs).
• The following OSVs are being sold "as-is" and are
  available for examination by appointment, by
  contacting IDPRs Senior Buyer at [phone].
• One (1) 1999 Tucker and a tiller, with
  approximately 2872 hours, located in Elk River,
  ID.
• One (1) 1995 Pisten Bully ...

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Bidding Process

• Request for Proposal (RFP)
• Negotiated contract
• General specs outlined
• Submit proposal for what they will do for the
  price
• Negotiate details with the selected vendor
• Egs.
• Strategic planning

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PURPOSE The City of Seattle, Department of Parks
and Recreation, is issuing this Request for
Proposal (RFP) for an Operator to install and
manage the ongoing operation of a seasonal,
temporary Ice Skating Rink at Occidental Square
Park for the winter of 2009-2010. The selected
Operator will be allowed to propose a management
and business plan that includes concession
activities, event programming, and other
activities that generate revenues to help defray
their operating costs. The Department will
select the proposal that best addresses the goals
and purposes as described in the RFP. Please
review the following information carefully, and
thank you for your interest in this RFP. RFP
schedule.
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RFP SCHEDULE March 31, 2009 Complete Draft of
RFP Packet April 15, 2009 Final RFP Packages
available for pick up or mailed out to
potential proposers and interested
parties April 15, 2009 Publish Ad in news media
locally April 29, 2009 Deadline for written
questions to the Dept. from proposers May 6,
2009 Deadline for Dept. responses to proposers
questions May 27, 2009 RFP Submittal
Deadline June 2-3, 2009 Evaluation Panel reviews
and scores proposals June 9-10, 2009 Oral
interviews Optional by Department June 17, 2009
Recommendation to Superintendent of
successful proposer June 24, 2009
Superintendent decision, successful proposer
notified July 1, 2009 Issue a one year permit
to operate pending finalizing the long-term
agreement July - Aug. 2009 Agreement
negotiation September 2009 Law Dept. and Dept.
of Finance review of Agreement/Legislation Octob
er 2009 Proposed Ordinance is submitted to the
City Council November 2009 Agreement
commencement date
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Questions??