1. The Process of Balancing the City Budget Patrick Callahan, Consultant Callahan Municipal Consultants Handouts and presentations are available online at www.iowaleague.org.

2. General Overview  Identify the Issue  Define the Process  Discussion – What works in your City?

3. So…What’s the Problem?  Revenue Reductions  Increasing cost of operation  Demand for more services  Distain for government and taxes

4. Revenue Reductions The $8.10 General Fund Limit Commercial property rollback Multi-Family Property rollback Impact of TIF

5. Increasing Costs  Employee health insurance  Salaries – “Market Place” Competition  FICA & IPERS Contributions  Materials & Supplies

6. Demand for more services  Better police protection  Improved street & storm sewers  Emerald ash bore – tree removal  More trails

7. New “Facilities” - More Annual Costs Aquatic Centers Parks and Trails Libraries & Community Centers

8. Suggestions – New Facilities Can the City handle the debt? What are the annual operating costs? Will we be willing to give up “something else” to keep it?

9. Public demand for more stuff  Purse grants & donations  No consideration to annual cost of operation  That’s your problem?

10. The Budget Process – Preliminary Steps Read Chapter 6 of IPA Handbook Attend MLA Workshops Consider Goal Setting Session Update Capital Improvements Plan

11. Budget Preparation Process Identify & prioritize the services Estimate the expenses Identify and forecast the revenues

12. City Budget – First Draft Expenses vs Revenues No shortfall? “Lucky For You” The budget “Gap”

13. Budget “Gap” – What to do? “Across the Board Cuts” Fight About It? More meetings – more discussions

14. Balancing the Budget – The Process 1.Identify potential reductions 2.Identify new revenues 3.Prepare a “list” and Be Inclusive

15. Balancing the Budget – (continued) 4. Preparation of the “List” Item Potential reductions - $$$ Impact or services Net savings - $$$ Comments /Observations

16. Balancing the Budget – (continued) 5.Discuss and clarify 6.Individual Rankings – Mayor & City Council 7.Scoring System – A,B,C, & D

17. Balancing the Budget – (continued) 8.Prepare Summary of Rankings 9.Scoring spreadsheet – all rankings 10.Summary of reductions

18. Balancing the Budget – (continued) 11.Share and discuss 12.Go down the “List” 13.Proceed until budget is balanced

19. Advantages of this Process Systematic approach Equal “voice” & equal opportunity Reduce probability of “fights” Clear and transparent process

20. Additional Advantages Could save time Emergency “back up list” in case of emergencies Update annually – helpful tool

21. Disadvantages or Potential Pitfalls Major splits – The 3 “A’s” and the 3 “D’s” Lack of commitment The “all D’s” Council Member Lack of follow through

22. Additional Disadvantages Public pressure Department Head concerns Peer pressure

23. General Discussion How does your Council balance the budget? What has worked? What has not worked?

24. Budget Reductions 1.How has your City reduced costs? 2.What services has your City reduced or eliminated?

25. Revenue Enhancements 1.What new sources of revenue has your City implemented? 2.What existing sources of revenue has your City increased?

26. Additional Suggestions 1.Capital Improvements Plan (CIP) 2.Multiple Year Budget ( 3 to 5 years) 3.Continue to refine the Process

27. Available Handouts 1.Anamosa Budget Ranking Process 2.Balancing the Budget – Creative Solutions – IMMI 3.Budget Options for Small Cities – ILC Workshop

28. Available Handouts 4.Capital Improvements Planning – CIP Handout 5.G.O. Bonds versus Revenue Bonds 6.Budget Workshop Slides – IMPI

29. Contact me Patrick Callahan, Municipal Consultant Callahan Municipal Consultants, LLC 417 Kaitlynn Avenue Anamosa, Iowa 52205 563-599-3708 E-mail – callahan.cmc@gmail.com Website – callahanmunicipalconsultants.com