The impetus for this article was actually a conversation that I recently had with a local resident. I was in a downtown financial institution when the citizen expressed frustration with not immediately being able to contact the city manager. “They told me he was in a budget meeting that would last all afternoon. What in the world is he doing in a budget meeting this time of year?”

Like all governmental budgets, Sidney’s budget is adopted into law as the official plan detailing how much the city plans to spend during a particular period of time and how it will pay for the expenses. I like to think of it as a living, breathing document. Perhaps another way to look at it is that it is a similar to a road map, with several ways to get to the same point.

Each budget actually has roots in council’s discussion of priorities. Councilmembers spend considerable time discussing the city’s priorities. In fact, every two years, council meets for a full day retreat to determine the top priorities for the next two-year period.

However, just like our household budget, emergencies can change those priorities. A leaking roof on City Hall may take precedence over the replacement of park play equipment. A blown engine in the city’s aerial ladder truck may force a re-prioritization of the replacement schedule for trucks within the fire department. Such an occurrence may also trigger a supplemental appropriation to ensure that the funds are legally able to be expended for the desired project.

Together the operating budget and the capital budget are the city’s annual financial plan. All funds, except federal and state grant funds, are subject to appropriation by council.

The budget is “balanced” for each department’s fund. The proposed cash resources of each fund (beginning of year unencumbered fund balances plus estimated receipts) will always have to exceed appropriations.

When necessary, the following budget-balancing strategies are used, in order of priority. They include 1) reducing expenditures through improved productivity; 2) shifting expenses to other parties; 3) creating new service fees or increasing existing fees; 4) seeking tax rate increases; or, 5) reducing or eliminating services.

It is the policy of the city to have the annual operating and capital budgets approved prior to Jan. 1 of each year. The city strictly follows procedures prescribed by Ohio law in establishing its budgets as follows:

1) The County Budget Commission has suspended the requirement to prepare a tax budget. In lieu of the tax budget, on Jan. 1 of each year, the city will submit to the Budget Commission a report of estimated revenue and actual unencumbered cash balances by fund. Thereafter, the County Budget Commission will issue an Official Certificate of Estimated Resources (OCER).

2) Unencumbered appropriations lapse at year-end. State law provides that no contract, agreement or other obligation involving the expenditure of money shall be entered into unless the finance officer first certifies that the money required for such contract, agreement, obligation or expenditure is in the treasury, or is anticipated to come into the treasury, before the maturity of such contract (O.R.C. 5705.41).

3) All funds of the city have annual budgets legally adopted by the City Council. The exception is that when the city receives federal or state grant funds to aid in paying the cost of any program, activity, or function of the city, the amount received is deemed appropriated for such purpose (O.R.C. 5705.42).

The city manager acts as budget officer for the city and submits a proposed operating budget to the City Council on an annual basis. Public meetings are held to obtain taxpayer input. The Council enacts the budget through passage of an ordinance.

Not unlike the local resident mentioned above, there are those who believe that once the city’s annual budget is approved, there isn’t much additional work to do regarding administering the budget. The reality is that overseeing the budget is a year-round activity.

This includes monthly finance and income tax generation reports, a monthly report to City Council which we formally vote to approve, and something most readers may never have heard of or if you have, know very much about. Rolling quarters is the term applied to the quarterly review of each department’s budget.

This quarterly review occurs the month after the end of the fiscal quarter (April, July, and October). Attending this review are representatives from the finance department, the city manager, the respective department heads and whomever they decided to bring with them to the review (either for moral and/or technical support, depending upon the condition of their departmental budget).

The purpose of these reviews is to find out if there are any potential problem areas within any of the departmental budgets. It is far better to discover early any potential budgetary issues than to be surprised later in the year, when adjustments are far more difficult to make. Rolling quarters also enables the participants to catch expenditures that might have been expensed against the wrong line-item.

If sometime in the future, you hear the terminology rolling quarters spoken about at City Hall, you will know that it is the quarterly financial review of each department and not a group of adults playing with coins.

Officials from the Ohio Auditor’s Office recently completed its audit of the city of Sidney’s financial statements for the year ended Dec. 31, 2016. It was once again a successful audit in that the city’s financial statements received an unqualified opinion. An unqualified opinion, sometimes called a “clean” opinion, means that the financial statements fairly present the city’s financial position, changes in financial position and cash flows.

In my next article, I will write more about the city’s financial record keeping. The article will focus attention on the awards our finance department annually has received for their work.