Budgetary Act and Internal Controls
The City of Batavia operates under the Municipal Budget Act as defined under in the Illinois Compiled Statutes. The budget estimates for both revenues and expenditures/expenses for the fiscal year provide the legal level of control at the fund level and provide the spending authority for the fiscal year. The budget is administered by the Director of Finance under the appointed title of Budget Officer. The Budget Act does not require appropriations to be passed but rather an annual budget must be adopted prior to the year the funds will be expended. The City of Batavia's fiscal year begins January 1. Budgetary control is maintained on a line item basis. The City's financial software issues a report anytime a line item exceeds the budgeted amount. Under Budget Law, individual line items may exceed the budget. A review of the total department budget is done monthly by the accounting department and a request for revision/amendment is sent out if deemed necessary. Purchase orders do not roll over from 1 budget year to the next and must be re-issued and re-budgeted in the next year if they are not completed within the same budget year.
Budgetary Goals & Strategic Planning
The City Council begins establishing budget goals early in the year when they participate in strategic planning sessions. The City Administrator and Finance Director begin asking departments to review their current year budgets and plans for the next year in August. At that time, departments begin determining what projects will see completion and what if any projects will need to carry over into the next budget year. In addition, departments are asked to prepare requests for any new services or programs being planned for the coming year. While the City of Batavia does not do multi-year budgeting, long-range plans are discussed each budget year and are reviewed as part of the current budget goals and objectives. Long-range plans must be incorporated into the planning process to assure current year decisions are made prudently.
Budget Preparation & Entry
The City of Batavia Budget includes the 2 prior years of actual expenses, the current year budget and projected actual expenses along with the proposed budget. Beginning in August, the Finance Department rolls the budget year to allow data entry into the City's budget program. At this time, departments may begin entering current year projections and the proposed budget. Salary spreadsheets are provided to department heads to assist in the budgeting process. Departments also begin compiling and reporting revenue projections to the Finance Director for data entry. Historical trends and projected economic and community growth are used in making revenue projections. Once all data entry is completed in early October, an initial report is prepared for the City Administrator to begin "balancing" the budget.
Needs Assessment/Finalizing the Budget
In October the City Administrator and Finance Director meet with the individual department heads to review any major changes, discuss objectives and review capital requests and requests for additional staff. Budget cuts are always part of this process. While it is difficult to make cuts to any department, the City Administrator must weigh the individual department needs against the needs of the City as a whole.
During this time the Finance Director projects what fund/unreserved cash balances will remain at the end of the current fiscal year. These levels will be used in determining the "bottom line". The City of Batavia seeks to maintain cash reserves to cover at least 60 days of operating expenses in the General Fund and 90 days of operations for the Enterprise Funds.
After the budget meetings with the department heads, the City Administrator and Finance Director meet with individual City Council members to discuss any major items in the budget and to address any concerns they may have prior to the Committee Meeting.
Inspection, Review & Adoption
In late October a preliminary budget is prepared and distributed to the City Council, department heads, the press, and copy is available at City Hall for review by the public. A copy is also posted to the City's website. The City must make the tentative budget conveniently available for public inspection at least 10 days prior to passage.
A Committee meeting is held in early November to officially review the budget. A presentation is made and major budget items or changes from the prior year are addressed. In addition revenue trends are discussed and any increase in fees or rates that are part of the budget are presented for review and approval. If changes to the budget are requested, the changes are made and amended copies of the budget are distributed to the Council. A second Committee meeting may be held if necessary.
The notice of the public hearing for the budget must be published in a newspaper having general circulation at least one week prior to the hearing. The public hearing is held at the second City Council meeting in November. After the public hearing is held, the budget may be further revised and passed without any further inspection, notice or hearing.
After the budget is passed a change may become necessary. The City Council has authorized line item transfers within funds to be done with approval from the City Administrator and Director of Finance. An annual report of line item transfers is made to the City Council for review. Line item transfers may not be used to increase salaries to hire staff nor may they increase the overall budget. Any increases to the budget must be presented to the City Council as a resolution for approval and at no time is an increase to the budget approved unless funds are available for the increase. Deletions to the budget can be made at any time and reported to the City Council with the report on transfers.
Carryover from one budget year to the next is allowed for a budgeted item that will not be received or for contracts that will not be completed within the calendar year. This procedure allows for appropriate accounting. Departments are encouraged to order budgeted items sufficiently in advance to reduce the necessity for carryovers. All carryovers must be completed and reported to the City Council by the end of the first quarter of the new budget year.