CC - Item 1A - Budget Workshop 12-12-171
To meet the Strategic Plan goal for the
Finance Department:
Strategy 5 –Achieve and maintain a
structurally balanced General Fund budget
with regular, recurring revenues that are
sufficient to cover ongoing expenditures
Action Item B -Evaluate feasibility of
implementing a two-year budget cycle
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Staff surveyed 12 cities
◦6 cities currently have a 2-year budget process
Cities of Arcadia, Brea, Laguna Beach, Monrovia, San
Gabriel, and Temple City
◦6 cities currently has the traditional one year
budget process
Cities of Alhambra, El Monte, La Habra, Monterey
Park, Pasadena, and Pico Rivera
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Thinking further out
Having the starting point for Year 2
Only have to update the changes for Year 2
Eliminate printing of budget book in Year 2
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Difficult to balance a two-year budget
Not everyone is always on the same page
Difficult to implement during tough economic times
Difficult to project top revenue sources such as Property Taxes, TOT, and
Sales Taxes
Difficult to project new revenues sources as a result of legislative rulings
and required reporting requirements
Difficult to project CalPERS retirement costs
Difficult to project which CIP’s to fund
Difficult to project department programs
More work in the first year
Changes are presented as needed for Year 2 to City Council, budget book
will be outdated with lots of changes
Some cities have two-year budget process, but only adopt a one year
budget (redundancy of work)
Does not take into account other factors such as turnover of staff,
programs cancellation, delay in CIP projects
Difficult to project the Fund Balances & accurately estimate GF Reserves
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Option 1: Continue with the 1-Year Budget
Process
Option 2: Proceed with the 2-Year Budget
Process
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