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2013 Colorado Budget 101 Presentation

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Jarrod Biggs

on 24 July 2014

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Transcript of 2013 Colorado Budget 101 Presentation

olorado Local Government Budget Basics
“The budget process mediates between groups and individuals who want different things
from government and determines who gets what.”
– Irene Rubin, The Politics of Public Budgetin

What is a Budget?
A budget is one of, if not the most important policy document created by a local government.
When do you Budget?
All local government budget years are based on the
year per statute
What goes into the Budget?
Statutory Requirements
What happens next?
The 2013 General Fund Budget is primarily derived from sales tax and property tax revenue with a small amount of License and Fee revenue and other revenue. The primary uses are for the categorical expenditures that are laid out. Some key aspects of this year’s budget are reduced revenues in comparison to some previous years. The economic recession has reduced sales tax revenues and we expect that revenue to be relatively flat. During 2011 there were unexpected expenditures in General Government due to a costly settlement. We have also had to make cuts in this 2012 budget due to depleted fund balances. The budgetary basis of accounting is modified-accrual.

Budget Message
Budget Detail
Town of Elway
Who Does the Budget?
Jarrod Biggs

Budget Program Manager
Divsion of Local Government
P: (303) 866-4493
C: (720) 357-6981
Local Government Budgeting
The budget represents a number of things depending on your perspective and intent:

a financial plan
a tool for accountability
a reflection of priorities
a communications device
Why do we do it?
Because we have to.
To provide guidance on receiving and using resources in an upcoming timeframe.
29-1-102 (9)
Important Dates:
August 25th
October 15th
December 10th
December 15th
December 31st
January 31st
Each local government is directed to appoint a point person to shepherd the budget through the necessary process.

This can be:
Finance Director
See: dola.colorado.gov/e-filing
Revenues and Expenditures
Revenue Limits
Revenues and Expenditures
- Including explanation of expenditures by object and revenues by source.
Three years of Comparative Data
Budget Message
- Write your local governments story for the year
Beginning and Ending Fund Balances
Budget Balance
- Expenditures must be less than or equal to revenues plus fund balances.
A Lease Purchase Supplemental
- When applicable
Signed Certification Statement
Property Tax
AV Projections first available Aug. 25

Sales Tax

Other Revenues
Proprietary Funds?

Investment Income?

Intergovernmental Revenue?
(Assessed Value x Mill Levy) ÷ 1000 = Revenue
Rates x Users = Revenue
Rate of Return x Principal = Revenue
There are a number of ways to budget for expenditures:
Incremental Budgeting
Performance Budgeting
Zero Based Budgeting
Fixed-ceiling Budgeting
Open Ended Budgeting
Priority Based Budgeting

Factors to consider:
Consumer Price Index
Price agreements
Commodity pricing
> or =
must be
Look at national, state, and your own local indicators! (you will find out what is effective over time)
5.5% Property Tax Revenue Limitation
Other Limitations
The 5.5% limit value is calculated annually by DOLA after the preliminary certification of value and the final certification of value is provided by the county assessors. The estimate (Aug.) and final value (Dec.) are made available online and are sent to those local governments when they are calculated.
It is important to look into your own local government’s history to see if voters have created any other limitations that may apply. In particular, home rule municipalities many times may have revenue limits written into their charters.
Fiscal Year Spending Limit – The FYS limit actually limits the revenue a local government can collect without requiring a refund. Generally when people talk about TABOR they are discussing this aspect of the law.

Revenue collections are limited to a base year value, plus inflation, plus a local growth factor. There are exempt revenues which include: gifts, collections for another government, federal funds, pension fund earnings and others.

Property Tax Revenue Limit – The same as the FYS limit but specifically applied only to property tax revenue.

Mill Levy Increase Limitation – Any increase in mill levy must be pre-approved by a vote of the local governments constituents.

Debt Limitation – Increased general government debt must be pre-approved by a vote of the local government’s constituents.

3% Emergency Reserve Requirement – All local governments must keep 3% of their FYS value as an emergency reserve to be used only in declared, non-financial emergencies.
It is important to know and understand any of your own local limitations
"De-Brucing" or I can keep whatever revenue I want!
Many local governments have had elections to remove themselves from provisions of TABOR and/or the 5.5% Limit.

Each local government must craft their own ballot language to take to the vote, therefore each result has the ability to be different;
It is important if your local government has de-bruced to have the language and a legal interpretation of what that allows your local government to do.)

A local government can not “de-bruce” from the requirement to keep a 3% emergency reserve.
Aka - Voter Approved Revenue Change
Enterprise Funds
Funds that operate primarily on a fee-for-service basis, are exempt from being included within a local government’s FYS limit if they receive less than 10% of their revenue from governmental sources (taxes).

These funds are typically for Water, Wastewater, Recreation, Utility or other types of activities.
Submitting the Budget
- E-filing Portal

We have developed an e-filing portal to expedite the process of filing budgets. It is a simple sign up process to set up a "budget contact" account which will have the ability to file budget related documents to DOLA.

Otherwise send it to us:
Division of Local Government
c/o Budget Program
1313 Sherman St. Rm. 521
Denver, CO 80203
Adopting the Budget and Certifying A Mill Levy
The process to certify a levy, is to communicate with the Board of County Commissioners of each county in which a local government is situated.

The process should follow:
Once completed, and budget hearing has been held, the budget is adopted.
The calculated mill levy is certified by the governing body.
An appropriation is passed.
Once completed, the certified mill levy should be communicated to the BOCC(s)
(see form DLG-70) -->

Once the budget is adopted, mill levies certified, appropriations completed, and the levy communicated to the county. Send your budget to DOLA!
Amending the Budget
For any amendment, a
budget hearing must be noticed
and held just as in the regular budget adoption process.

A budget
is a transfer between two funds that have been appropriated

A budget
is to expend unexpected revenue that is received in excess of budgeted revenue.
Property tax revenue above projections can not be expended until the following budget year.

A budget
is a reduction in an appropriation to reflect reduced revenues.
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