Thursday, May 16, 2013

How to Spend the Money If You're a Government

We're at the time of year when we've spent the money from the fiscal year's budget and previously unbudgeted items are taking center stage.   These usually represent unforeseen demands on services that require attention.   

North Bay Village has been particularly undisciplined with approaching these and I think it's time to fix the process.   It's pretty straightforward.  For every time a resolution is brought up, the resolution should answer the following questions:

  • Is the Item Budgeted?
  • If not, why not?  
  •  What is the source of the money?
  • Can the budget support the item?
  • When will the item be accrued?
  • When will the money be distributed?
  • What is the impact on future budgets?
  • What happens if the item is not approved now?
These are standard issue municipal budget questions.  As a routine, they bring clarity to the questions and  keep them focused on the impact and the questions.  

Simple example.  Let's say a commissioner wants new Stop signs.  (None do to my knowledge but go with it.)  There is no budget for this.  Well, if we answer these questions, it might look like this:

  • The item is not budgeted. 
  • There was no need for the Stop signs last year but this year they have started to look shabby. 
  • It will costs $5,000 from the General Reserve Fund. 
  • $5,000 is 1% of the Reserve and will have low impact.  
  • The Money will be distributed in August.  
  • There is no impact for next year.  
  • If we don't fix the stop signs, cars will continue to crash into each other and the village will look messy.  
If you know that, then you can decide what to do.  

But usually the commission doesn't know that.  Staff should  provide it but they are not asked to.  I am hoping that at next week's meeting, where there will be several items for disbursement, both budgeted and not budgeted,   that the commissioners will ask these questions and if there are no answers, don't move ahead.  And if there are answers, then argue the value not the unknown. 

Kevin Vericker
May 16 2013 

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