Budgeting with your Board Shelbi Frayer Department of

Budgeting with your Board Shelbi Frayer – Department of Treasury – FRC Director Frayer. S 2@Michigan. gov Sam Irrer – Rehmann – Assurance Sr. Associate Sam. Irrer@Rehmann. com

Where to Start? • More than just numbers – Need to tell a story • Tie the story to goals / purpose / mission • Example: This budget strives to balance the needs of the citizens and its employees, while ensuring fiscal responsibility and excellent service to the community! • Three main questions should be answered: • • • What happened in the past? What do we think will happen in the future? What are the challenges we will face? 2

Presenting to the Board • Know your audience • How much detail do they want/need? • Keep it simple • Use plenty of charts and graphs • Provide enough data and detail to help make decisions 3

Additional Info • Michigan Department of Treasury Budget Manual • https: //www. michigan. gov/documents/Uniform. Budget. Manual_16634_7. pdf • Board must approve appropriations • Need to monitor and amend budgets 4

The Past – Historical Data • Paint the current financial picture: REVENUE TOTAL TAX REVENUES 2010 305, 652 8 2011 303, 65 3 2012 351, 60 7 2013 348, 73 7 2014 338, 23 2015 2016 2017 2010 to 17 Change 338, 642 319, 829 350, 158 TOTAL SPECIAL ASSESSMENTS - -- -- - TOTAL LICENSES AND PERMITS - 14, 067 9, 25 123, 41 9 -- - - - 146, 247 142, 421 155, 592 - - - 28, 013 30, 903 20, 558 - - - 21, 389 17, 059 21, 401 18, 490 20, 360 23, 108 4, 94 TOTAL FEDERAL GRANTS TOTAL STATE GRANTS 15, 904 7 116, 872 1 TOTAL CONTRIBUTIONS FROM LOCAL UNITS TOTAL CHARGES FOR SERVICES - TOTAL INTEREST AND RENTS 50, 862 5 - -- 20, 541 TOTAL OTHER REVENUE TOTAL OTHER FINANCING SOURCES - 6 40, 000 TOTAL REVENUES EXPENDITURE 632, 389 4 2010 TOTAL GENERAL GOVERNMENT 140, 972 2 TOTAL JUDICIAL TOTAL PUBLIC SAFETY TOTAL PUBLIC WORKS TOTAL HEALTH AND WELFARE TOTAL COMMUNITY/ECONOMIC DEVELOPMENT TOTAL RECREATION AND CULTURE TOTAL OTHER EXTRAORDINARY/SPECIAL ITEMS 129, 818 3 59, 084 78, 094 0 -138, 30 7 -- 133, 420 TOTAL FINES AND FORFEITS 166, 53 16, 923 3 9, 71 3 15, 000 542, 89 3 2011 149, 95 1 -106, 89 3 42, 593 2 78, 092 4 - - 44, 892 53, 893 9 25, 109 16, 778 6 - -- 145, 67 -36, 12 25, 835 8 25, 19 -27, 17 24, 457 0 24, 11 605, 55 2012 183, 64 15, 622 2 1 6 -4 552, 95 8 2013 214, 69 1 22, 37 10, 14 108, 19 - 649, 81 2014 159, 67 88, 308 6 47, 08 46, 959 7 78, 09 8 41, 88 30, 59 89, 546 6 1, 94 2, 773 48, 101 1 35, 484 5 -- 98, 17 47, 48 88, 04 0 58, 17 123, 61 1, 86 -100. 00% 33. 13% -84. 59% 4. 19% -87. 64% 552, 781 2015 641, 687 2016 291, 209 344, 698 217, 556 - - - 96, 532 124, 470 104, 433 -19. 55% 37, 145 16, 614 18, 748 -68. 27% 95, 557 103, 211 93, 267 19. 43% -93, 30 111, 115 3 14. 56% 2, 520 1, 822 575, 760 -8. 95% 2017 2010 to 17 Change 54. 33% 5 1, 592 66, 989 69, 238 55, 432 23. 48% 27, 825 994 100, 176 298. 96% - - -

The Past – Historical Data Revenue & Expenditure Trend $ 700 000, 00 $ 650 000, 00 $ 600 000, 00 $ 550 000, 00 $ 500 000, 00 $ 450 000, 00 $ 400 000, 00 2011 2012 2013 TOTAL REVENUES 2014 2015 2016 2017 TOTAL EXPENDITURES 6

The Past – Historical Data POPULATION 3 650 3 600 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 3 700 20 3 750 20 3 800 07 96 000, 00 94 000, 00 92 000, 00 90 000, 00 88 000, 00 86 000, 00 84 000, 00 82 000, 00 80 000, 00 3 850 3 550 TAXABLE VALUE 7

The Past – Revenue Sources • Where does our money come from? TOTAL TAX REVENUES TOTAL STATE GRANTS TOTAL OTHER REVENUE TOTAL INTEREST AND RENTS TOTAL CHARGES FOR SERVICES 3, 7% 0, 9% 4, 0% 27, 0% 3, 6% 60, 8% 8

The Past – Expenditure • What is our money spent on? TOTAL GENERAL GOVERNMENT 0, 8% 0, 3% 3, 1% 9, 3% TOTAL PUBLIC SAFETY TOTAL OTHER TOTAL HEALTH AND WELFARE 36, 5% 15, 6% TOTAL RECREATION AND CULTURE TOTAL PUBLIC WORKS 16, 8% 17, 5% 9

The Past – Historical Data • Provide data to help make decisions: 10

The Past – Historical Data • Provide data to help make decisions: 11

The Future – Assumptions • How will each assumption impact us? 12

The Future – Projection vs Past The definition of “Fund Balance” is the excess of fund assets over fund liabilities in a governmental fund. Fund balance is classified as either non-spendable, restricted, committed, assigned, or unassigned. The fund balance is one gauge of a government’s financial health 13

The Future – Long Term 14

Challenges – Key Issues • • Where did we get our assumptions from? • • Why are revenues going down? Why is expenditure increasing? What may cause our assumptions to be wrong? Legislation changes • How will they impact us and the budget? Options / Decision points • What decisions need to be made? Is this budget aligned with our goals / purpose/ mission? 15

Target Activity 16

Next Steps • Check of understanding- Agreement • Set Expectations- Board and Administration • Layout & Delivery- Determine best way to present the budget (Board and Public) 17