1. Forecast Revenues and Expenditures Annually, prior to the start of the budget process, the Office of Management and Budget (OMB) prepares a preliminary multi-year forecast of revenues and expenditures. The forecast process is the City’s best effort to understand and predict its financial future. Historical trends, current events, and predictions of future economic indicators are incorporated into the forecast. An accurate and comprehensive forecast process helps prepare for potential adverse events and circumstances. It provides a framework that assists Mesa’s elected officials and executive team in making important decisions about the direction of the City.
Analyzing historical financial data allows for the identification of seasonal patterns. The data provides context to the City’s current financial state. Historical data helps the City anticipate when, and to what extent, to expect different revenues and expenditures during the course of the fiscal year.
Once identified, these patterns are considered in relation to current events on the national, state, and local levels. Considering these events and their effects on the City’s financial situation is another important part of forecasting future conditions. Federal fiscal policy, state budget decisions, and local housing permit levels are all examples of factors that impact the City’s budget.
In addition, data predicting future economic trends is incorporated into the City’s forecast model. Through a partnership with the University of Arizona’s Eller College of Management, the City analyzes a variety of economic factors predicted for the next thirty years. These long-term factors, along with an understanding of current and past conditions, provide a framework for the forecast.
While preparing a forecast generally follows an annual schedule, it is also a continuous process. Forecasting models and the information on which they are based are constantly updated in an effort to provide the best predictions possible. City staff work to supply the Council and City Manager with accurate information from which decisions can be made.
2. City Council Reviews Strategic Plan and Establishes Budget Priorities An updated forecast is presented at a Strategic Planning Workshop held with the City Council, City Manager, and the City’s Executive team. The purpose of the workshop is to review the City’s Long-Term Strategic Plan, provide updates to Council on the status of the current fiscal year’s initiatives, and receive direction from Council on priorities for the upcoming budget cycle.
3. Base Budget Guidelines Established Based on the citywide forecasted resources available, departments are allocated a portion of those resources in order to fund their operations. Typically, departments are allocated an amount equal to their previous year’s ongoing expenditures plus additional personnel costs that have been updated with expected salary, benefits and supplemental pay.
4. Departments Prepare Operational Plans Departments develop annual operational plans that identify the planned work (action plan), and the personnel, materials, and capital items needed to conduct that work for one year. The operational plan identifies who will do what and with what resources. These plans identify a means to evaluate progress and achievement of desired outcomes.
5. Departments Submit Base Budget and Funding Requests Departments allocate their base budget to core business processes based on the resources apportioned to their department each year. Departments submit to the City Manager, through the Office of Management and Budget (OMB), requests for additional resources if applicable. The requests may be for one-time or ongoing budget adjustments. Based on available funding and Council priorities, the City Manager includes additional funding allocations.
6. OMB/City Manager Review Department Budgets and Performance Plans The Office of Management and Budget (OMB) and the City Manager review the budget submissions to ensure that Council priorities are followed, legal regulations are adhered to and City functions are properly supported. Budget submissions are reviewed for alignment with available resources.
7. City Council Reviews Department Budgets and Significant Issues OMB provides preliminary budget information to the City Council through a combination of reports and presentations. The City Council receives additional information from departments as needed. The City Council provides direction on issues and projects included in the upcoming budget.
8. City Manager Submits Budget to City Council Based on feedback received from the City Council, the City Manager submits a balanced budget to the City Council for consideration.
9. City Council Establishes Tentative Budget Per state statute, the City Council adopts a Tentative Budget, which sets a legal ceiling or maximum for the Final budget.
10. City Council Seeks Public Input The City Council requests public input during one or more public hearings.
11. City Council Adopts Final Budget Final feedback is incorporated into the budget and the City Council adopts a Final budget.
12. Departments Review Progress toward Achieving Plan Desired Outcomes
Departments review their progress toward achieving their plans’ desired outcomes. They determine what assisted them in exceeding performance targets or what contributed to not achieving departmental goals. They decide on actions to build on success or correct steps in the process to meet goals in the future.