How Departments Prepare the Budget
Internal Departmental Budget Review
2013 Total Request Budget
The operating budget is the single, most important decision- making document passed by the Council each year. It establishes the City’s financial plan and serves as a policy document, operation’s guide, and a communications device for the Citizens of Chattanooga. The City Charter requires the Mayor and Council to prepare a balanced budget and adopt it by ordinance each year. The ordinance must establish a property tax rate that generates (along with other sources) sufficient revenues to operate the various departments within the City. Please see City Charter Title 6, Chapter III §6.80 thru Chapter IV, §6.91.
The first step in developing an annual budget is preparation of the budget calendar and budget policies by the Mayor and City Finance Officer (CFO). In early January, the City Finance Officer and the Management and Budget Analysis (MBA) staff assess the current and five-year financial plan in conjunction with current and anticipated economic conditions to establish the overall policies to be used by departments in preparation of the annual budget.
The MBA staff develops written instructions and standardized forms to be used by the departments in preparing the budget. These documents along with the budget calendar and policies are made available on the City’s intranet in early January.
The CFO delivers the annual budget message that provides general guidance for budget preparation that is consistent with the goals and objectives set forth by the Mayor and Council. Department administrators may be asked to prepare multiple budget scenarios/alternatives depending on revenue and expenditure projections.
The Budget Process using Technology
The MBA staff uses in-house, secure software and a windows based file share with structured rights to provide departments with a secure budget preparation process. This allows individual departments to electronically prepare and submit operations and capital budget request forms to the Budget Office. The process facilitates more efficient review and compilation of budget information by the MBA staff into a single citywide budget proposal for citizens’ and Council’s review.
Review Mission and Goals
Departments start the budget process by reviewing their mission and goals. Each department’s mission and goals drive the programs and services offered to the public. By focusing on a clearly defined mission and measurable, concrete goals, departments can ensure that their budget requests match the needs of the citizens.
Based on the mission and goals set by each department, priorities are set for the coming budget year. These priorities may be new programs or services, or new targets for existing programs and services. Department administrators are held accountable for performance/results through a process called “ChattRESULTS” (see “Performance Review” below) whereby each goal must be measurable – that is, the results of the investment of dollars must be clear -- and each department is accountable for reaching their stated goals.
Identify Needed Resources
Once a department sets its priorities, detailed estimates of program revenues are submitted to the Budget Office. The MBA staff summaries all departmental/program revenue estimates along with all other general revenue estimates such as taxes, etc. to determine the level of resources available to achieve the goals identified by the Mayor. These estimates are monitored throughout the budget process and changed as required, using updated data.
Through a process called ChattRESULTS, the Mayor, City Finance Officer and MBA staff conducts quarterly performance reviews with Department administrators to determine if the goals and objectives established by the Mayor and Council are accomplished. These meetings have increased accountability and opportunities for departments to collaborate and provide quality services more efficiently and effectively.
Review Departmental Priorities
After departments have submitted their budget priorities, the Office of Management and Budget Analysis reviews the requests to ensure consistency with the City’s overall mission. The MBA Office then presents departmental funding requests along with supporting priority alignment information to the Mayor for consideration in the Operating Budget for recommendation to Council.
After receipt of the departmental budget request, internal meetings are held with individual department administrators, Chief of Staff, CFO, and the MBA staff to present their budget requests in the context of the programs and services they plan to offer the citizens.
Once the internal budget review is complete, a balanced budget is prepared for consideration by the Council and Citizens. Meetings of the Budget & Finance Committee and public hearings are scheduled during the months of May and June.
The City Charter requires that the Mayor and Council adopt a budget ordinance. The recommended budget ordinance requires two readings by the Council and must be approved before June 30th. Prior to July 1, the City adopts an interim budget appropriating funds for the usual and ordinary expenses of City government in an amount not to exceed 1/12 of the preceding fiscal year’s operating budget for each month that the interim budget is in effect.
In May and June, public hearings are held to review the budget requests of the City departments and agencies. The Budget & Finance Committee may request department administrators and agency representatives to appear before the Council to answer questions about their budget requests and performance. All members of the Chattanooga community are given the opportunity to address the Council about any aspect of the proposed budget.
The Council, having heard from the representatives of departments and agencies, as well as the public, considers what changes, if any, it may wish to make to the Mayor’s proposed budget. These changes are made to the Mayor’s proposed budget ordinance and a substitute budget ordinance is filed that reflects the changes. Two weeks after approval by Council, with two readings, the operations and capital budgets become law effective July 1st.
Approved budget is made available on the City’s website.
July 1 to June 30
Upon passage, departmental budgets are posted in the City’s accounting records and used as a basis for operations. Expenditures are monitored by MBAs and Accounting staff to ensure operations are within the allocated amounts and in compliance with budget priorities approved by Council.
June 30 to DECEMBER
The Accounting Office closes the books, the independent certified public accountants selected by the Audit Committee of the Council perform an annual audit, and Finance staff prepares and issues a Comprehensive Annual Financial Report.
The City Finance Office and MBA staff kick off the annual budget by preparing a budget calendar.
Each department prepares budget options and revenue estimates for review by the Finance Department’s Office of Management and Budget (MBA).
The Mayor, City Finance Officer, and MBA staff meet with each department to discuss request. The Total Operations Budget Request is presented to Council. Non-profit and Agency budgets are submitted to the City Council for review.
The Finance staff continue review of Operation and Capital Budget requests, the Total Capital Budget is presented to Council.
The Mayor and/or the City Finance Officer presents the Mayor’s Recommended Budget to Council.
The Council and the Budget & Finance Committee conduct public hearings as well as hearings with each individual department. The budget is approved on two readings, and may be amended or substituted on a second reading. MBA staff prepares substitute budget ordinances for the Budget & Finance Committee as required.
The Council passes the budget ordinances and the Mayor signs the budget ordinances into law. If the Council fails to pass a balanced budget by June 30, the City operates on an interim budget until such time as the budget receives final approval by the Council.
General Fund ($201,255,000)
Governmental Type Funds ($319,351,419)
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The charts below show the appropriations by function for the fiscal year ending June 30, 2012.
General Funds ($201,255,000)
Governmental Type Funds ($319,351,419)
Enterprise Funds ($68,219,900)
Finance and Administration
101 East 11th Street Suite 101
Chattanooga, TN 37402(map)
Daisy W. Madison, CPA, CGFM
Administrator/City Finance Officer
(423) 643-7399 (fax)
Vickie Haley, CPA, CGFM
Finance Operations and Management & Budget Analysis Office
Brian Smart, CPA, CGFM
Fredia F. Kitchen, CPA, CGFM
Director of Management & Budget Analysis