City Budget

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for the City's 2018 Budget Plan!

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the 2018 Budget Summary Booklet!

What is a Budget?

One of the primary tasks of the mayor is to propose and submit a budget. In Richmond, the budget is a biennial fiscal plan beginning a two-year cycle on even-numbered years. However, the adopted budget only covers one of the two years.

 

Developing a budget is a yearlong process. In the City of Richmond, City Council passes a biennial budget no later than May 31, which then goes into effect at the beginning of the new fiscal year on July 1st. However, almost just as soon as the new budget takes effect, work on a new budget begins. The graphic below gives a clear picture of the process that goes on in order to develop a city budget:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It is important to note that the time to make the biggest impact on a budget is during the phase from October through December. During this period, while departments are preparing their own budgets, they are finding money and putting it towards programs. If citizens wait too long to speak up about an idea, they will most likely not be able to get the money into the budget, as the departments would have already allocated the money they expect to various programs. This hints at the need to speak earlier rather than wait.

 

It is important to note that City Council is constantly amending the budget throughout the year. Budget amendments are constantly passed in order to accept funds from different grants that the city receives and to then appropriate those funds to the respective department or agency. A budget amendment increases the revenue for a specific item in the budget by the exact amount of funding it is receiving, and then specifically outlines in that ordinance the department and program it is going to, and for what purpose. Thus, even once a budget is passed, it is never fully finished.

 

 

Why is a Budget Important?

A budget is more than just the funding of certain programs and departments by a municipality. Because the budget for the City of Richmond involves the spending of public money, a budget reflects a community’s values and priorities. The money allocated to various programs, initiatives, and departments should align with what the citizens want and seek for their city.

 

In Richmond, the city uses the Balanced Scorecard Strategic Management System (Balanced Scorecard) to link the city’s mission and vision to develop strategies to achieve specific goals and performance objectives. As part of this system, the city developed seven focus areas to direct its efforts, which include:

 

  • Unique, Healthy and inclusive Communities and Neighborhoods

  • Economic Growth

  • Safety and Well-Being

  • Transportation

  • Education and Workplace Development

  • Sustainability and the Natural Environment 

  • Well-Managed Government 

 

These focus areas are also known as the “Pillars of Excellence” that guide the city’s planning and operations. 

 

 

What Makes Up a Budget?

The city’s budget is based on a system of different funds, or groups of related accounts, to help control and maintain the resources meant for specific objectives and activities. There are three categories of funds: governmental funds, proprietary funds, and fiduciary funds.

 

Governmental Funds:

  • The General Fund, Debt Service Fund, Capital Projects Fund, and the Special Revenue Funds; fund the majority of governmental functions in the city

    • General Fund: primary operating fund; accounts for all revenue and expenditures that are not required to be accounted in other funds; revenues include real estate and personal property taxes, as well as other local taxes, distributions, etc.

    • Debt Service Fund: accumulation of financial resources for payment of interest and principal on all governmental fund long-term debt, costs, and related costs on bonds and notes

    • Capital Projects Fund- all financial resources to be used for the acquisition, construction, or renovation of capital facilities or other equipment, that ultimately become city fixed assets

    • Special Revenue Fund- accounts the proceeds of specific revenue sources that are legally restricted to expenditures on specific purposes; include federal reimbursements grants, and donations designated for specific uses

  • Proprietary Funds: account for city activities that operate almost like private sector businesses; must measure net income, financial position, and changes in financial position;

    • Enterprise Funds: account for operations such as public utilities, where goods or services are provided to the general public and are financed through user charges, and where sometimes determination of revenue, expenses, and net income is deemed appropriated for capital maintenance, public policy, management control, accountability or other purposes.

    • Internal Service Funds: used to finance goods or services provided by a city department or agency to other departments or agencies on a cost-reimbursement basis, such as fleet management

  • Fiduciary Funds: used to account for assets held by the city in a trustee capacity or as an agent for individuals, private organizations, other governments, or even other funds; the fiduciary funds in Richmond include the City’s Retirement System Trust Fund, among many others