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<br />145 University Ave. West www.lmc.org 9/10/2024 <br />Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 © 2024 All Rights Reserved <br />This material is provided as general information and is not a substitute for legal advice. Consult your attorney for advice concerning specific situations. <br /> <br /> <br />HANDBOOK FOR MINNESOTA CITIES <br />Chapter 20 <br />Municipal Budgeting <br /> <br />Learn the characteristics of city budgets as a work plan and communication tool. Understand the <br />budget cycle and structures, sources of city revenue, typical expenditure categories, and planning for <br />multiple-year expenditures, like infrastructure, with a separate capital budget. Become aware of how <br />GASB and Truth in Taxation impact budgeting. <br />RELEVANT LINKS: I. Public versus private budgeting <br />Minn. Stat. § 412.221. Cities are under great pressure to streamline operations and meet strict <br />financial standards at the same time. Sustainability is an overarching <br />concern for cities. Simply adopting last year’s budget is not acting in the <br />city’s best interest. <br /> Done thoroughly, city budgets reflect city plans, policies and goals regarding <br />services and sound resource management. Consider city goals, what <br />programs and services citizens want in the city and then look to sustaining or <br />allocating funding for those goals, using the budget document as an <br />important communication tool revealing a city’s plan for the coming year <br /> A city is a municipal corporation but budgeting in the public sector is <br />different than it is in the private sector. The table below illustrates some of <br />the major differences in terms of scope, law, and process. <br /> <br />CITIES <br />PRIVATE OR NON- <br />GOVERNMENTAL <br />ORGANIZATIONS (NGOS) <br />Provide services and programs for the <br />entire community. <br />Provide services to a discrete set of <br />customers. <br />Budgets focus on public safety and <br />well-being of the community as a <br />whole. <br />Allocate money to meet shareholder or <br />owner expectations for profit. <br />Must fund a wide variety of activities <br />from safe roads and clean water to <br />economic development. <br />Focus spending on narrowly defined <br />programs or services. <br />Subject to a significant number of state <br />and federal mandates or laws that <br />legally require cities to provide certain <br />services but do not provide funding for <br />them. <br />Not subject to such extensive and <br />numerous legally binding mandates that <br />require both provision and levels of <br />service. <br />12