Agenda Packet Cc - work session 6/23/2025

Home Browse Search

RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 9/10/2024 Municipal Budgeting Chapter 20 | Page 5 A city budget is a comprehensive financial plan for one year. It is a snapshot in time of city activities and services supported by discrete city funds for the coming year. In governmental accounting terms, a “fund” is a sum of money set aside for a specific purpose—not necessarily a separate bank account—but tracked on paper separately. The three basic city fund types are: Handbook, Financial Reports, Accounting and Auditing. • Governmental funds—used to finance most governmental services and based on tax revenues, special assessments, or issuing debt. The city’s general fund, debt service funds (to pay off bonds), and capital project funds are examples of governmental funds. • Proprietary funds—financing for governmental activities operating like a private business, for example, water and sewer utilities, electrical utilities, or municipal liquor stores. Service charges usually provide most of these funds. • Fiduciary funds—trust and agency funds used to account for assets a city holds in a trustee capacity or as an agent, for example, pension funds. Fiduciary funds cannot be used to support the city’s own programs. See Sections VI and VII, Revenues and Expenditures. Uniform Chart of Accounts, Office of the State Auditor. The Office of the State Auditor (OSA) provides the Uniform Chart of Accounts to facilitate the preparation of uniform annual financial statements. The outline of accounts may also serve as a useful checklist when preparing city budgets. Every city should consult this chart when preparing the annual budget and maintaining financial records. The OSA recommends the adoption of the uniform account numbering system for all cities, including cities under 2,500 in population, whenever practical. Preparing city budgets involves policy decisions about the use of money, and it helps cities make important decisions, tying funding to specific goals set by the council. During the budgeting process, city council members and staff look back to what programs and services worked the previous year and they look forward to what city activities may be changed, dropped, or increased in the coming year. III. Municipal budget is a plan To make a useful municipal budget, examine all city services and programs, for example, firefighting services, police protection services, water and sewer services, elections, park and recreation programs and maintenance, snowplowing, and any other city-funded activity. Include personnel costs, office supplies, computers, software, building and maintenance supplies, fuel costs, and any other equipment. These are the current expenditures. Next look at money coming in, or revenue, from all sources. 14