I’m not going to write any more posts on the City budget that say “budget season has started”.  Budget season now officially never ends – we had our first presentation from the staff last night about their analysis of the city’s fiscal position.

There wasn’t really anything earth-shattering in the analysis but the big difference between this year and previous years is that, for the first time ever, the finance committee is looking at projections and analysis that include spending forecasts.  This was done as a part of my motion to approve a grant that allowed us to hire some fire fighters.

I made this request as I was growing increasingly concerned about expenditures in out-years to which the Council has committed the City.  There is a big police grant that will be due in a couple of years and another large grant that allowed us to hire some fire fighters/medics that will come online in 3 years.  Both of these grants have the Feds pay for 3 years of salary and the City pay for the positions thereafter.  If you’re not looking at expense forcasts and doing your budgeting year by year (which is what we were doing), you run the risk of being forced into a corner because you haven’t been looking down the road.  In our case, we found that if keep driving the same road, we’ll have to raise taxes in a couple of years for these things.  Now that we know what that looks like we can plan and address that situation before it arrives.  In all things, time = options.  More time, more options.  Less time, fewer options.

Expense forecasts are not universally embraced by small-town leaders.  Many local politicians are afraid of them – although it’s just information.  I think that the reason for this is that many localities are run like very small business – almost on a cash accounting basis.  This might be fine when you’re getting started but as anyone knows who has run a business with more than one employee, you have to switch to accrual accounting sooner than later.  Management needs to understsand its liabilities.  You cannot stick your head in the sand and hope to prevail.  An informed leader is a more effective leader.  You’ll also need a business plan that extends for more than a single year.  The City is in the same situation (our business plan is actually about 7 years old) and we need to be looking down the road.

The other aspect of expense forecasting that makes local electeds nervous is that it “sets expectations”.  I agree that expense forcasting may create expectations but I do not find that sufficient reason to avoid it.  I believe that the expectation of our constituents is that the Council should plan for the future and to me that is more compelling.  If a particular analysis shows that giving raises every year causes a problem in 3 years then the Council needs to have the backbone to make a change.