Thursday, March 5, 2015

Budget basics: There are no roll-over minutes

Sometime in the last week someone said to me, "If $100,000 per year was budgeted for West Buechel drainage projects for seven years and the money was never spent, that means there is now $700,000 now available for drainage projects."

No.

That's not the way budgets work. If budgeted amounts are not expended before the end of the fiscal budget year, I hope the money is still in the bank. But, that money is no longer in the budget unless the new budget says otherwise.

Think of a household budget.

If you budget $1,800 per year for gas and electric but you actually spend only $1,500 and you have $300 left over, does that mean you spend $2,100 for gas and electric the next year?

No.

It means you spend the extra $300 on something else or you add the $300 to your savings account.

A city with an annual budget the size of West Buechel's should have an established written policy for how to deal with budget surpluses at the end of the year, everyone should know what that policy is and they should insist the Mayor and City Council obey. Or else..

I bet a dozen chocolate covered donuts from Heitzman's that West Buechel does not now have and never did have such an established written government policy concerning budget surpluses.

Let's come up with one.

 

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