The city of San Marino is beginning its budget process much earlier this year.
The first of many budgetary meetings took place on Wednesday, Jan. 20 in an effort to be more transparent to residents, who have been asking for more details on how the city spends its money. Finance Director Lisa Bailey and City Manager John Schaefer gave a presentation on the city’s budget calendar, the proposed criteria for budget comparisons between cities, the budget document, the Government Finance Officers Association criteria, the status of the ad hoc committee and budget policy.
The fiscal year typically runs from July 1 to June 30. The mid-year budget review took place on Feb. 27 last year. The study session in 2015 was on May 13, with further discussion on May 29 and the budget itself was passed on June 10.
This year’s budget calendar is expected to extend from Jan. 20 to June 8. The mid-year budget review will happen on Jan. 29 this year, with nine meetings to follow.
Comparable Criteria by Department
“You’re never going to get an apples-to-apples comparison,” said Schaefer stating they get as close as possible in comparing San Marino’s budget to those of other cities every year.
Department heads will now be required to find comparable cities, according to their own criteria.
The Planning and Building Department, for example, will look at population, square miles, number of housing units, average household income, department budget and departmental functions. Police Department criteria would be population, square miles, average household income, location and services provided while the Fire Department criteria would be population, square miles, asset value protected, location and services provided.
The majority of departments share population, square miles and services provided. One resident during the Jan. 20 meeting asked why salaries weren’t also compared. Bailey said the point is to see if the city is operating well against others. Schaefer added that salary comparisons come up every time contract negotiations take place.
Budget Document
The budget document is broken down into funds, revenues and expenditures. Expenditures are broken down department-by-department, while revenues and funds are summarized with graphics for a better illustration.
Schaefer provided the West Hollywood budget book as an example of something to aspire to. It was colorful, tabbed and laminated for easy use. Although he does not suggest San Marino spend a lot of money in making the city’s budget book, the organization and detail of West Hollywood is what he liked.
It’s also possible to do a really nice budget book online, and print it in black and white on regular printer paper, he said.
Councilmember Steve Talt asked for the online budget to be more easily accessible by placing it on the city’s main page. Footnotes for items that need extra information were also suggested.
GFOA Award
The Government Finance Officers Association Award helps cities to prepare high quality budget documents through a series of questions. These questions cover the introduction and overview, financial structure, policy and process, financial summaries, capital and debt, departmental information and document-wide criteria.
San Marino followed the GFOA standard years ago but eventually city council decided it was too much information. Bailey said she would be happy to begin on this kind of budget again because she already gathers all the necessary information.
Aside from some extra work, the only real downfall is that it costs money to submit the budget to the GFOA and certain policies would have to be implemented. Schaefer said it would be difficult to ramp up for a GFOA submittal in just one year because of the policies that would need to be adopted.
City councilmembers can decide if they want to bring back the GFOA standard or start considering a portion of the questions in their budget without going through the official process.
Status of the Ad Hoc Committee
The Ad Hoc Finance Committee, which is conducting a management audit of each department, met for the first time on Tuesday, Jan. 5 to receive reports from heads of Administration, Public Works and Parks. These three departments will be the focus of the first committee. Several more committees will be formed to look into the other departments.
Members of the first committee include Mayor Allan Yung, Councilmember Steve Talt, Al Boegh, Stefan Dietrich, Hal Harrigian, Susan Jakubowski and Dan Biles, who is taking over for Bob Twist.
These individuals will do their own research and ask further questions of department heads to assess how well Administration, Parks and Public Works are being managed. Their process will be the basis for how the rest of the departments are assessed.
Talt said the ad hoc committee and the budget process go hand-in hand, but they are also running on different timetables. Though committee members can review their initial findings at the relevant budget meeting, it doesn’t mean their results are finalized.
Vice Mayor Richard Sun suggested a deadline so the process doesn’t drag on.
Schaefer said he expects that the ad hoc committees will not be able to get though all the departments before the budget is passed. However, the process will help with future budgets.
Budget Policy
The San Marino City Council is the ultimate authority on all city money. All budget amendments, such as additional allocations, have to be approved by the council.
Certain policies are understood, but not written. For example, there is no amount required to be in city reserves, however, there seemed to be an understanding between council members that there should be a specified number.
The city manager is accountable for budget expenditures on a fund level and may approve transfers from one department to another including personnel and capitalized expenditures.
