Budget Process in 4 Simple Steps

Lauren Sommers

It’s hard to believe that it’s already almost March and budget season is in full swing.

If you haven’t already done so, the first step in the budget process is to appoint a budget officer. Typically the budget officer is the chief executive officer (i.e. the City Manager or the Fire Chief), but your finance officer or even your attorney may function as the budget officer.

Step two is to review the composition of your budget committee. Your budget committee consists of the members of your governing body and an equal number of appointed electors. The appointed members of the budget committee may not be officers, agents, volunteers or employees of your government entity. If for some reason you cannot find enough electors for the budget committee, you may still proceed with the budget process. Just make sure that your minutes reflect the efforts you made to recruit citizen members.

Your third step is to make a copy of your proposed budget available for public review immediately after the budget officer releases it to the budget committee. Your budget officer must publish notice of the first budget committee meeting (where the proposed budget and budget message will be provided) as well as notice of the budget hearing held by your governing body.

Both the notice of your first budget committee meeting and the notice of your budget hearing can be published in one of four ways. The most common method of publication is to publish the notice in a newspaper of general circulation, at least 5 and not more than 30 days prior to the budget meeting or hearing. If you chose to publish in the paper, the notice of the budget committee meeting must be published twice. Notice of the budget hearing only needs to be published once. If your entity is located in Washington County, you must also send budget information to the County.

The notice of your budget hearing must include a summary of the budget approved by the budget committee. This financial information contains the approved budget, the current year budget, and the proceeding years’ actual resources and expenditures. The Oregon Department of Revenue publishes forms you can use to develop and publish your budget: http://www.oregon.gov/dor/PTD/Pages/localform.aspx.

The fourth step to adopt the budget. Remember, your governing body can make changes to the Budget Committee’s recommended budget. New information introduced at the budget hearing should be carefully considered prior to budget adoption. Changes to the budget after adoption generally require action by the governing body and sometimes require additional publications and public hearings. For this reason, all available information should be collected and considered during the budget process.

Your budget must be finally adopted on or before June 30.

Finally, in thinking about your budget, consider which projects and purchases are planned for this upcoming year. Not only will this process assist you in projecting your entity’s expenditures and revenues, this level of planning will also allow you to provide the required notice of planned improvements to the Bureau of Labor and Industries (BOLI). State law requires that at least 30 days prior to budget adoption, your entity must submit to BOLI a “WH-118 form,” listing each public improvement your entity plans to fund in the upcoming budget period. For example, if you are planning to budget and use City funds to build a wastewater treatment plant in the next year, you must file a form WH-118 with BOLI at least 30 days before your budget is adopted. Form WH-118 is available on BOLI’s website at http://www.oregon.gov/boli/WHD/PWR/docs/wh118.pdf.

As always, if you encounter any legal issues through your budget adoption cycle (or if you learn of information or receive additional revenue requiring a change in your adopted budget) please contact your legal counsel as early as possible. Consistent with that old clich, an ounce of prevention is worth a pound of cure. It is much more cost effective and efficient to consult with your legal counsel before a problem develops.

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