City of Cottonwood Administrative Services General Manager Rudy Rodriguez admits it: The budget is not the sexiest topic in the world.
Making matters worse, the budget is confusing, even in its simplest form. What might be immediately transparent to a municipal budget expert is obscure to the average person. For example, in the document prepared in advance of the city’s major 2018 budget discussions, Rodriguez presented three data points for the completed fiscal years 2007 through 2016: Original budgets, revised budgets and actual budgets.
The disparity between each is marked. In 2010, there was an approximate $90 million difference between the original budget, $132,562,405, and the actual budget, $41,818,105.
Upon seeing this figure, taxpayers might think, “The city saved $90 million” and immediately wonder where the money is. This line of reasoning is incorrect, however. According to Rodriguez, both the original and revised budgets are both “snapshots of a place in time” and wish lists, representing what the city could receive in funds and what it might spend them on.
The fact is the city will not receive all of those funds — and, thus, will almost certainly not complete every project, employ every position and give to every nonprofit it budgets for a given year.
“In Arizona, we have to have budget authority,” Rodriguez said.
Budget authority means that each potential revenue source is accounted for and given line items to apply it to: If Cottonwood receives $500 in grant funds toward an educational program, it must have budgeted it for that purpose.
If the city does not receive those grant funds, the educational program is in all likelihood dead in the water and the $500 does not appear in the actual budget for the year.
“If there’s a grant potential, though, we need to jump on it,” Rodriguez said, adding that the original budget and revised budget represent the potential for money coming in. “This is what we’d like to do.”
By contrast, the actual budget represents what funding in fact came in and went out. The actual budget cannot be calculated until the fiscal year is over, when everything can be accounted for.
Following the trend of the last decade, 2018’s original budget will be in excess of $20 million more than the actual budget, showing what the city hoped for and what actually resulted over the course of the year.
“If it’s not funded, we don’t make expenditures to it,” Rodriguez said. “If you spend a dollar, there has to be a dollar.”
For 2018, Cottonwood will likely budget only three new positions, an economic development adviser, an engineering intern and a police community service specialist. The positions require grant funding totaling $121,755. If the grants don’t come through, those people will not be employed and the $121,755 will not be in the 2018 actual budget.
Rodriguez admitted that the presentation of the budget might confuse some people, but said that municipal budgets are not like personal budgets. They represent what cities and towns may get at the beginning of the budget process, what they may get three or four months into the budget process, and what they actually received — and spent — three quarters of a year later.
“People try to make this simple,” Rodriguez said, gesturing to the simplified version of the budget, admitting that the matter is both complicated and worthy of community investment. “We’re trying to get the public involved .... We need more people to come in and join us for the meetings.”
The city will hold a public hearing and tentative budget adoption Tuesday, June 6. A second public hearing and final budget adoption will take place Tuesday, June 20. Times and locations forthcoming.