5 years ago

Local Budgeting Manual, 150-504-420 - Oregon State Library - State ...

Local Budgeting Manual, 150-504-420 - Oregon State Library - State ...

6. Estimated

6. Estimated expenditures for capital outlay. Capital outlay is defined, as “Expenditures that result in the acquisition of or addition to fixed assets.” Fixed assets are defined as “Assets of a long-term character that are intended to continue to be held or used, such as land, buildings, machinery, furniture, and other equipment.” (Source: Leon E. Hay, Accounting for Governmental and Nonprofit Entities, seventh edition, Richard D. Irwin, Inc., 1985.) 7. Estimated expenditures for repaying bond principal and interest for each bond issue. Bond issues should be separately shown with separate estimates for principal and interest payments [ORS 294.352(7)]. Each bond issue should be identified by both the issue date and the exact payment date. Any unappropriated ending fund balance associated with the bond issue must be itemized by the payment dates and amount, and separately identified. In addition to these items, the budget may contain the following budget requirements: Unappropriated Ending Fund Balance A local government may include an estimate for unappropriated ending fund balance in its budget. The purpose of this estimate is to provide the local government with a cash or working capital balance with which to begin the following fiscal year (ORS 294.371 and OAR 150-294.371). When calculating the amount of the unappropriated ending fund balance, determine the cash requirements of the local government between July 1 and the time sufficient revenues become available to meet cash flow needs. The maximum amount that may be budgeted in an unappropriated ending fund balance is an estimate of the difference between the cash requirements and the other resources available. The unappropriated ending fund balance is not included in the resolution making appropriations. No expenditures can be made from an unappropriated ending fund balance during the year in which it is budgeted, except in an emergency situation created by civil disturbance or natural disaster (ORS 294.455). If an emergency develops and the revenue in the unappropriated ending fund balance is needed, it may be appropriated with a resolution or ordinance or through a supplemental budget. Toward the end of the fiscal year in which an unappropriated ending fund balance is budgeted, the budget officer should monitor actual cash flow carefully. A revenue shortfall during the year may mean that spending may have to be reduced in order to have sufficient cash in the unappropriated ending fund balance. If expenses cannot be reduced, then the amount in the unappropriated ending fund balance may be less than 22 planned. This is allowed as long as expenditures remain within the fund’s appropriation authority and there has been a revenue shortfall. General Operating Contingency An estimate for general operating contingency may be included in any operating fund. The general operating contingency is not a fund. It is a line item appropriation within an operating fund [ORS 294.352(8)]. The estimate for general operating contingencies is based on the assumption that unforeseen spending may become necessary in an operating fund. Its purpose and proper use are explained in Administrative Rule 150-294.352(8). Each operating fund is allowed one appropriation for a general operating contingency. A nonoperating fund cannot have an appropriation for a general operating contingency. A Debt Service Fund is an example of a nonoperating fund. The contingency estimate must be reasonable, based on past experience, and in line with the purpose of the particular fund involved. It cannot be made in place of an estimate for expenditures which are known to be necessary and can be anticipated. It must not be used to cover up improper or loose budgeting practices. The general operating contingency is shown in the budget as a line item, separate from any of the three major object classifications. For example, in the general fund it would be in a nondepartmental category along with interfund transfers and the unappropriated ending fund balance. A resolution or ordinance must be passed before any of the general operating contingency can be transferred. The transfer must be made to an existing appropriation. The operating contingency then is reduced and the receiving item increased by the same amount so the fund remains in balance. There is no statutory limit of the amount which may be appropriated for the general operating contingency. However, the amount which may be transferred from contingency is limited to 15 percent of the total appropriations authorized in the fund [ORS 294.450(2)]. This law states that transfers which in total exceed 15 percent may be made only after adopting a supplemental budget for that purpose. For example, if the total appropriations for a fund is $100,000, including $20,000 for the general operating contingency, only $15,000, or 15 percent of the appropriations, may be transferred from the contingency appropriation by resolution or ordinance. The remaining $5,000 can be transferred only through a supplemental budget. Reserve for Future Expenditure An estimate of an amount “reserved for future expenditure” may be included in a Reserve Fund, Form LB-

11. This is a line item requirement which identifies funds to be “saved” for use in future fiscal years. Debt service funds cannot include this type of requirement (Department of Justice letter of advice, August 26, 1970). The amount reserved for future expenditure is not appropriated in the resolution or ordinance making appropriations since the initial intent is not to spend it. If the need arises during the fiscal year to spend this amount, a supplemental budget must be prepared. Pass-through Payments Through intergovernmental agreement or statute, a local government can impose taxes, fees, or charges that are paid, on a pass-through basis, to another local government. The local government that imposes the taxes, fees, or charges budgets them as resources. The pass-through payment to the other local government is budgeted as an expenditure and appropriated accordingly. If the actual amount collected from the taxes, fees, or charges exceeds the estimated amounts in the budget, the local government that imposed the taxes, fees, or charges may appropriate the additional revenue simply through enacting a resolution or ordinance [ORS 294.460(6)]. Budget Forms The Department of Revenue has the authority to make rules and prescribe budget forms. These forms for noneducation districts can be obtained by contacting the Finance and Taxation Unit of the Department of Revenue or on the department’s Web site at The Department of Education provides the forms for education districts. If any government chooses to design its own form, the format must meet the requirements of Local Budget Law. Budget Document Detail Sheets The budget document detail sheets are the heart of the budget. They show in detail the planned requirements and resources the local government needs to carry out its purpose. The forms described below are for use by nonschool local governments. School districts should refer to the Program Budgeting and Accounting Manual for School Districts, published by the Oregon Department of Education, for their budget detail sheets. Form LB-10 is used primarily for special revenue funds, except reserve funds. Special funds include specific-purpose funds for local option taxes and other special project funds. Resources and expenditures are specific to the fund and generally limited to just a few line items. Often, items can be listed and totaled on one page. Form LB-11 is used to show the resources and expenditures specific to a reserve fund. In the case of reserve funds, all or part of the amount in the fund may be “re- 23 served for future expenditure.” After the fund is established, no amount in this fund can be expended for any other reason unless the fund is dissolved. Form LB-20 is used to list all estimated budget resources, including the taxes necessary to balance the budget for each fund requiring taxes. All resources must be budgeted and totaled for each fund. The amount budgeted as an unappropriated ending fund balance in the preceding year, all moneys in saving accounts, time certificates of deposit, and all earned interest must be included in the budget. Form LB-30 is designed to show fund summaries by major object classifications and nondepartmental appropriations separately. An LB-30 summary should immediately follow each fund in the detailed budget document. Placing the summary with each fund provides continuity and a standardized format which makes the budget document easier to understand. Funds with organizational units should be summarized by major object classification. Nondepartmental appropriations, which cannot be budgeted as any part of any organizational unit, are listed separately. Form LB-31 is used for detailed expenditure estimates that should be listed by category and by major object classification. How this form is completed depends on the size of the budget. Major object classifications could be detailed on separate LB-31 forms, or continuously on one form with a fund total on the final page. The fund should then be totally summarized on Form LB-30. Budgets with long, detailed expenditures should have subtotal categories within the major object classifications. The primary objective is to provide easily understood expenditure estimates. Form LB-35 is designed only for bonded debt principal and interest payments. Each payment must be listed individually as a line item, showing the payment due date and the corresponding issue date of the bonds. This fully discloses all of the expenditures. The “Unappropriated Balance for the Following Year,” together with other revenues received, cannot exceed the amount necessary for principal and interest payments between July 1 and when the first tax revenues are received. Itemize all payments showing the bond issue date, payment due dates, and the exact payment amounts. This form can be used for general obligation, revenue, or Bancroft bond funds. Be sure to check the box on the top of the form to indicate the type of bonds. Separate funds are required, depending upon the type of bonds issued. A local government’s outstanding general obligation bonds may be combined in one fund. Revenue bonds are budgeted separately from general obligation bonds, but ORS 223.285 requires that Bancroft bonds be budgeted in a fund entitled “Bancroft Bond Redemption Fund.”

DOR Local Budgeting in Oregon - State of Oregon
Assessment and Taxation Disclosure Manual - Oregon State Library ...
BUDGET SORT - State of Oregon Oregon Business Guide - Oregon State Library ...
25.6.5 Local Government Procedures – Hearings ... - State of Oregon
July 2010 - Oregon State Library: State Employee Information Center
May 2006 - Oregon State Library: State Employee Information Center
April 2013 - Oregon State Library: State Employee Information Center
Perceptions of Local Fiscal Stress During a State Budget Crisis