BUDGETING in the STATE OF OREGON

As defined by Oregon State Law [Oregon Revised Statutes (ORS)], a budget is a financial plan that contains estimates of revenues and expenditures for a given period of time, either annually or biennially. Local governments in Oregon operate on a fiscal year that begins July 1 and ends the following June 30. Budgeting requires local governments to evaluate plans and priorities in light of the financial resources available to meet those needs. In Oregon, a budget is necessary to justify the need for a given rate and amount of property taxes.

Oregon's local governments are highly regulated and controlled by ORS. The state's local budget law is set out in ORS 294.305 to 294.520, and 294.555 and 294.565. Oregon local budget law has four major purposes:

· Establish standard procedures

· Outline programs and services and the fiscal policy to carry them out

· Provide methods of estimating revenues, expenditures, and proposed levies

· Encourage citizen involvement in budget formulation before budget adoption

BUDGETING in the CITY OF LAKE OSWEGO

Budget Process

The City of Lake Oswego prepares and adopts a budget in accordance with ORS 294.305 through 294.565. These statutes set the legal standards for preparing, presenting, adopting, implementing, and monitoring the budget. The budget is presented in fund and department categories. Over-expenditures in any category are prohibited and unexpended budget appropriations lapse at the end of the budget period.

The City Manager has the responsibility for managing the overall City budget and maintaining budgetary control at the approved appropriation level. Ongoing review and monitoring of revenues and expenditures is performed by the Finance Department and the appropriate operating departments. Under the City's expenditure limitation, total expenditures cannot exceed the final appropriation once the budget is adopted. Any amendments to the budget come about via the supplemental budget process.

Budget Amendments

The budget may be amended during through adoption of a supplemental budget. Supplemental budgets are adopted through the same process used for the regular budget, including the use of public hearings, and cannot extend beyond the budget period during which they are submitted. They also cannot be used to authorize a tax levy.

By transferring appropriations, the City usually keeps enough flexibility to carry out the programs prescribed in its adopted budget. There will be times, however, when an adopted budget has no authority to make certain expenditures or when revenues are received for which the City had no prior knowledge. In those cases it is possible to use a supplemental budget to authorize expenditures and/or appropriate additional revenues in the current budget period.

BASIS OF ACCOUNTING

Budget Basis: All the funds are budgeted using the modified accrual basis of accounting in accordance with budgetary accounting practices. In modified accrual, revenues are recognized when they become measurable and available. Measurable means that the dollar value of the revenue is known. Available means that it is collectible within the current period, or soon enough after the end of the current period to pay off liabilities of the current period.

Significant revenues that are considered to be measurable and available under the modified accrual basis of accounting are property taxes, franchise fees, and assessment lien installments received within approximately 60 days of the end of the fiscal year. Expenditures are recognized when the liability is incurred, except for:

Interfund transactions which are recorded on the accrual basis;

Revenues for grants which are recorded as earned; and

Interest on general long-term obligations which is recorded when due.