Budget_Process_with_Calendar_BN21_no pg footerTHE BUDGET PROCESS
BUDGETING in the STATE of OREGON
A budget as defined by Oregon State Law [Oregon Revised Statutes (ORS)], is a financial plan containing
estimates of revenues and expenditures for a given period or purpose. 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 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. These statutes provide legal standards for
preparing, presenting, adopting, implementing, and monitoring the budget. 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 Adoption
The City of Lake Oswego prepares and adopts a budget in accordance with Oregon Budget statutes. The
budget is presented by fund and department categories.
The City Manager has responsibility for management of 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.
Budget Amendments
There will be times when an adopted budget has no authority to make certain expenditures or when
revenues are received for which the City had no prior knowledge. The budget may be amended during a
budget period through adoption of a transfer resolution or supplemental budget to authorize
expenditures and/or appropriate additional revenues in the current budget period. Amendments to
budget appropriations are approved by Council. By transferring appropriations, the City usually has
enough flexibility to carry out the programs prescribed in its adopted budget.
THE BUDGET PROCESS
BUDGET CALENDAR
October through December
City Manager and Finance develop budget goals and guidelines
Present goals and guidelines to management
January and February
City Council establishes goals for the year
Preliminary budget drafts are prepared and submitted for Finance review
CIP project requests due to management
March and April
Finance performs final review and reconciliations and prints proposed budgets
Budget Committee meetings are advertised
City Manager presents budget message and budget at the first Budget Committee meeting in April
Budget Committee discusses and deliberates on the Proposed Budget
May
Budget Committee discusses, deliberates and approves the budget
Budget is updated to reflect changes, if any, and forwarded to Council
Advertise notice of state shared revenues
Prepare and publish Financial Summary and Notice of Budget Hearing for adoption of budget
Publish Notice of Supplemental Budget Hearing
June
Council passes supplemental budget resolution
Council passes resolutions for state revenue sharing eligibility and proposed uses
Council holds public hearing to allow citizen comment on the approved budget and adopts the
Budget, makes appropriations, and sets and classifies tax levies
July
The Adopted Budget takes effect
Submit budget packets to County Assessors (Clackamas, Multnomah, and Washington Counties).
THE BUDGET PROCESS
BUDGETING BY FUND
The City’s budget is organized on the basis of funds, or account groups, and each is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self‐balancing
accounts.
Governmental funds finance most of the City’s functions and include the general fund, special revenue
funds, debt service fund, and capital projects funds. Proprietary funds are used to account for the City’s
activities that are similar to those often found in the private sector and include enterprise and internal
service. All of the City funds in the budget document are listed below and are appropriated.
Major funds represent the significant activities of the City and basically include any fund whose revenues
or expenditures, excluding other financing sources and uses, constitute more that 10% of the revenues or
expenditures of the appropriated budget.
Governmental Funds
GENERAL FUND General Fund (Major Fund)
RESERVE FUND Capital Reserve Fund
SPECIAL REVENUE FUNDS Trolley Fund; Tourism Fund; Street Fund (Major Fund); Building
Fund; Public Art Fund; Bicycle Path Fund; Systems Development
Charges Fund; Library Endowments Fund; and ACC Endowment
Fund
DEBT SERVICE FUNDS Bonded Debt Service Fund; and City/LORA Debt Service Fund
CAPITAL PROJECTS FUND Assessment Project Fund; and Parks Bond Fund
Proprietary Funds
ENTERPRISE FUNDS Water Fund (Major Fund); Lake Oswego – Tigard Water
Partnership Fund; Sewer Fund (Major Fund); Stormwater
Fund (Major Fund); and Tennis Facility Fund
INTERNAL SERVICE FUNDS Engineering Fund; Public Works Support Services Fund; and
Operations Building Fund
THE BUDGET PROCESS
BASIS OF ACCOUNTING
Budget Basis
All of 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 interest on general long‐term obligations which is recorded when due.
Audit Basis
The audit, as reported in the Comprehensive Annual Financial Report (CAFR), accounts for the City’s
finances on the basis of generally accepted accounting principles. Generally Accepted Accounting
Principles or GAAP is defined as conventions, rules, and procedures necessary to describe accepted
accounting practice at a particular time. The modified accrual basis of accounting, a GAAP‐approved
method, is also used in the audit for all funds except for the Proprietary Fund Types (i.e., Water, LO‐Tigard
Water Partnership, Sewer, Stormwater, Tennis, Engineering, and Public Works Support Services). The
audit uses the full‐accrual method of accounting for the Proprietary Funds. The CAFR shows all of the
City’s funds on both a budgetary and GAAP basis for comparison purposes.