Page 8 - Pantego FY22 Operating Budget

THE BUDGET PROCESS AND DEVELOPMENT

The Town of Pantego’s policies set forth the basic framework for the fiscal management of the
Town. These policies are developed within parameters established by applicable provisions of
the Texas Local Government Code and the Town of Pantego Code of Ordinances. These
policies are intended to assist the Town Staff in evaluating current activities and proposals for
future programs. Most of these policies represent long-standing principles and practices which
have guided the Town in the past and have helped maintain financial stability over the years.

The Town of Pantego uses a program-based budgeting process. Each budgeting unit,
division/department, is given a target or “baseline” funding level based upon the previous year’s
funding level. Any funding requests that represent new expenditures or programs, or that is in
excess of baseline funding, must be submitted as a separate supplemental request. These
requests may be either a new or restoration request for resources, depending upon the
budgeting unit’s funding target. Each supplemental request is prioritized according to need as
perceived by the department head.

1. Revenue Projection. The budget revenue projections for the new fiscal year begin early
in the current fiscal year. Revenue projections, other than property tax and sales tax
projections, are made with the department head responsible for the revenues with help
from the Finance department. Projections are based on trend analysis, anticipated
changes in the local and regional economy, and discussions with directly associated
staff members. Although revenue projections are prepared early in the budget process,
the budget revenue analysis continues with departmental budget development and
extends until the budget is adopted based upon any new information.

2. Proposed Budget Analysis and Compilation. The Finance department reviews and
compiles a preliminary draft of departmental budgets. Given revenue projections and
baseline funding requirements, budget funding changes are made according to
necessity and priority. A total recommended funding level is determined and weighted
against available resources. To ensure timely preparation of the budget, a budget
calendar is prepared outlining important dates and events. This calendar is distributed
and closely followed during the budget process.
In early July, the City Manager presents to Town Council the proposed annual operating
budget covering the next fiscal year. Except for funds that are meant to be depleted or
decreased each year, such as Capital Project funds, the City Manager’s proposed
budget should assume, for each fund, operating revenues and resources exceed, or are
equal to, operating expenditures. The City Manager’s budget message summarizes
funding requirements, major changes in programs and alternatives for funding. The
budget will assure that current expenditures are funded with current revenues. Current
operating expenses will not be capitalized or funded through the use of long-term debt.
Budget work sessions are held with the Town Council to review and discuss the
proposed budget. In mid-Summer, and according to the Budget Calendar, presentations
are made to the Town Council outlining major issues, concerns and mandates
competing for resources. Town Council has the opportunity to ask questions and give
directives on Town programs and services. During this time, citizens also have the
opportunity for input. Discussions follow up until budget adoption.

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