Thursday, April 08, 2010

Can FY 2011 Budget Be Early?

Monday’s City Council meeting included a discussion on how soon the FY2011 budget can be adopted and whether foregoing extraordinary state aid would speed up the process.

The city’s fiscal year begins on July 1, but budget adoptions have consistently occurred as late as the third quarter, meaning most of the money has already been spent through temporary or emergency appropriations, and savings can only be eked out in the last quarter of the year.

The process is that department and division heads make known their budget needs early on, and the administration then may modify them. The City Council introduces the budget as presented by the administration, and then may make more changes before adoption.

But then there is the question of extraordinary state aid. The city usually asks for millions of dollars, but may only receive thousands. In the last round, the city requested $3.5 million and received just $250,000. Under Gov. Chris Christie, extraordinary state aid may not even be available as he works to meet a huge state budget gap.

Councilman Adrian Mapp, a certified finance officer with experience in dealing with Trenton, said Monday he strongly recommended not relying on state aid. Mapp said the benefits of early budget adoption “far outweighed” the state aid benefits.

The wait for notice of state aid flies in the face of a state-recommended timeline for budget introduction and adoption.

Although some council members supported early adoption of a “draft” budget, Councilman William Reid is one who wants the budget in place at the beginning of the fiscal year, at least by early September.

Councilman Cory Storch also said he thought there should be a draft budget by early August. As it was this year, the council had just three or four months to deal with budget cuts and Storch said, “That’s a disaster.”

But City Administrator Bibi Taylor said there were documents such as the annual financial statements from city auditors that were necessary before a budget statement could be produced, and also noted that once a budget is adopted, it cannot be amended (thus making the idea of adopting a draft budget unfeasible).

Still, a council majority agreed to urge early adoption, while also noting the lack of a chief finance officer and a finance director are hindering fiscal accountability.

The city has not had a CFO since 2007 and has had many directors of the Department of Administration, Finance, Health and Social Services in the past four years. Taylor was the last one in 2009, and was to continue to Jan. 31, but no successor has been named.

--Bernice Paglia


Blogger robert.bolmer said...

I hope this City Council will step up to the bar and force our budget-deficient mayor to come up with a budget by the end of July. If not, then let's kiss Plainfield goodbye, as we'll be broke and only the politicians will have any money.

1:30 PM  
Anonymous Anonymous said...

Hi, Bernice,

It would be nice to have budget in on time. The hard work should begin now. Certainly the administration should be working hard to get a finance director and CFO in place, but this will only happen if we have a council dedicated to making it occur.


4:05 PM  
Anonymous Anonymous said...

With the fiscal year beginning on July 1st, the budget process should have already been started with budgets submitted from all Divisions and Departments to the Mayor. Then the process should further itself internally until a buget is submitted by the Mayor. With scheduled budger hearings, etc., there is no reason why the buget cannot be in place and approved prior to the beginning of the fiscal year. To finalize a budget process many months after the fiscal year begins is a result of poor managment. You cannot delay the process just to see what outside aide is coming to Plainfield - approve and adopt a budget by July 1st and any outside aide that comes in can be applied to offset the upcoming years budget. It might have a higher impact the first year, but it would make for more realistic projections for budgets in upcoming years.

Another concern in the budget process is that Union contracts are on a Jan - Dec year basis while the city's fiscal year budget is from July to June. How hard is it to get things aligned to make budgeting easier? To budget one salary for 6 months, and another for the remaining 6 months seems stupid. Especially if a contract expires in December - You can accurately budget for 6 months but have to guesstimate the 2nd half of the budget year.

6:48 PM  
Anonymous Anonymous said...

We cannot have a budget on time because a group of people, who have no clue about running a business voted for a mayor who has even less of a clue.

The mayor is part time - can someone tell her that and let Bibi Taylor do her job? Mayor, kiss babies and people on the street, and leave the running of the city to someone who has the education and background to do so. You will look much better.

10:40 AM  

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