The Port’s Budget Process – A Primer
By Matt Rosenberger, Accounting Manager
For many readers, municipal budgets are a mystery. My aim here is to help people better understand how the Port establishes and manages its budget.
SEPTEMBER – Preliminary Plan
The Port’s Operations and Capital Budget process starts in late September for the following year. At that time, we have a good handle on the cost of our operations for the next year. We also have a preliminary plan on the Capital Projects we hope to accomplish.
Then, we start to fill in the Operations Budget as we know it. We add a minor increase of 2% for all expenses due to inflation. We also look for anything that we see as extraordinary (nonrecurring) and either subtract or add it to the budget to ensure preciseness in tracking progress. Depreciation is also added to the budget, as well as any depreciation from capital projects to be constructed the following year.
NOVEMBER – Tax Levy $’s
In early November, the Clark County Assessor’s Office helps the Port determine our Tax Levy for the following year. This is an important piece of the budget process puzzle, because without it our many services to the Ridgefield District would be reduced.
The Operations and Capital budgets and the Tax Levy are then presented to the Commission for approval at the Port Commission’s first meeting in November. Once approved, the Port has the authority to implement the budgets for the upcoming year; they are then posted on our website for public access.
JANUARY – Budget Tracking Starts
With the start of each new year, we follow the budget in detail. Financials are completed comparing the Budget figures to the Actual figures and provided to the commissioners each month. For the public’s understanding, at the second Port Commission meeting of every month, a financial review of the prior month is presented. The Budget vs Actual financials are posted on a quarterly basis to our website under the “About – Finance – Quarterly Reports” section.
THROUGHOUT THE YEAR – Review & Reporting
When reviewing the Budget vs Actual report, labels at the top of the page indicate the reporting period. As of this newsletter printing, the most recent reporting period found on our website is January through June 2019. The report notes that six-month period includes 50% of the budget. This is important because it provides a look at what percentage of the budget has been used by the report’s date.
Although the port’s financial goal is to be right on budget, it’s optimal to be over budget on revenue items and under budget on expense items. If any line items are contrary to this, we examine them to understand if it’s simply an expense payment or revenue receipt timing issue, or an exception for which the port didn’t budget.
For the first two quarters of 2019, the Port is doing better than budgeted for ordinary, day to day operations.
The Other Income/Expenses section deals mostly with our capital projects – things that aren’t part of the ordinary course of operations. For example, this year the Port budgeted for Environmental Cleanup and for the Pioneer Street Rail Overpass.
When budgeting for the Rail Overpass completion, the Port assumed all the powers- that-be would have signed-off on the project, and we would have started construction earlier this year. Unforeseen circumstances, however, have postponed the project. As we’re currently scheduled to go out to bid in late fall, most of the revenue and expenses associated with that project will shift into 2020.
But that’s the risk an organization takes when completing a budget. While well-intentioned, some things are not in the Port’s control. So, we just adjust – and ensure normal operation are going as planned.