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City of Tukwila <br />Allan Ekberg, Mayor <br />INFORMATIONAL MEMORANDUM <br />TO: Finance Council Committee <br />FROM: Peggy McCarthy, Finance Director <br />BY: Vicky Carlsen, Deputy Finance Director <br />CC: Mayor Ekberg <br />DATE: May 10, 2017 <br />SUBJECT: Budget Process for 2019 -2020 <br />ISSUE <br />As part of the City's 2017 work plan, we are reviewing the current budget process and will be <br />recommending enhancements to the 2019 -2020 process. These enhancements will allow the City <br />to meet its current biennial priority of "Ensuring organizational effectiveness and responsible fiscal <br />stewardship ", while also directly aligning with the Strategic Plan goal of maintaining "A high <br />performing and effective organization ". <br />BACKGROUND <br />A City budget serves several functions. Based on GFOA's "Best Budgeting" practices, a budget <br />is a policy document, a communications device, a financial plan, and an operations guide. The <br />City receives the GFOA budget award every two years for this document, representing the City's <br />ongoing commitment to conforming to these guidelines. To keep current with these best <br />practices, it is important for the City's budget process to evolve over time. In planning for the next <br />biennium, we will be reviewing the various budgeting methods available. <br />DISCUSSION <br />There are several different methods used by government agencies to achieve the goals and <br />priorities of the community. The Finance Committee has requested a comprehensive overview <br />of the different budget models available for consideration. Based on research from AWC, MRSC, <br />GFOA, the Government Consortium, and other local cities, we determined that the following <br />budget models are available for consideration: <br />1. Line Item Budget <br />2. Program Budget <br />3. Performance Budget <br />4. Program - Performance Budget <br />5. Zero -based Budget <br />6. Expenditure Control Budget <br />7. Incremental Budgeting <br />8. Budgeting for Results <br />9. Priorities of Government <br />Each of these budget models is highlighted in Attachment A. Further discussion of the more <br />common models used in municipal budgeting are included in Attachment B, including a pro /con <br />discussion on each as requested by the committee. <br />Currently, the City budgets using a hybrid approach, which primarily includes the "incremental" <br />and "budgeting for results" models. Essentially, this means we start with the prior year's adopted <br />budget, and either add or subtract to each expenditure category based on a specific rate, often 85 <br />