4 Ways to Bolster Your Budget – Part 1
4 Ways to Bolster Your Budget – Part 1
Understanding the challenges of municipal budgeting.
From elected officials and city administrators to community development leaders and building officials, today’s municipal professionals find it hard to escape the slew of challenges that come with creating and managing effective budgets.
Fortunately, there are proven ways for municipalities to overcome these challenges and bolster budgets, allowing them to effectively meet community needs, control spending, and secure revenues.
In this blog series, we’ll explore four specific actions that lead to more stable municipal budgets, healthier bottom lines, and a multitude of other benefits that communities experience as a result of financial freedom and security.
But first, it’s helpful to understand some of the root causes of the budget bottlenecks facing many municipalities today.
The inability to see the future
Local governments develop budgets to monitor progress toward community goals, control spending, and predict cash flow and revenues. The problem? These budgets are based on best estimates and predictions of the future, something that can never be mapped with exact accuracy. When inevitable changes occur with development activity, the economy, infrastructure costs, federal mandates, and the list goes on…budget plans can often go haywire, leaving communities at a loss for how to stay on the rise without increasing the budget in the face of an uncertain future.
Competition for limited resources
Budgetary strains get more pronounced when multiple departments are competing for the limited funding and resources available. Those tasked with deciding how funds should be allocated face the struggle of meeting widespread needs and expectations while controlling costs associated with delivering the necessary services.
Another serious struggle for municipalities nationwide is trying to meet increased service demands while costs continue to rise:
- Pension costs – Mass retirements within building departments, as well as pension costs for other public employees moving toward retirement, is a tangible issue for an increasing number of communities nationwide.
- Mandate costs – Meeting requirements from the federal and state governments, often without additional funding, staff, or resources, poses another problem for local governments.
- Infrastructure costs – Rising price tags for roads, bridges, water, etc. and stagnant funding and revenues leave municipalities scrambling to make necessary infrastructure improvements with little means to do so.
Over- or under-staffing
Because many municipal departments experience dramatic fluctuations in workloads throughout the year, staffing can be a real challenge as well. Keeping the same level of staff year-round can turn departments into a financial drain. Yet reducing staff can be time-consuming and can hurt service efficiencies when work picks up again. For example, building departments without adequate staff can experience backlogs during construction booms that cause developers to take their business elsewhere, meaning community development AND revenues go nowhere.
Maintaining internal and external communication
Lastly, a lack of communication among internal stakeholders makes budget planning and management a near-impossible task. Municipalities often run into problems when stakeholders don’t know what other staff or departments are doing or what their intentions are. And communication problems extend beyond that… When citizens, businesses, and developers aren’t aware of the community’s budgetary plans or challenges, they can’t adjust their expectations accordingly or develop trust in the local government and its leaders.
Budget challenges are top-of-mind for municipalities across the nation, and balancing the budget is just the start. In the midst of unexpected curveballs, competing demands, rising costs, staffing issues, and communication hurdles, it falls to leaders like you to manage the budget and find solutions that will take your community in the right direction—all to best meet the needs and interests of the residents, businesses, and developers that make up your community.
Municipalities can achieve more stable budgets that keep them on the rise by:
- Gauging development trends
- Preparing for changing workloads and staffing needs
- Keeping open lines of communication
- Deciding on an appropriate payment structure
Join us in our next post as we address the first two steps toward a sustainable budget and a better community. Then be sure to finish out our series to get full insight on smart budget management and to see how stable budgets come full circle.
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