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MEMORANDUM
Introductory Section
I have evaluated the City of Arvada 2005-2006 Biennial Operating and Capital
Budget against the Distinguished Budget Presentation Awards Program (DBPAP) criteria
set forth by Government Finance Officers Association (GFOA). The budget is reviewed
under four major categories. The four major categories are, policy document, financial
plan, operations guide, and the budget as a communication device. This memo will end
with a conclusion addressing how the budget serves as a tool to maintain and build public
trust.
My overall impression of the budget compared to the criteria set forth by GFOA
was the City’s budget could have achieved a higher form of alignment with non-
mandatory recommendations proposed by GFOA. For instance, the recommendation to
have a policy on asset inventory was not present in the City’s budget, instead
management of fixed assets was regulated to a program to fix and maintain capital assets.
This memo discusses mandatory criteria only as set forth by GFOA in the DBPAP. Non-
mandatory criteria’s discussion was eliminated from this memo due to an e-mail received
on 10 April 2007 instructing us to touch on each of the mandatory criteria.
Policy Document
Financial Plan
describes the process to be used during each quarter to determine the consequences in
increase or decrease of revenue by a significant amount. If a fund shows increase then
there is no change to the budget, but if the anticipated funds do not materialize then cuts
will take place (Budget, p. 12). The change in fund equity is presented separately for both
years. I rate this section as proficient, because I could not find in the budget a statement if
there a particular line item that would increase or decrease by more then 10%.
6. The Budget does not define capital expenditure. The budget does present in a pie
chart the total dollar amount of capital expenditure for the two budget years (Budget, p.
18). Significant non-routine capital expenditure is described with the dollar amounts
shown (Budget, p. 245). I rate this section as outstanding, for meeting the requirements of
disclosing nonroutine expenditure items, even though capital expenditure is not defined.
8. Legal debt is “not [to] exceed 3% of the assessed valuation of the taxable property
within the City as shown by the last preceding assessment” (Budget, p. 261). The City’s
budget states explicitly that it does not have general debt outstanding, but does have
revenue bond outstanding. The revenue bonds that are outstanding are identified, and
described with the amount of interest rate charged, when the bond was issued, and
expected date of completion. The principal and interest payments are recorded under each
debt service requirement (Budget, p. 262-4). A special section addressing long-term City
debt, and brief information explaining City’s bonds promotes transparency. For being
transparent about debt ensures an outstanding rating.
Operations Guide
1. Each department has their own departmental chart, and a description of the
department’s purpose presented along with their portion of the budget. This criterion is
rated as proficient because the actual description of the departments themselves is not
discussed, except their stated purpose/mission statement along with extraneous
information.
3. The City’s organizational chart is presented at the beginning of the budget
(Budget, p. iii). This chart deserves an outstanding rating, because at the top of the
hierarchy are the Citizens of Arvada, then below them the City Council.
4. A summary table of position is provided for the entire entity (Budget, p. 284-289).
The table does not include the prior year, the current year, but only the budget year
position list is included. The weakness of this portion of the budget is that it does not
provide a position list for previous budget years or future budgeted years. Having
previous position lists in the budget allows the public to compare and contrast the
proposed position list with previous position lists. For this reason, the budget’s
presentation on position listing is rated as proficient.
Communications Device
3. Under the legal requirements heading, a process is described how the budget is
developed, reviewed, and adopted (Budget, p. 10). A budget calendar is provided that
encapsulates the budget processes (Budget, p. 14). How the budget can be modified is
described under the headings budget and accounting controls (Budget, p. 14-15). I rate
this section as proficient because the information presented on how a proposed budget
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Conclusion