Finance and Budgeting

image of Local Government Center financial management

Introduction

The purpose of this page is to supply local officials and interested persons with information useful in budgeting, financing and evaluating the services their local governments provide. We hope that this information will spur discussion and lead to innovation and more informed decision-making. The resources provided, however, are for educational purposes and do not prescribe what a local government should do.

Overview of Budgeting

Basics of Local Government Financial Management – (PowerPoint file, 96 kb, 24 slides) This presentation discusses the basic components of local government finance and some of the differences between private and public finance.
Local Government Budgets – (PowerPoint file, 346 kb, 31 slides) This presentation covers the requirements and components of a GASB compliant local government budget.
Local Government Budgets: Approaches and Traits – (PowerPoint file, 180 kb, 20 slides) This presentation discusses the various types of budgets commonly used by local governments; how they differ; the reasons they are used; and how to transition from one to another.
An Introduction to Capital Planning – (PowerPoint file, 98 kb, 33 slides) This presentation introduces the concept of capital planning and what goes into a capital improvement plan.
Financial Condition Analysis – Craig Maher – (PowerPoint file, 2.4 Mb, 56 slides)
Government, Effectiveness, Performance, and Local Property Values – Steve Deller and Craig Maher – (PDF file, 2.4 Mb, 32 pages)
Village of Oostburg Budgeting Memo – (PDF file, 370 kb, 5 pages)
City of Sheboygan Budget Analysis – (PDF file, 336 kb, 6 pages)
Local Government Budgeting – (PowerPoint file, 473 kb, 60 slides)
Public Budgeting and Finance – Craig Maher – (PowerPoint file, 3.5 kb, 62 slides)

Types of Budgeting

Performance Measurement and Performance Based Budgeting (PBB) – (PowerPoint file, 112 kb, 22 slides) This presentation is intended to familiarize viewers with the basic concepts of performance measurement, benchmarking, and performance/outcome-based budgeting.
These links are to the Performance Measurement Manual and its Appendix which are the companion pieces to the PBB and PBB Instructional Version presentations. The manual and its appendix provide a step by step discussion of using performance measurement for program improvement and budgeting and includes examples of using performance measurement in a problem solving scenario and a strategic planning scenario.
Performance Measurement Manual – (Microsoft word file, 651 kb, 68 pages)
Performance Measurement Manual – Appendix – (Microsoft word file,  53 kb, 2 pages)
Performance Measurement and Performance Based Budgeting (PBB) – (PowerPoint file, 557 kb, 95 slides) Instructional Version.
Efficiency Approaches – (PowerPoint file, 240 kb, 11 slides) This presentation discusses five common efficiency approaches being considered in local government financial management.
Lean Government – (PowerPoint file, 292 kb, 34 slides) This is a DRAFT presentation that discusses the basic principles of Lean Government, the components used to implement a Lean Government program, and a short success story.
Finding Efficiencies in Local Government – (PowerPoint file, 102 kb, 17 slides)
Case Studies in Performance Management – Jay Moynihan and Mary Kluz – (PowerPoint file, 1.3 kb, 45 slides)

Revenues

Impact Fees – (PowerPoint file, 156 kb, 33 slides) This presentation discusses the specifics of impact fees and their uses in Wisconsin.
Property Tax Limits and Fiscal Burdens: The Role of Organizational Structure – Craig Maher, Steve Deller, and Lindsay Amiel – (PDF file, 132 kb, 37 pages)

Debt

Debt Management – (PowerPoint file, 121 kb, 46 slides) This presentation discusses borrowing and the management of public debt.
Debt Indicators – (PowerPoint file, 608 kb, 31 slides) This presentation discusses debt and financial condition related to debt.
Bonds and Bond Ratings – (PowerPoint file, 170 kb, 39 slides) This presentation discusses the specifics of and reason for issuing bonds at the local government level and further explains bond ratings and why a good bond rating is important.

Audits

Audits(PowerPoint file, 140 kb, 17 slides) This presentation discusses the various types of audits applicable to local governments, what they mean, and how they are used in borrowing.

Technical Tools

Using Net Present Value to Evaluate the Value of Money Over Time – (PowerPoint file, 104 kb, 34 slides) This presentation discusses how the value of money changes over time related to interest rates, inflation, and other related factors. It includes both written and Microsoft “Excel” formulas for determining the time value of money.
Cost Benefit Analysis – (PowerPoint file, 180 kb, 30 slides) This presentation discusses how to perform a cost/benefit analysis to be used in local government decision-making.
Measuring Municipal Fiscal Condition: Do Objective Measures of Fiscal Health Relate to Subjective Measures? – Craig Maher and Steve Deller – (PDF file, 195 kb, 24 pages)
Local Governance Preparedness Index – (PDF file, 259 kb, 22 pages)
Is the Treatment of Intergovernmental Aid Symmetric? – Steve Deller and Craig Maher – (PDF file, 86 kb, 5 page)
The 10-Point Test of Financial Condition: Toward an Easy-to-Use Assessment Tool for Smaller Cities – Ken Brown – (PDF file, 491 kb, 6 pages)
Revisiting Kenneth Brown’s “10-Point Test” – Craig Maher and Karl Nollenberger – (PDF file, 97 kb, 6 pages)

Other Resources

Kim, Yunji. 2018. Local Governments and Fiscal Stress. In The Municipality, League of Wisconsin Municipalities, Vol. 113, No. 7, 3 pages)

UW-Extension Local Government Center. Brief #1 – Tips for Levy Limit Referendums, February 2019.
UW-Extension Local Government Center. Fact Sheet #17 – Financial Management in Local Government: Frequently Used Terms, updated January 2010.

Debt

To learn more about basic budget and finance practices for local government, these are some suggested readings and materials that are available through state agencies, libraries and the International City/County Managers Association.

 

The International City/County Managers Association (ICMA):

ICMA, in Washington, D.C. provides the following resources, which may be ordered by phone at 1-800-745-8780, or by fax: 1-770-442-9742:

Bennett, James, and James Bubier. “Budgeting and Capital Financing 101,” ICMA (video cassette 99-111), 1999.

International City/County Management Association.  Budgeting a Guide for Local Governments, ICMA (available
in paperback (42193) or self-study program (42290), each $36.00), 1997.

International City/County Management Association.  Management Policies in Local Government Finance, 4th edition, ICMA (paperback 42066), $42.95, 1996.

From other sources:

Kim, Yunji. 2018. Local Governments and Fiscal Stress. In The Municipality, League of Wisconsin Municipalities, Vol. 113, No. 7, 3 pages)

Lindenberg, Marc, and Fremont Lyden.  Public Budgeting (In Theory and Practice), Longman Inc., New York, 1983.

Peterson, John E., and Dennis Strachota.  Local Government Finance (Concepts & Practices), Government Finance Officers Association, Chicago, 1991.

Wildavsky, Aaron.  The Politics of Budgetary Process, Little, Brown and Company, Boston, 1964.

Wisconsin Department of Revenue.  Financial Administration: Handbook for Small Wisconsin Towns and Villages, Madison, WI, 1992.

Financial Links

Wisconsin Department of Revenue

www.revenue.wi.gov/governments/index.html – This page links you to government services and information you may need as a clerk, assessor, county official or property owner of the State of Wisconsin. Forms and publications listed on the right-hand side of the page are the most current available.

Wisconsin Department of Administration

www.doa.state.wi.us – The Department of Administration is the source for information on administrative rules for governments within the state. The site directory of their web page provides links to all other State department for financial issues as well as most issues related to State government.

Wisconsin Legislative Audit Bureau

www.legis.state.wi.us/lab/ – The Legislative Audit Bureau is a non-partisan legislative service agency created to assist the Legislature in maintaining effective oversight of state operations. The Bureau conducts objective audits and evaluations of state agency operations to ensure financial transactions have been made in a legal and proper manner and to determine whether programs are administered effectively, efficiently, and in accordance with the policies of the Legislature and the Governor.

Wisconsin Legislative Fiscal Bureau

www.legis.state.wi.us/lfb/ – The Wisconsin Legislative Fiscal Bureau is a nonpartisan service agency that provides fiscal and program information and analyses to the Wisconsin Legislature, its committees and individual legislators.

Wisconsin Department of Employee Trust Funds

www.etf.wi.gov – This is the site for the Wisconsin Department of Employee Trust Funds that provides information regarding the Wisconsin Retirement System in which many local governments participate.

Government Finance Officers Association

www.gfoa.org – This organization represents many of the Finance Directors and other finance professionals in the public sector. It as additional links to reference materials, training, and other good-to-know information.

Government Accounting Standards Board

www.gasb.org – The mission of the Governmental Accounting Standards Board is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports.

Grant Sources

www.uwex.edu/li/andy/grants.html – This is a listing of grant sources and information produced by UW-Extension. Local governments can click on the links to find information on grants and funding which may be available from a number of sources.

Internal Revenue Service (Federal)

www.irs.gov/govt/fslg/index.html – This is the web site for local government issues with the Federal Internal Revenue Service (IRS).

Government Accountability Office

www.gao.gov – The Government Accountability Office was formerly the General Accounting Office. This site allows for a search of Federal programs that may affect local government funding and procedures.

If you have any questions or comments about the Finance and Budgeting web page, e-mail Yunji Kim (ykim535@wisc.edu).