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I currently serve as the mayor of the City of Milan. I feel transparency and open government are important to a thriving democracy. I invite you to post questions or comments ---if you have any ideas about things you'd like me to discuss, relating to the City of Milan, this blog is a great place to exchange ideas. You must include your name, (first and last) and town to have your comments posted here.

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Thursday, April 30, 2009

$4000 budgeted does not ALWAYS equal $4000 spent…

HAVE YOU BEEN FOLLOWING OUR gripping budget meetings ???

I’m sure you’re just perched on the edge of your seat waiting for the next installment where we will continue the fun as we pore over pages and pages of line items and question every amount.

OKAY. I know talking about this stuff can be pretty dry, but it’s really important to me that you guys get this, and I’ll try to make it short, and I’ll try to be as entertaining as possible as I explain it….

When you hear us say we will budget a certain amount of money for something—that does not necessarily mean we will SPEND that amount. Typically we set the amounts for the various funds with the goal of spending less. For the most part, our department heads do spend less. They doggedly look for alternative funding sources with the goal of coming in under budget.

A great example of this was explained at Monday night’s budget meeting—when we were going over the police budget expenditures. One of the council members asked our police chief about the $4000 he earmarked for ammo and firearm maintenance and repair.

The chief explained that last year he received grant funding that covered most of those expenses, and that he expects the same for this year---BUT---grant funding is not a guarantee, so we have to budget for what it would cost, just in case.

As our new city administrator Ben Swayze explained to me after the meeting:

“Just because the money is in there, does not mean the goal is to spend it down to zero---in fact it’s just the opposite. All of the department heads look for ways to save, with the goal of coming in under budget.”

After Monday night’s council meeting Police Chief Jeff Lewis cited another example of this kind of thing. The officers use a special holster for their tasers, which were priced at $110 per holster, so the budgeted amount was $900 to purchase the eight needed holsters for our officers. One of our sergeants just happened to be on Ebay and found the same holsters for $19 per unit. The sergeant knew the department needed them, and knew it would save us some money, so he purchased them at that great discounted price. The budgeted amount for those holsters was over $900, but because of a savvy police sergeant, we got them for under $200. (FYI: The sergeant produced a receipt for the purchase and we reimbursed him.)

This is the common practice for our city employees and department heads, I’m often extremely impressed with the great respect they have for our public dollars.

Really !

OKAY. I know this was not as entertaining as promised, but if you made it this far without clicking elsewhere then please know I am very proud of you. Hey I even used a pretty color today to help make this seem more interesting...

End of boring lecture on our budget. For now….

2 comments:

  1. Michael ArmitageMay 1, 2009 at 1:24 AM

    Looks like Ben will be joining me in the MPA program at EMU! This stuff is so much fun, I finish my final graduate budgeting class in June. Last semester I did my research project on the Fire Dept Budget, that was a good example of Lump Sum Budgeting!

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  2. Hi Michael,
    That's exciting that you too are in the MPA program! Actually, Ben is the MPA program at CMU, not EMU. Probably just a typo in the Milan News-Leader article.
    Thanks for posting!
    Kym

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