Understanding how the city allocates and spends money can be complicated. In addition to the resources available at Budget Revealed, below is an explanation of how the annual budget process works.
The City of Dover operates on a fiscal year calendar, which begins July 1.
How It Operates
The City of Dover, like all municipalities, adheres to accounting practices specific to government. The formal process includes recognizing public support for services and infrastructure, as well as following the spending and taxing authority outlined in the budget.
There are notable differences between public- and private-sector financial practices, specifically openness and transparency, which are hallmarks of the public sector.
Access to regular financial reporting reflects a constructive "spirit of full disclosure" to clearly communicate and educate the public about the financial condition of its government.
Dover continues to be recognized for excellence in this area. Governmental accounting standards provide the basis for tracking and reporting financial performance.
Public priorities are articulated, debated and ultimately decided by representatives elected to serve on both the School Board and City Council.
The overall financial structure of the City consists of several separate funds.
The following funds fall under the umbrella of Governmental Funds:
General Fund
The General Fund covers the cost of many City services supported mainly by property taxes, including Police, Fire, Human Services, Community Services and Education.
Special Revenue Funds
Special revenue funds include state and federal grants, the parking activity fund, the residential solid waste fund, the McConnell Center and recreation funds.
Capital Projects
Capital projects account for acquisition or construction of major capital facilities. For example, this includes the General Fund projects of each year's Capital Improvements Program. Another example ie the Tolend Road Landfill Closure Fund. It excludes capital projects accounted for by Proprietary Funds (see below).
Proprietary Funds
Proprietary funds use the accrual basis of accounting and budgeting, except that budgeted capital outlay items are treated as assets for accounting purposes and not reflected as expenditures.
The following funds fall under the umbrella of Proprietary Funds:
Enterprise Funds
Enterprise funds include services primarily funded through user charges. These include the City's water and sewer funds, as well as the Dover Arena and Dover Industrial Development Authority funds.
This category also includes internal service funds, including fleet services, DoverNet, worker's compensation and Other Post Employment Benefits (OPEB).
Internal Service
Internal service funds account for services provided to various departments of the City which are reimbursed. This includes the Workers Compensation Funds, the Garage Fund, Central Stores and the 457 Deferred Compensation Fund.
The following funds fall under the umbrella of Fiduciary Funds:
Trust Funds
Trust Funds account for money held by City trustees to meet the intended purpose of the trust instrument. These include expendable and non-expendable trusts. Expendable trusts can spend the principal for the intent of the trust, such as the Motor Vehicle Waste Reclamation Fund. Non-expendable trusts can spend only accumulated income. These make up the majority of Trust Funds and include the Cemetery Perpetual Care and Maintenance funds.
Agency Funds
Agency funds account for money held by the City acting as an agent to individuals, private organizations, or other governmental units. An example is performance bonds held for specific purposes or the Cocheco Riverwalk Fund.
The budget process helps navigate the development, implementation, and evaluation of a plan for the provision of services and capital assets. It is also intended to help decision makers with informed choices about the provision of services and capital assets and to promote stakeholder participation in the process.Some of the key characteristics of the budget process are:
Incorporates a long-term perspective;
Establishes a link to broad organizational goals;
Focuses budget decisions on results and outcomes;
Involves and promotes effective communication with stakeholders; and
Provides incentives to government management and employees.
The Capital Improvements Program
The budget process begins with the proposed Capital Improvements Program, which outlines recommended capital projects over six years.
Although the proposal spans six years, only the first year of the CIP is funded, based on a vote of the City Council. Preparing for the CIP begins in July each year.
Each City department presents requests for the next fiscal year to the City Manager. Departmental requests and the City Manager's recommendations are then sent to the Planning Board for review. Once the Planning Board reviews the CIP and returns it to the City Manager, the plan is then revised, if necessary, and presented to the City Council in December for review and approval.
The City Council votes to approve the six-year CIP and the bond authorization for first-year projects requiring debt financing.
The Annual Operating Budget
Each winter, City departments develop and submit budget requests to the City Manager for the next fiscal year. These requests are based on each department's needs, according to department heads. These requests include the first year of the CIP.
From February to March, the City Manager reviews budget requests with the all City departments. On or before March 15, the School Board must submit its recommended budget to the City Manager.
The City Manager submits the proposed budget, including the School Board's recommended budget, by April 15, to the City Council. Over the next two months, until June 15, the City Council discusses and deliberates the proposed budget with the City Manager, department heads, school officials and the School Board.
Although the City Council can discuss and modify specific line items on the municipal portion of the budget, the Council is only authorized to vote on a bottom-line amount for the school budget.
Public hearings on the budget are held at least seven days in advance of budget adoption by the City Council. Separate hearings for the City and School portions of the budget must be held at least 24 hours apart.
By June 15, the City Council is required to adopt a budget resolution by a majority vote for the next fiscal year.
In October, the City's tax rate is set by the state Department of Revenue Administration. The tax rate is based on the budget adopted by the City Council and the total assessed property value of the City.
Revisions to the Budget
Adjustments to the budget can be made in one of three manners: A City department (excluding the schools) may transfer appropriations between accounts within his divisions with City Manager approval. The City Manager may request transfers of appropriations between departments with majority approval of the City Council. The City Council may amend the budget by appropriating additional revenue or raising taxes before the tax rate is set. This requires a two-thirds vote.
More Information
Previous and current budget information, including complete copies of the budget, background information and budget presentations, can be found here on the Budget Revealed site. Additional information about the FY2014 budget process can be found here:
http://www.dover.nh.gov/budgetrevealed_2014.htm
Below is a presentation used during City Manager J. Michael Joyal's Budget Revealed session. It contains slides that visually explain the budget process.
Video within the presentation explains the major functions of the budget.
Budget Revealed
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